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Practices of ethical consumerism and the issue of Rana Plaza in Bangladesh

On April 24 2013, 1134 people were killed and 2,500 were injured when the Rana Plaza building in Savar, Bangladesh collapsed on top of garment workers inside its factories. It would be known as the worst accident in the garment industry anywhere.

This happened only five months after a horrific fire at a similar facility prompted leading multinational brands to pledge to work to improve safety in the country’s booming but poorly regulated garment industry.

Labour groups, Western clothing companies, the Bangladeshi government and others have made some progress toward preventing similar tragedies, but more still needs to be done.

There was never any doubt that improving working conditions in Bangladesh, one of the world’s poorest countries, would be incredibly difficult. The collapse of Rana Plaza was just one, though by far the worst in a series of industrial accidents in Bangladesh’s garment industry, which has become one of the biggest exporters of clothes to the United States and Europe because of its low wages.

It was later discovered that 28 brands that sourced clothes from the plaza included Primark, Bennetton, Mango, Matalan and Bonmache, prompting public concern
 
about the working conditions of garment factories around the world which contribute to western high street fashion stores.

Ethical consumerism encourages people to think about how the products they buy are sourced and produced which are not harmful to the environment and society. This can be evidenced through simply purchasing eggs that are free-range or boycotting goods/companies which promote child labour or unsavoury working conditions.

Ethical consumerism is a growing market. A recent report from the Co-operative Bank showed a third of UK consumers claiming to be concerned about ethical consumption, with a large number of the public willing to challenge and boycott companies which do not comply with ethical standards.

You are required to write an analytical business report that covers the following tasks:

1. Discuss the ways in which companies, like the ones mentioned in the extract above, that sourced clothes from the Rana Plaza can help improve business practices to prevent recurrence of events of this nature.

2. Choose any company, research and evidence how they operate ethically, taking into account their approach to consumerism, values and environmental friendliness.

As defined by, Kind and Poltera (2013) ethical consumerism is a process of buying and using products and services from a company. However, adding ethical means that the produced goods and services will never harm the environment, society and the people of company or the society. Practice of ethical consumerism means that, the company never harms the workers and the produced goods of the company also will not harm the workers of the organization.

Consumers should also be conscious about the fact that, from where and how the goods are produced and sourced for them. Practice of ethical consumerism involves by producing organic foods, fair price and fair trade goods. The produced goods should not exploit child worker also. Business companies should keep enough facilities to the employees. Companies have no right to exploit the workers and harm them also (Lewis and Potter, 2013).  

Ways companies can improve business practices to prevent recurrence of events like the Rana Plaza tragedy

However, Meisler (2014) stated that, people are tending more towards the ethical products. They have become very choosy about the products and services of several organizations. Especially, for the countries of first world, like United Kingdom, America has emphasized more to the ethical goods.

Various reports have showed that, the people of U.K have become concerned about the ethical products. They also have started to boycott those companies who do not produce ethical goods. People have become more conscious about the safety of the workplace. Therefore, consumers often boycott those companies who encourage the practice of child labor and bad condition of work to the workers of the particular organizations ().

As stated by, Michalos (2013) ethical practices also involve with the practices of providing more safety to the workers of the organization. Every companies of business should also be aware about maintaining the relationship with the workers of the organization. They should be treated like members of family. Workers of a company should get safe as well as productive and harmless environment from the company as well as the work practices of the company. A company should also maintain the relationship with the suppliers and manufactures of the company. The company should maintain the initiatives of ethical trade among the suppliers and manufactures of the organization.

On the other hand, Parboteeah and Cullen (2013) stated that, ethical practices of a company should involve monitoring the performance of the suppliers in order to identify the key problems and issues of the organization. Several business companies address the problems of the organization. Many companies build capability in order to avoid the specific issues of the workers of the organization. These practices therefore help to the company for working effectively among the complex situation of the organization. Principles and values should be maintained by the organization in order to provide ethical trade to the workers of the organization as well as the consumers of the product or service of the organization.

As stated by, Poruthiyil (2013) ethical practices of an organization helps to maintain an effective relation with whole group of stakeholders of the organization.

In the case of Rana Plaza, 1134 workers have been killed and more than 2500 people have been injured due to major collapsed of the building in Bangladesh. This incident is the worst incident within the garment industry. Before this incident, an incident of devastating fire also has been broken in this country. More than 28 brands of Western countries have been sourced from the Rana Plaza. Those companies are Primark, Mango, Bennetton, Bonmache etc. However, it is very sad incident that, this Rana Plaza contribute in the market of high street fashion of several developed countries while the condition of this plaza in the developing countries are so poor.  

The working condition and the infrastructure of the manufacturing industry of Bangladesh are very poor; therefore, this incident should not be neglected by those companies who take advantage from this plaza. Basically, Tlaiss (2013) stated that, countries like United kingdom, America easily get workers from this developing countries by paying very low wages to the workers.  Here have been many incidents about the fire breakage or poor working conditions in these developing countries.

