Business Organization And Policy Of Rana Plaza: Analysis Of Ethical Issues And Approaches By MNCs

Executive summary

Describe about the Business Organization and Policy of  Rana Plaza?

The report consists of the brief analysis on the incident of Rana Plaza of Bangladesh in which large number of workers died and few were injured. The main reason for collapse of Rana plaza is discussed in the report with the help of case study given. The report also focuses on the importance of ethics in different MNC’s. Every company has their own set of ethics, rules, policies and practices which help organization to maintain integrity and accountability within the work place. The report consists of different approaches used by different MNC’s regarding their ethics and values. The positive impact of ethics in a company is explained in this report. Ethical consumerism is also discussed in report with its importance for the consumers.

The report consists of the analysis study done on the collapse incident of Rana plaza, reason behind it and the ethical consumerism process. Report also deals with the identification of the ethical issue in relation to the incident. Ethical consumerism is the process by which companies motivate their consumer to think how the whole process of production and sourcing the product whether it is ethical or unethical. After the collapse incident of Rana plaza many companies decide to work on their safety first to reduce the risk of same incident in future (Rabha, n.d.). Many companies are focusing on the ethical way of working and the ethical security of their employees which will increase the level of loyalty of employees towards company and their performance which will be beneficial for company. The report main focus is on the background of the factory, investigation, finding and the ethical issues involved (Hill, 2008). The reports also have a discussion about the role of the MNC’s associated with the factories that have done work on strengthening the ethical obligations to the workers of Bangladesh. This report consists of a brief discussion on the importance of ethics and the recommendation what organization should do to improve their ethical condition.

The building of garment factory Rana plaza is eight storied with approximately have 5000 employees, banks and several other shops. The main MNC’s to which the factory manufacture apparels are Mango, Primark, Wal-Mart, Joe Fresh, Benetton, Matalan, Monsoon Accessorize, EL Corte Ingle and Bonmarche (Henniker, 2014). Although these brands are famous among the western customers but the supply chain of these companies are not ethical (Thompson, 2005).  The deadly disaster which took place in Rana plaza was a case of corrupt system and the unethical construction.The other companies who are associated with Rana Plaza decided to contribute the amount of recovery so that it can be done as early as possible. After this incident many MNC changed their working style and also increased the level of security for avoiding this type of incident in future.

Ethical consumerism is the process by which company encourages their consumers to know the whole process of production and servicing which they are buying. Basically ethical consumerism is for consumers who are buying the product should know whether the product is made without harming the environment or not. Consumers should avoid using the products which are produced by harming environment (Boylan, n.d.). By doing so they will increase the level of positive buying in the market. Consumers by ignoring the unethical products will influence company to produce product by not harming the nature. The main MNC’s to whom the factory used to manufacture the apparels are not having the ethical supply chain which harms the nature or the environment. Every customer before buying any product should make sure that the production cycle of the product is ethical i.e. while production of the product nature, animals, environment was not threaten (Campuzano and Mula, 2011). Consumers should try to avoid using such product which harm the environment so that the companies are forced to stop unethical production cycle. There were many industries before ethical consumerism which for their production used to harm animals and nature. The main steps to stop them do so can be taken by the consumers by boycotting or avoiding these products use (Noure Elahi, n.d.). By this step of consumers company will automatically avoid harming the environment for production of their product (Healey, 2007). Ethical consumerism is very important for both company as well as the consumers. Every consumer should be aware of the process by which the products are produced.

Background of Rana Plaza

Unethical supply chain system- Due to lack of accountability the supply chain system of Rana plaza was not transparent (Collins, 2012). To increase the profit level many companies do unethical supply chain and production. The challenge which company has to face is making their supply chain system ethical without effecting there expenditure cost.

Infrastructural integrity- The main reason behind the collapse of Rana plaza was the poor and unethical construction (Devinney, Auger and Eckhardt, 2010). The high range of profit induced the owner to overlook the ethical manner of construction of the building. Many land experts said that the building was constructed on a potential soft ground due to which building collapsed.

Unethical labor practice- According to (Simpson and Taylor, 2013) political system of Bangladesh labors were unable to protest against the workplace harassments and the unethical duties performed by the company. Every country has their own labor law which is to be mentioned under National labor law but Bangladesh labor law is not mentioned under National Labor Law due to which there was lack of opportunity for the laborers (Healey, n.d.).

Poor working condition- The wage paid to workers in retail sector of Bangladesh is very low due to which the workers are de motivated towards the company.

Lack of business ethics in global business- Now days companies are more concern about their financial outcome rather than the business ethics, which increases the level of risk regarding security and unethical production of the product and there supply chain system (Schwartz and Harris, 2014).

Initially the MNC’s which were associated with Rana plaza garments factory never focused on the ethics, rules and the regulations which the factory has adopted but after the collapse incident of Rana Plaza they started working on ethics, rules and regulations (Garver et al., 2007). The collapse incident was the live example for other business organization for manhandle and mistreated of workers. After this collapse incident every company focus on the workers working duration, wages and etc which can help in motivating there workers (Hudson, Hudson and Edgerton, 2013). The main reason why MNC’s became aware of the ethical condition of workers, importance of ethics, rules and regulation in the company was the collapse incident of Rana Plaza (Martin, 2010). It is important for every MNC to follow ethics, rules and regulations within and outside the company in trading and supplying process to reduce the risk of any hazard.

