Investigation Of Rana Plaza Case: Ethical Issues Involving Multinational Companies (Essay).

Investigation of Rana Plaza Case

(1) In April 2013, the Rana plaza garment factory collapsed upon its workforce, killing appoximately 1,200 workers and injuring about another 2,000. The incident serverd to highlight the plight of low-paid Bnagadeshi workers forced to work in dengerous conditions for the profit of big multinationals and shoppers in first world countries who want $2 shirts.

You are to investigate what happened at Rana Plaza and identify the ethical issues involed. Explain whether these issues are particularly difficult or unique to multinational companies(MNCs).

(2) Continuing with the Rana Plaza case, investigate what has happned since for the people of Bangladesh, and whether the MNCs associated with Rana have more to recognise and act upon their ethical obligations.

You should also look at how social media has placed pressure upon these MNCs through activism and stakeholder pressure. Does social media continue to play a positive rule for the workers of Bangladesh, or is it only interested in a quick "Twitter moment" ?

(1) Investigation of Rana Plaza Case: This section of analysis is focused towards investigating the Rana Plaza case with a view to assess the actual incidents that have taken place within it, and also the ethical issues involved in it. An analysis of the case of Rana Plaza indicates that it is a factory building that collapsed in 2013. The building is mainly known as garment factory located in the capital city of Bangladesh i.e. Dhaka. Recently in 2013, the building was faced with a tragedy whereby it collapsed and accounted for killing more than 1100 people and there were around 2000 people that were injured. It has been a eight story building house that comprises of several garment factories. Bangladesh is known as the most significant target destination in terms of accounting garment factories within it and it has achieved the brand reputation as being the second largest apparel exporter in the world after China. However, the case of collapse of Rana Plaza has raised significant level of questions with respect to ethical values of the people working in the factory and also the international apparel manufacturers for whom the work is being carried out (One Year After the Rana Plaza Catastrophe : Slow Progress and Insufficient Compensation, 2014).

An analysis of the case in detail indicates that there were several cracks that were evident in the building structure on the day before the collapse, but there were no such steps that have been undertaken by the authorities in this regard. The cracks were not considered as important and the factory workers were allowed to work on it. Governmental authorities also failed to recognise the illegal constructions of Rana Plaza, and this is why the workers were allowed to work on it. Apart from the government failure, another major cause of the collapse of Rana Plaza is mainly the increasing level of cruelty of western companies for whom the garments products are being manufactured at Rana Plaza. These companies were concerned only with getting cheaper garment products so that they could be sold to their customers that demand lower rates. The working conditions of the workers in such garment factories are not given importance, and this has been the reason leading to such cases of factory collapses and loss of worker’s lives. As in the given case of Rana Plaza, after identifying the cracks, employees were not stopped from working, rather they were threatened to work under such hazardous risky conditions by indicating them that they would lose their jobs if they would not continue to work (In Bangladesh, Rana Plaza Victims Still Await Compensation, 2013).

Identification of Ethical Issues Involved

Overall, the situation of workers is identified as ineffective from the point of view of supporting the production process. The workers are exploited to give their maximum output and in return, they are being paid significantly lower rates for their inputs as contributed by them.

Identification of Ethical Issues Involved: An analysis of the case of Rana Plaza indicates about the involvement of certain major ethical issues in it. The most significant ethical issue as present is mainly in terms of working conditions as provided to workers. It is mainly the responsibility of the manufacturers that they should provide sound working conditions that is safe enough to them. But the case of Rana Plaza indicates that this ethical value was missing in it, as the working condition as provided to workers was not safe enough to them. Even after cracks in the building were noted initially before the collapse had taken place, there were no such initiatives being undertaken by the owner of Rana Plaza. The workers’ life was not considered important and they were allowed to work on it. This has been a clear indication of the ethical values being missing from it. Secondly, the ethical issue is noted in respect to the governmental authorities responsible for the regulation and monitoring of safe and secured working conditions for employees. It is the responsibility of the appropriate authorities to monitor and safeguard the interest of workers in an organisation, but this aspect was lacking in the given case of Rana Plaza. The governmental authorities have not undertaken any measures to regulate the employee workings across Rana Plaza even after cracks have been noted. This indicates that the ethical consideration was not given any importance by the governmental authorities and their breach of security factor has resulted into such collapse. Apart from this, the case study analysis of Rana Plaza has also indicated about the security breach especially in terms of the role of employers safeguarding the interest of the workers. As the manufacturing of garments at Rana Plaza is carried out for its clients that are mainly from the countries such as US, Canada and UK, it is essential that such westernised companies should provide a highly safe and secured working environment conditions to their employees. But this aspect has altogether being ignored by the employers, and there has been compromises being made by the employer with respect to the workers security. This is therefore a major example of the breach of security related threat in respect to the Rana’s case (In Bangladesh, Rana Plaza Victims Still Await Compensation, 2013).

The above analysis indicates about the various major areas whereby ethical issues have been observed.