Approaches to ethical corporate social responsibility, including values, consumerism, and environmental friendliness

However, some Non Governmental groups, Government of Bangladesh and some Western companies of clothing have taken some initiatives for the development of the clothing manufacturing industry of Bangladesh. However, these initiatives are not sufficient for the proper development of the garment industry. These initiatives also do not produce ethical practices. Safety of the workers has been deprived in this garment factory. However, those Western companies should provide enough fund and other elements for providing various initiatives of ethical trade (Schreurs et al. 2013).

According to, Koumpis (2013) Primark is one of those companies who try to maintain effective corporate social responsibility by delivering some works for the people of developing countries.  However, for the case of Rana Plaza, consumers often have been started to refuse the products of Primark as the work safety of their workers in Bangladesh have been disturbed.

Therefore, Primark should take some initiatives for building effective as well as efficient practice of ethical trade by giving work safety and atmosphere to the workers of Bangladesh and other countries where they have their suppliers and manufactures or the workers. Primark often put various types of no governmental initiatives for the people of the developing countries. Therefore, Primark should take initiative for the sufferer by providing medical and financial aid (Hudson et al. 2013).

By taking these initiatives, people of Rana Plaza should overcome the issues. Compensation should be given by those companies whose products are sourced from Rana Plaza. Several contracts have been signed within the government of Bangladesh and the organization. Fire and building safety measures should be taken by the companies. Several initiatives from the western companies should be taken for the purpose of making effective building that has the fire protection capacity, CCTV facility etc. Funding is really essential for the building effective infrastructure of the garment factory of Bangladesh. Apart from these, they should ensure the fact that, the building where clothes are manufactured are well protected and well equipped. Those companies should consider the demand of the workers also. They should be aware about the fact that, no female is harassed by any person in any circumstances (Hudson et al. 2013).

Unilever Corporation is a multinational company that produces and delivers various types of consumer products worldwide. This company has merged with different small companies of various developing countries. Products of Unilever involve foods, products of personal care, cleaning goods and beverages. It has many brands and all those brands are often recognized as producer of ethical products and goods. This company delivers products those are environmentally and socially effective with positive impact (Unilever.co.id, 2015)

According to, Hamelin et al. (2013) Unilever Corporation delivers its effective function of business for health and safety. This company has taken various initiatives for maintaining the work and safety of the employees. It has maintained strong potential of building effective products for the environment and safety of the people.

Safety and Environmental Assurance Centre (SEAC) therefore assures the sustainability of the products and the manufacturing process of the organization. Unilever applies latest technology in order to produce products. It has maintained interaction with global scientist in order to know about their products while meet the needs of the environment or not (Unilever.co.uk, 2015).

Primark's corporate social responsibility initiatives

Unilever Corporation ensures safe work place for the employees. SEAC ensures that the used chemicals of Unilever are safe for the environment. They do not taste the products to animal in order not to harm the animals.

On the other hand, Hamelin et al. (2013) argued that, Unilever is a company that tries to respect and promote human rights and effective labor practices among the employees of the organization. Core value of this company is to respect the rights of human with value. Unilever has made partnership with different labor organization and civil society organization to promote human rights of the employees of this company.

In order to ensure ethical trade in the business United Nation has given some guidelines those also provide guidelines for protecting the rights of the human. Key elements of those guidelines are commitment, integration of the policies of the business organization and proper and effective implementation of those policies with the suppliers, remediation through mechanism of grievances (The Guardian, 2015).

Several initiatives have been taken by Unilever in order to promote various initiatives of ethical trades among the consumers and employees and society also. Those are stated by (Ferrell et al. 2014) as follows:

Freedom of association and collective bargaining: Unilever has enabled the rights of the workers within a decent condition of working atmosphere. Rights of the workers are involved in the fundamental rights of International Labor Organization.

Living wages: The concept of Living Wages is one of the most conflicted terms. Often various NGOs debate about the concept of living wages. Unilever therefore provides living wages against the recognized wages and the benchmark of poverty. Their take home pay structure often meets the demand and basic need of the workers.

Hour of working: Unilever provides extra wages of its workers at when the workers do overtime job for meeting the predetermined level of production of the company. There is no grievance mechanism within the work of organization.

In order to analyze and explain the process of ethical trade of Unilever, the guideline of United Nations have been compared by the author in order to understand the action of Unilever does meet the expectation  of those guidelines or not.

As argued by (Firth et al. 2013) Unilever thus has made commitment towards its role of social and environmental responsibility within the global perspective. This organization also has made commitment for ensuring effective labor and human rights to all the employees of this particular organization. Unilever has acquired a Unilever Sustainable Living Plan in order to ensure effective sustainability to the business operation of this company among the competitive sector of market. While making commitment to the effective working atmosphere to the employees and god practice of consumers, labor rights are not entertained by the company. However, this company has made the commitment to ensure good working environment to the workers (Fatic, 2013).

On the other hand, Gunderson (2013) stated that, labor practice is till often misunderstood by the workers. They have no clear idea about the rights of them. Working practices of Unilever often promote excessive working hour and precarious work to the laborers within the supply chain network of Unilever. Internal tracking mechanism is not there that helps to manage risk within the system of business.

