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You are the CEO of a major U.S. apparel company that contracts work to garment manufacturers abroad. Employees of the contractors report 20-hour workdays, pay lower than the minimum wage, overcrowded living conditions, physically abusive supervisors, and confiscation of their passports. Contractors and government officials say local labor laws are adhered to and enforced, though abuses appear widespread. You send inspectors to the factories abroad but they uncover no labor violations. A labor-advocacy group claims that supervisors coached workers to lie to your inspectors about conditions and threatened workers with time in makeshift jails without food if they talked.

Should you implement a monitoring system to learn the truth about what is happening?

Do you help the factory improve conditions, withdraw your business, or simply do nothing?

How might your actions affect your relations with the factory owner and your ability to do business in the country?
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6 days ago
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Should you implement a monitoring system to learn the truth about what is happening?

The implementation of a monitoring system is important. A keener sense of business ethics and social responsibility are critical to the success of MNC. These concepts serve as the guiding principles that influence the way individuals and organizations behave within society. The issues of personal ethical responsibility and reasoning should impact how managers make ethical decisions under specific circumstances and how they fared.

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Do you help the factory improve conditions, withdraw your business, or simply do nothing?

The answer depends on the overall outlook of the market and opportunities that it presents.  If the long term opportunities are good, it is important to note the business does have a social responsibility with regard to topics such as human rights, fair trade, and sustainable development.

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How might your actions affect your relations with the factory owner and your ability to do business in the country?

It’s extremely important that your company be thorough and transparent throughout the monitoring process. The monitoring process could seem more impartial by contracting an independent organization to conduct the investigation, rather than employ someone with whom the company might be suspected as having social or political connections. You could also have the report made public to all parties simultaneously to eliminate the perception of the report being adjusted. To implement and maintain rapid, sustainable improvements: monitor and verify codes of conduct regarding labor practices, disseminate information to workers explaining their rights, appeal to government agencies on effective ways to raise labor standards, explain how their reputation as being “good guys” in the labor standards arena can create a useful marketing tool and opportunities for firms and countries by differentiating themselves when competing in the apparel export market.
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