Uniqueness of these Issues in Multinational Companies: In respect to multinational companies, these issues are quite unique, as these companies are focused towards making profit from their operations. The primary reason behind the selection of these developing economies such as Bangladesh, China etc is mainly to achieve operational efficiency so that there can be direct contribution of cost effectiveness in the process can be achieved. The primary reason behind exploring these developing economies by the multinational companies is mainly to exploit the opportunities as available in respect to developing economies. The cheap availability of labour drives multinational companies to start-up their ventures in such developing economies with a view to exploit the opportunities as available within it. This leads to their higher level of exploitation of opportunities in the form of getting their products and services manufactured at lower cost. Thus, the multinational companies view it as opportunities whereas from the point of view of workers, it is identified as the unethical practices. This is mainly because they are completely threatened to work under unacceptable working conditions, and the direct impact is evident over their performance. They are not paid adequately for their efforts, and consequences in the form of adverse overall working conditions are also quite evident. This implies that the issues as identified in respect to Rana’s case are quite evident in respect to multinational companies. This suggests that they are unique from the point of view of operations of multinational companies in particular (Rana Plaza factory collapse: Australian clothing retailers yet to sign Bangladesh safety accord, 2014).

Uniqueness of these Issues in Multinational Companies

Overall, the assessment of the case of Rana Plaza indicates that it has been a case of inadequate importance being given to the working conditions of employees whereby despite knowing the existence of cracks in the building, there were no major steps being undertaken to ensure worker’s security. The resulting impact is therefore evident in terms of the collapse of the entire building killing more than 1100 workers. This issue has given rise to the ethics of employers, as this has been the prime responsibility of the employer that they should provide a safe and secured working environment conditions to their workers. However, in the given case of Rana Plaza, the focus has mainly been towards exploiting the conditions of workers with a view to achieve cost efficient production of garments so that they can be sold at cheaper rates to the customers. The analysis also indicated about the ethical issues that are persistent in respect to the different authorities responsible for ensuring safety of their workers. It has also been identified that these types of cases are mostly evident in respect to multinational companies because they aim at exploiting their employees in achieving higher growth and performance.

(2) The analysis of the Rana case above has revealed about significant level of findings with regard to the entire case and also the ethical issues in respect to it. This section of analysis is now focused towards assessing what has happened to the Bangladeshi people and also the major initiatives that are considered by MNCs associated with Rana after the incident has taken place. In addition to this, the analysis also focuses towards assessing the role of social media in pressuring MNCs to undertake measures and initiatives for the people of Bangladesh especially the families that were affected in such building collapse case. In addition to this, the analysis also focuses towards evaluating whether the social media continues to play an important role for the workers of Bangladesh or is it focused towards a quick twitter moment only (Rana Plaza factory collapse: Australian clothing retailers yet to sign Bangladesh safety accord, 2014). These aspects are critically analysed in detail as follows:

Impact on the People of Bangladesh: The impact on the people of Bangladesh has been severe from this largest tragic event which leads to the death of around 1200 people. The problem has been serious and its impact is also significant over the people of Bangladesh and this is mainly because of no proper help being provided to them even after such a longer period of time of the collapse. The survivors of the Rana building collapse are still suffering injuries and loss of income because such injuries restrict them from performing their jobs and responsibilities positively. As a result, the survivors are still facing difficulties in getting their life back to normal. Apart from this, the analysis also indicates that there have not been any kinds of major assistance being provided to the families that have lost their near ones in such collapse, and also to the survivors of such case. This indicates that the impact of such Rana building collapse has been negative over the people of Bangladesh and the survivors are still suffering any major assistance from the appropriate authorities or even from their employers from whom they manufacture garment products (Rana Plaza collapse: Primark extends payments to victims, 2013).

MNCs Contribution in the Case: With respect to the contribution of MNCs is concerned, it is the ethical value of such MNCs that they should contribute positively in terms of assistance to the survivors and the families that have suffered in such building collapse. However, from the analysis of the given case of Rana Plaza collapse, it has been evident that the MNCs have not acted in good faith from the point of view of satisfying the people that have suffered from such crisis. As for instance, an analysis of the existing literature indicates that Human Rights Watch has indicated that international companies that sourced garments from the factories within Rana Plaza are not contributing enough to the financial trust fund that has been set up for the survivors and also for the families of those who have died in the accident. However, this has not been evident in respect to every major company that have sourced the garments from the factories within Rana Plaza. There were certain international companies that have come forward to contribute positively in the form of financial assistance to the people whose families get affected by such collapse of Rana Plaza. One such example is of Joe Fresh which has been a Canadian fashion retailer, and the company has made significant level of financial contributions to the families that have died up in the accident (The Rise of Private Regulation in Global Commerce, 2014).