Western clothing companies' role in the Rana Plaza tragedy and fair trade

There is lack of internet reporting mechanism that helps to cover the effectiveness of dealing with several issues of labor. However, Unilever has shown an effective level of transparency that helps to engage with different types of stakeholders of the organization (Ethicalconsumer.org, 2015).

However, Unilever has made an effective and significant commitment to the social and corporate responsibility towards the employees. Unilever has taken various initiatives in order to promote sustainable business within the structure of the organization. They promote ethical products to the consumers. They have taken various initiatives in order to promote safe and motivated work environment to the employees of the organization.

Conclusion

As stated by, Fatic (2013) an ethical consumerism can be defined as the choice of consumers by the information of particular issues of ethics. Often consumers buy products or services those are not manufactured by using child labors, manufacturing goods by destroying animals or environment etc. Therefore, Henn (2000) argued that, ethical consumerism can be called as the key driver of various types of ranges for the approach of ethical trade. Ethical consumerism can provide an alternative approaches to the business. Ethical consumption of the consumers has been increased that every companies are trying to provide ethical goods for the consumers.

Recommendation:

  • Good infrastructure for the workers in the organization

  • Business Company should look after the well being of the employees

  • Business Company should look after that the workers are not harassed in the workplace

  • Company should not include any child labors in order to complete the whole job

Reference list

Ferrell, O., Fraedrich, J. and Ferrell, L. (2014). Business ethics. [s.l.]: Cengage learning.

Granville, B. and Dine, J. (2013). The processes and practices of fair trade. New York: Routledge.

Lewis, T. and Potter, E. (2013). Ethical Consumption. Hoboken: Taylor and Francis.

Parboteeah, P. and Cullen, J. (2013). Business ethics. New York, NY: Routledge.

Cuñat, V., Gine, M. and Guadalupe, M. (2013). Corporate Governance and Value: Evidence from “Close Callsâ€Â On Shareholder Governance Proposals. Journal of Applied Corporate Finance, 25(1), pp.44-54.

Fatic, A. (2013). Corruption, corporate character-formation and "value-strategy". Filoz drus, 24(1), pp.60-80.

Firth, M., Gong, S. and Shan, L. (2013). Cost of government and firm value. Journal of Corporate Finance, 21, pp.136-152.

Gunderson, R. (2013). Problems with the defetishization thesis: ethical consumerism, alternative food systems, and commodity fetishism. Agriculture and Human Values, 31(1), pp.109-117.

Hamelin, N., Harcar, T. and Benhari, Y. (2013). Ethical Consumerism: A View From the Food Industry in Morocco. Journal of Food Products Marketing, 19(5), pp.343-362.

Henn, W. (2000). Consumerism in prenatal diagnosis: a challenge for ethical guidelines. Journal of Medical Ethics, 26(6), pp.444-446.

Hudson, M., Hudson, I. and Edgerton, J. (2013). Political Consumerism in Context: An

Tlaiss, H. (2013). Determinants of job satisfaction in the banking sector: the case of Lebanese managers. Employee Relations, 35(4), pp.377-395.

Meisler, G. (2014). Exploring emotional intelligence, political skill, and job satisfaction. Employee Relations, 36(3), pp.280-293.

Michalos, A. (2013). The Business Case for Asserting the Business Case for Business Ethics. Journal of Business Ethics, 114(4), pp.599-606.

Poruthiyil, P. (2013). Weaning Business Ethics from Strategic Economism: The Development Ethics Perspective. Journal of Business Ethics, 116(4), pp.735-749.

Schreurs, B., Guenter, H., Schumacher, D., Van Emmerik, I. and Notelaers, G. (2013). Pay-Level Satisfaction and Employee Outcomes: The Moderating Effect of Employee-Involvement Climate. Human Resource Management, 52(3), pp.399-421.

Experiment on Status and Information in Ethical Consumption Decisions. American Journal of Economics and Sociology, 72(4), pp.1009-1037.

Khalaf Alharthey, B. (2013). Building customer satisfaction from the perspective of employee satisfaction. International Journal of Academic Research, 5(2), pp.297-301.

Kind, A. and Poltera, M. (2013). The value of corporate voting rights embedded in option prices. Journal of Corporate Finance, 22, pp.16-34.

Koumpis, A. (2013). Learning from Mistakes Results in Increase of Corporate Value. Int. J. Adv. Corp. Learn., 6(3), p.16.

Ethicalconsumer.org, (2015). Ethical Consumer:  the alternative consumer organisation. [online] Available at: https://www.ethicalconsumer.org [Accessed 27 Feb. 2015].

The Guardian, (2015) Rana Plaza | World news | The Guardian. [online] Available at: https://www.theguardian.com/world/rana-plaza [Accessed 27 Feb. 2015].

Unilever.co.id, (2015). Unilever Indonesia | Indonesia. [online] Available at: https://www.unilever.co.id [Accessed 27 Feb. 2015].

Unilever.co.uk, (2015). Unilever UK & Ireland | UK & Ireland. [online]
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