Page 499 - Fundamentals of Management Myths Debunked (2017)_Flat

498 Part 5 • Controlling
to being in your local mall stores in a matter of weeks—and global retailers to more carefully monitor their sourcing stan-
clothing has become a sort of “single-serving disposable item.” dards. Recently, several of the world’s largest apparel com-
Now consumers are wanting new and different items almost panies agreed to a significant plan to help fund fire safety
continuously. There’s a “constant, ceaseless rotation through and building improvements. Part of this five-year agreement
looks and styles.” Providing for that demand has placed a sig- is to not hire/use manufacturers whose clothing factories fail
nificant strain on the operations system behind this fast, cheap to meet safety standards. Well-known European retailers who
fashion. Hasty expansion of factory capacity, lax governmental have signed on include Hennes & Mauritz AB (H&M), Inditex
enforcement of permits and approvals, and a focus on keep- (the Spanish parent company of Zara), Tesco PLC, and others.
ing costs as low as possible in whatever ways needed have Major U.S. retailers, including Walmart, Target, and Gap,
become the focus of factory work culture in this developing chose not to sign that agreement because they felt it exposed
country. Because garment factories in Bangladesh don’t have a them to unlimited liability. However, a group of nearly 20 U.S.
lot of the more sophisticated machinery like China, their edge North American retailers did sign a pact in which they agreed
in the fashion industry had always been basic, simply-con- to inspect all the factories they do business with and to set up
60
structed clothing. And as the fashion industry’s fashion empha- basic safety standards. The Bangladeshi government also has
sis changed, Bangladesh’s importance to the global clothing pledged to raise wages for garment workers and to fix labor
trade rose. In fact, in six years, it rose from the 8th top clothing laws, making it easier for workers to form labor unions.
exporter to the 3rd (after China and Italy). Both Bangladeshi
factory owners and the government were fully aware of the Discussion Questions
importance of this industry to the country. 15­14 Discuss this from a value chain management perspective.
Working conditions for factory employees in developing What happened? How did it happen? Why did it happen?
countries have long been less than desirable. Explosions and 15­15 How do incidents like this affect how managers work with a
fires have been a continual problem, as have other unsafe work value chain?
conditions. (Unfortunately, this isn’t just a problem of the retail 15­16 Do some research on offshoring. What is it? What are the
fashion industry.) Workplace protections are expensive, which benefits and the drawbacks of offshoring as far as managing
doesn’t work with consumers hooked on fashionable “cheap” the operations system?
clothing. However, with this latest tragic loss of life at this 15­17 What can managers learn about managing operations from
specific garment factory, the fashion industry’s decisions— this situation?
good and bad—are now on the world stage for everyone to 15­18 Societal moral issue: Although enforcement of worker safety
in Bangladesh is clearly lax, government officials clearly don’t
see and criticize. Says one outspoken critic, “What happened want global businesses withdrawing from the country (and
in Bangladesh is a game-changer because of the gravity of the moving the problem somewhere else) and driving it deeper
situation and tremendous loss of life.” Now public policy and into poverty. Discuss.
governmental groups around the world are turning up the heat 15­19 Personal moral issue: Would you pay a higher price for
on Bangladesh to reform its labor standards and are pressuring “ethical” clothing? Why or why not? Discuss.