As per the Clean Clothes Campaign, there were more that $40 million needed in order to compensate families and their survivors, and there is a need to all the international brands to come forward to contribute towards such fund. However, the progress and improvements with respect to their contribution has not that been significant yet, and many of the garments purchasing multinational companies did not even turned up to look at the situation. This has raised ethical concerns with respect to the operations of such MNCs. It has been indicated that half of the brand that have sourced garments from such factories in Bangladesh have not even contributed a penny yet towards the welfare of such survivors. The major garment purchaser such as British fashion chain Matalan, Benetton etc have yet to make contribution towards such welfare fund as designed for the welfare of the families that were victim to such Rana Plaza case. As there are many such companies that have not yet made any such contributions to such welfare fund, yet there are many others that have actively showed their responsibilities by coming forward and have contributed towards the welfare of those affected by it. One such company is Primark which is owned by the British branch of Canadian billionaire family, and it has accounted for massive contribution towards the welfare of those affected by such crisis (Bangladesh: Rana Plaza Victims Urgently Need Assistance, 2014).

Overall, the assessment of the case of Rana Plaza indicates that MNCs contribution has not that been effective towards the common fund which has been established in addressing the concerns of families that have been exposed to the accident. However, some of the MNCs didn’t turn up to contribute towards it while some others have potential contributed towards the welfare of people, and they thereby show their ethical values (In Bangladesh, Rana Plaza Victims Still Await Compensation, 2013).

Social Media Pressure on MNCs: Social media is an important tool that regulate businesses with respect to their actions as undertaken by them. This media can be applied by businesses with a view to create positive as well as negative impact or it can be utilised in desiring any kinds of actions and behaviour on the part of companies. The role of social media in this case of Rana Plaza collapse is also identified as significant. As for instance, it has been analysed that the pressure of social media has been highly significant which has resulted into many westernised companies changed their business practices. It is not only the effect, but the pressure has been significant which necessitates multinational companies to account for their corporate social responsibilities. In this highly technological world whereby different media coexist to affect the performance of business, they have been an important tool in the hands of activists and regulatory authority at large. In respect to the given case of Rana Plaza collapse, it has been assessed that the companies are mainly from international locations, and they sourced garment products from the factories in Bangladesh. Their remote location has although created difficulties in accessing them, but the social media has played an important role in creating awareness within them with respect to their moral responsibilities towards it (Gomes, 2013).

Continuity with respect to the Role of Social Media: In terms of the role of social media is concerned, it has been assessed that it is likely to play its role on continuous basis in terms of favouring the people that have faced the heat from such Rana Building collapse. It is mainly the media that has brought into identification that still majority of the companies have not yet contributed anything to such collapse. This is likely to create social burden or pressure on such companies to remain accountable with respect to their moral responsibilities and come forward to contribute in a positive manner towards meeting up the people’s need in general. This positive role of social media is mainly because of its accessibility factor which suggests that social media is an important medium in disbursing information at a global scale. As a result, any kinds of wrongdoings on the part of companies could be easily highlighted at broader level and this could have a direct level of impact over their reputation in particular. This particular factor drives such businesses in contributing their positive support in accomplishing socially acceptable practices by them. Overall, the role of social media can be considered as significant in this respect (These Retailers Involved In Bangladesh Factory Disaster Have Yet To Compensate Victims, 2014).

References

Bangladesh: Rana Plaza Victims Urgently Need Assistance, (2014) [Online]. Available at: https://www.hrw.org/news/2014/04/23/bangladesh-rana-plaza-victims-urgently-need-assistance [Accessed: 13 January 2015].

Gomes, W. (2013). Reason and responsibility: the Rana Plaza collapse [Online]. Available at: https://www.opendemocracy.net/opensecurity/william-gomes/reason-and-responsibility-rana-plaza-collapse [Accessed: 13 January 2015].

In Bangladesh, Rana Plaza Victims Still Await Compensation, (2013) [Online]. Available at: https://world.time.com/2013/09/16/in-bangladesh-rana-plaza-victims-still-await-compensation/ [Accessed: 13 January 2015].

One Year After the Rana Plaza Catastrophe : Slow Progress and Insufficient Compensation, (2014) [Online]. Available at: https://www.fidh.org/International-Federation-for-Human-Rights/globalisation-human-rights/15179-one-year-after-the-rana-plaza-catastrophe-slow-progress-and-insufficient [Accessed: 13 January 2015].

Rana Plaza collapse: Primark extends payments to victims, (2013) [Online]. Available at: https://www.bbc.com/news/business-24646942 [Accessed: 13 January 2015].

Rana Plaza factory collapse: Australian clothing retailers yet to sign Bangladesh safety accord, (2014) [Online]. Available at: https://www.abc.net.au/news/2014-04-24/australian-clothing-retailers-yet-to-sign-factory-safety-accord/5408028 [Accessed: 13 January 2015].

The Rise of Private Regulation in Global Commerce, (2014) [Online]. Available at: https://insight.kellogg.northwestern.edu/article/the_rise_of_private_regulation_in_global_commerce/ [Accessed: 13 January 2015].

These Retailers Involved In Bangladesh Factory Disaster Have Yet To Compensate Victims, (2014) [Online]. Available at: https://www.forbes.com/sites/clareoconnor/2014/04/26/these-retailers-involved-in-bangladesh-factory-disaster-have-yet-to-compensate-victims/ [Accessed: 13 January 2015].