Rana Plaza Case Study

Over the years, international clothing firms have hired the services of numerous factories and sub-contractors in developing countries to assemble their products. In most of these countries, working conditions, employees’ safety and even rights are disregarded in order to acquire the greatest possible profit while keeping product prices as reasonable as possible for consumers. Despite criticisms from trade unions, this procedure has gradually become the key to many companies’ revenue and success in the industry. Unfortunately, not until the factory collapse of Rana Plaza in Bangladesh did greater reproval and actions from trade unions and even consumers arise. This has forced firms to seriously re-evaluate their production means and figure out ways to prevent similar misfortunes in the future.

They fear the risk of another disaster of similar magnitude would cripple the company’s future due to ever-growing controversies and outrage by the public. Support from other firms and trade unions to improve safety conditions of factories would consequently elevate production costs in Bangladesh.

Leaving Bangladesh would cost owners greatly but the existence of numerous manufacturing countries is plenty. Thanks to globalization, countries such as, Indonesia and Vietnam, would gladly welcome these clothing companies to place their production activities here. Not to mention, these developing countries offer similar benefits with Bangladesh namely, cheap labor and rent, abundant workers, and low restrictions on pollution emission. Thus, they could resume their operations relatively swiftly upon leaving Bangladesh and recover their losses.

Some stakeholders – Bangladeshi government, investors, and employees – are adversely affected because they will suffer an economic loss, face relocating costs and time, and also severe income loss from unemployment. Other stakeholder – community – would benefit because pollution emission levels would decrease bettering the living

Implementing a wide range of safety measures and equipment in Bangladeshi factories, and training its staff would result in higher monetary expenditures for firms but it will be a viable long-term and reliable solution for the ongoing concerns regarding unsafe working conditions in Bangladesh. As foreign firms, it is their responsibility to inflict as little damage as possible towards the host country and build a sense of trust with citizens. These upgrades could prove to employees and the Bangladeshi community that firms not only focuses on their earnings but also value their manpower’s welfare. As a result, goodwill is formed between firms and their subordinates, making them more inclined to aid firms in reaching their