Question

Since the 1980s, the US apparel manufacturing industry has moved to Southeast Asian countries to take advantage of low cost of labor. The American consumers are enjoying the cheap apparel made in these countries however this benefit comes with a cost to the people who work in these textile factories. The collapse of the Bangladesh textile factory that caused the death of over a thousand people in 2013 made a huge echo in the western world. In this discussion forum, we want to take a deeper look at the ethical issues in the global environment. Do American companies have a responsibility to ensure the health and safety of the workers who manufacture the clothing they sell although labor laws are not enforced in these countries? Please research recent news and give other examples. Are American firms committed to increasing labor standards in their host countries?

Answer 1

American companies are the MNC enterprises who identify the low cost labor available in the countries like Bangladesh in India, as an opportunity to reduce their cost of production and increase the profit margin in the textile industry. There are different levels of regulatory framework, but it may not be up to the standard if these regulations are compared to regulations applied in the western or their own host nation of the USA. So, there are ethical considerations, these companies should make. It will not only help these companies to bring sustainability in operations, but also it will enhance the company brand to be more accepted, respected and reputed in the country of low cost labor. It can help in attracting the local talent while also developing their own market in that country. There are different consideration with ethical perspective.
The first ethical consideration is the use of child labor in the factor setup. It is still not prohibited, in the countries like Bangladesh. But, it is the ethical responsibility of the companies to make strict guidelines and prohibit child labor. Rather, the companies should contribute toward the education of children where they operate. The second ethical consideration is towards the proper employment conditions offered to the women as more number of women are employed. A decent wage and leave structure, women friendly work place are the ethical requirements, even if the laws don’t require it. The third ethical consideration is provisions for the safe working environment (on the guidelines of OSHA) so that any kind of hazard is prevented inside the factory setup. It will help the workers to be fear free and productivity will also improve. It will set an example to the other companies and voluntary initiatives towards the safety at work will take place. So, American firms are committed, but they need more proactive plan of action.
Examples can be taken from other industries such as Apple in the country of China and Starbucks in the countries such as Brazil give strict focus upon the ethical perspective of the operations and try to give the best working environment to their outsource locations.