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WHAT is PuRCHAsing And suPPly sTRATEgy? 165

and oversight by the Bangladesh authorities and for the predominantly Western retailers who
sourced from the Rana Plaza, and similar unsafe factories, to accept some of the responsibil-
ity for the disaster and change their buying policies. Campaigning organisations, including
‘Labour Behind the Label’, ‘War on Want’ and ‘Made in Europe’, urged retailers to be more
transparent about their supply chains. They also called for compensation to be paid. But a
year after the tragedy, the compensation initiative that intended to raise $40m had raised
only $15m, despite being backed by the UN’s International Labour Organisation. Less than
half the brands linked to clothes-making at the building had made donations. Benetton and
Matalan said they preferred to support other funds that assisted victims, while the French
retailer Auchan claimed that they had no official production taking place in the building when
it collapsed so they did not need to contribute towards compensation. Other contributions
were relatively small. Wal-Mart, the largest retailer in the world, offered to contribute about
$1m compared to more than $8m from the far smaller Primark. The Bangladeshi authorities
also came in for international criticism. For years they had made only relatively weak attempts
to enforce national building regulations, especially if the landlords involved were politically
well connected. After the disaster, they promised to apply the laws more rigorously, but such
promises had been made before.
So, what are the options for Western retailers? One option is to carry on as before and simply
source garments from wherever is cheapest. Doing so would obviously be ethically questionable,
but would it also carry a reputational cost, or would consumers not enquire too deeply about
where garments came from if they were cheap enough? Alternatively, retailers could quit sourc-
ing from Bangladesh until they improve. But that may be difficult to enforce unless they took on
the responsibility to police the whole supply chain, right back to the cotton growers. It would
also damage all Bangladesh firms – even those who try to abide by safety rules. This, in turn,
could be damaging to the retailers’ reputations. The third option is to stay and try to change
how things are done in the country. Even before the Rana Plaza disaster, retailers had met with
some interested parties and governments to develop a strategy to improve safety in Bangladesh’s
5,000 factories. Also, some individual retailers had launched initiatives. Wal-Mart had launched
a fire-safety training academy and Gap had announced a plan to help factory owners upgrade
their plants. However, individual initiatives are no substitute for properly coordinated safety
improvements. And anyway, some claim, what right have Western companies to impose their
rules on another sovereign state?

inter-operations arrangements in supply networks
Writers on supply network management have offered several ways of categorising the
arrangements between players in supply networks, and again we distinguish between
the market and resource perspectives of relationship. In terms of the resources with sup-
pliers, what is the degree and importance of the activities that are performed in-house –
from doing everything in-house, through doing the most important things in-house,
to totally outsourcing all activities? In terms of the market relationship, what is the
number of separate supply arrangements and how close are they – from using many
suppliers with little closeness in the arrangements, through to a few close (or even one
very close) supplier?
Figure 5.6 illustrates this. Different types of supply network arrangement can be
positioned in terms of their implied resource scope and market relationships. At an
extreme on both dimensions is the vertically integrated operation. This type of opera-
tion performs everything (or almost everything) within the organisation’s boundaries.
Unless the organisation has chosen to perform the same activity in many different parts

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