There are different steps which every MNC should consider before trading and other processes are as:-

To make people free to choose their employment- Every employees should have right to choose where they want to work according to their skills and specialty (Leonard and Gonzalez-Perez, 2013). No head of the team can force or threaten his subordinates to work as per his wish. If the employees are made to work for extra time then the company should pay them as per there wage rules.

Working condition and environment should be secure and hygienic – The place where a person is working should be hygienic and secure. Every MNC should make their employees secure so that they are motivated to work better (Jamali, 2010). For maintaining the hygiene company should encourage their employees so that they keep their surrounding clean.

Analysis of Ethical consumerism

Working hour should be limited - The working time or duration in a company should be decided as per the laws of the government (Luetge, 2013). The working time should be limited no head of the company can force to work for extra time without additional wage.  

No threatening of workforce- The workforce of the MNC should not be threatened physically or mentally within or outside the working place. As per the different laws regarding the workforce they can complain to the company.

Now a day MNC’s have changed there working condition to improve their profit as well as ethics. Companies like Wal-Mart, Mango, Primark and etc are trying to improve there working condition by providing security and hygiene to their employees.

Different ethics followed by MNC’s are as-

• By provide proper security regarding health to the employees of the company by ensuring their working time and environment in which they are working.
  
  
• To provide basic facilities to employees in workplace like clean water for drinking and other purposes, neat and clean surrounding in which they are working.
  
  
• Companies provide their employees proper training for keeping their workplace hygienic without giving harm to others and the environment.
  
  
• Before starting any working relation with any person company decide their wages, and other allowances as per the laws of the government.
  
  
• Company maintains the occupational health and safety of their workers to motivate them to perform better.
  
  
• Companies now a day is forcing their employees to work maintain the ethics of the company inside and outside the workplace.
  
  
• Companies are trying to avoid the mental threatening done to their employees by increasing the work pressure.
  
  
• To increase the productivity head of the companies are told that no worker should be force to do work if he/she is not willing to do that work.
  
  
• Every company has its own organizational ethics and other ethics which every employee working should follow.
  
  
• Organizational ethics are different formal and informal standards of conduct which guide or help employees about their behavior in the workplace (Tang, Teo and Wei, 2008). To maintain the dignity in workplace companies have their own set of policies, practices which one has to follow.

• Ethics helps the employees to maintain there working time in the company as well as the policies and practices of the company.
  
  
• Ethics helps company to motivate their employees to not misuse the assets of their workplace (Simpson and Taylor, 2013).
  
  
• Ethics help employees to stand against the harassment (if any) done by the company.
  
  
• Ethics helps in decreasing the level of gossips and grapevine within the workplace (Lenk, Hoppe and Andorno, 2007).
  
  
• It helps in maintaining the integrity of the employees toward the company.
  
  
• Ethics are the method by which company maintain the behavior of their workforce within the workplace.
  
  
• Organizational ethics helps in maintaining the employees’ commitment towards the company and their job.
  
  
• Ethics are important for every company to maintain discipline among the employees.

Conclusion

The report is about the biggest disaster which held in Bangladesh, the collapse of Rana Plaza. By the above analysis done in report it is clear that the main reason for destruction of Rana plaza were the unethical activities, poor supply chain system, excessive work pressure on the work force, poor infrastructural facility, low wage given to workers and the high demand of poor quality clothes (Johnson, 2012). After this incident many MNC’s have improved there working system in Bangladesh by focusing on their ethics. The main reason why still Bangladesh is struggling in improving there working condition in companies is the lack of appropriate labor policy. The report also focuses on the ethical consumerism which is used to make consumers aware of the production cycle of the product they are using (Leonard, 2010). This report also discuss about the approaches which different MNC’s adapted to improve their condition regarding ethics and working condition.

• Every organization should have set of policies and practices as per the government law to maintain the integrity, commitment, accountability and the behavior of the employees (Greve, 2013).
  
  
• Ethics should be implemented in every organization to increase the team work.
  
  
• Companies should motivate their employees for working as per the policies of the company (Kolb, 2008).
  
  
• Every company should perform their jobs without harming the nature or the environment surrounding them.
  
  
• Ethics helps in maintain the security of workforce within the company so that the employees feel secure.
  
  
• Before starting any new trading or other process organizational ethics should be explained.
  
  
• Company should try to focus on their ethics, rules and regulation more that there financial profit.
  
  
• Ethics helps in maintaining the proper communication among the employees so that the peaceful environment is maintained within the workplace.
  
  
• Organizational ethics helps in reducing the corruption level within the company, so every company should follow.
  
  
• The workplace should be hygienic and the environment should be motivational so that all employees perform better.
  
  
• Company should have proper wage and reward structure, so that all employees get motivated automatically for working.
  
  
• Company should follow proper hierarchy for communication and working command among the top level, middle level and low level employees.
  
  
• Every employee should be provided with proper health and security systems while their working process.
  
  
• Before starting main work company should plan good competitive strategy, marketing and other strategy to increase their profitability, taking into consideration their stakeholders.
  
  
• Company should always perform their supply chain system and production system in ethical manner.

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