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    Minding The Gap

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    Brian Ndege
    This document discusses the ethical responsibilities of multinational companies operating in countries with poor labor standards and corruption, like Bangladesh. It examines whether companies like GAP should be responsible for the practices of their offshore suppliers, whether GAP should sign a legally binding accord on safety standards, and whether multinational firms should continue doing business in countries with these issues. While some argue companies exploit weak regulations, others believe multinationals can work with governments and communities to improve conditions and standards over time.

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    Minding The Gap

    Uploaded by

    Brian Ndege
    87 views5 pages
    This document discusses the ethical responsibilities of multinational companies operating in countries with poor labor standards and corruption, like Bangladesh. It examines whether companies like GAP should be responsible for the practices of their offshore suppliers, whether GAP should sign a legally binding accord on safety standards, and whether multinational firms should continue doing business in countries with these issues. While some argue companies exploit weak regulations, others believe multinationals can work with governments and communities to improve conditions and standards over time.

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    This document discusses the ethical responsibilities of multinational companies operating in countries with poor labor standards and corruption, like Bangladesh. It examines whether companies like GAP should be responsible for the practices of their offshore suppliers, whether GAP should sign a legally binding accord on safety standards, and whether multinational firms should continue doing business in countries with these issues. While some argue companies exploit weak regulations, others believe multinationals can work with governments and communities to improve conditions and standards over time.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    87 views5 pages

    Minding The Gap

    Uploaded by

    Brian Ndege
    This document discusses the ethical responsibilities of multinational companies operating in countries with poor labor standards and corruption, like Bangladesh. It examines whether companies like GAP should be responsible for the practices of their offshore suppliers, whether GAP should sign a legally binding accord on safety standards, and whether multinational firms should continue doing business in countries with these issues. While some argue companies exploit weak regulations, others believe multinationals can work with governments and communities to improve conditions and standards over time.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 5

    Running Head: ETHICAL PROBLEM 1

    Ethical Problem

    Name

    Institutional Affiliation
    EHTICAL PROBLEM 2

    1. Do you think that multinational firms like GAP should be responsible for the practices of

    their offshore suppliers?

    Multinational companies such as GAP has a lot of responsibility in monitoring the effects of

    their interests and activities in the countries in which they operate. While it is responsibility, it is

    not a requirement by law that multinational companies have to respect labor standards.

    [CITATION Car14 \p 22 \l 1033 ] According to the World Bank, these companies have a

    corporate responsibility of being committed to working towards positive contribution to the

    economic development by working with the communities to improve the quality of life in a way

    that is good business and adheres to development plans[ CITATION The19 \l 1033 ].

    Since different countries have different and independent means of administering their

    laws, multinational companies have taken advantages of the situation in countries with loopholes

    that they can milk from. Multinational companies work with the governments and local

    authorities, and in many cases, the citizens and laborers in those countries are not considered. As

    such, no one is ensuring that; the private sector promotes human rights rather violating them,

    environmental and social criteria are incorporated in procurement decisions, corruption is

    avoided, and there is transparency in business practices and, core labor standards are adhered

    to[CITATION Cle13 \p 2 \l 1033 ].

    To address the above issues, the international community has stepped up to bring

    awareness about the infringement of rights and poor working standards. The European Union has

    also put pressure on member countries to sign legally binding agreements that will ensure that

    such companies do not take extreme advantage of the situation in developing countries. Labor

    unions, large companies, and governments are also pressuring multinational companies to adhere
    EHTICAL PROBLEM 3

    to certain standards because of the rampant cases exploitation of labor in supply chains, abuse of

    human right and environmental pollution[CITATION Uni14 \p 1 \l 1033 ].

    The aim of the international community and other related bodies is to increase the sense of

    responsibility of the multinational companies towards their offshore properties and offshore

    suppliers regarding the wellbeing of the communities and laborers in the developing nations. At

    the moment, the international community is already feeling that these companies are already

    having it too easy by bearing little or no responsibility. While this is true to some extent, the

    main reason such companies invested in developing countries such as Bangladesh is to exploit

    cheap labor, resources, and less strict government policies. While their business practices may be

    considered unethical, it is because of such practices that more companies are applying methods

    similar to that of GAP[CITATION Riv14 \p 33 \l 1033 ].

    2. Should GAP sign the legally-binding Accord?

    By signing the legally binding accord, many multinational companies will have to bear the

    responsibility of the safety of employees and communities in their offshore properties as well as

    their offshore properties. This means that multinational companies have to bear the cost of

    implementing safety standards and improving the living and working conditions of their labor

    market. The legally-binding accord presented to GAP is independent and aimed at improving the

    safety of all garment factories in Bangladesh. The agreement was designed by labor unions in

    Bangladesh as well as the international community and has already been signed by more than 50

    international brands and retailers agreeing to invest in making factories safer[CITATION

    Cle13 \p 3 \l 1033 ].
    EHTICAL PROBLEM 4

    This particular accord is a unique one in terms of its legal status. In comparison to other

    accords which are voluntary and have no legal implications, the Accord of Fire and Building

    Safety in Bangladesh allows for legal enforcement by suing signatory multinational companies

    who violate the accord. It is because of this aspect that many companies in Europe and the

    United States of America refuse to sign the legally binding Accord. The companies are afraid of

    lawsuits; meaning that they are not ready or willing to implement changes that might cost them a

    lot of money and time[CITATION Cle13 \p 6 \l 1033 ].

    3. Should Multinational firms continue to do business in countries like Bangladesh, where

    labor conditions are poor, and corruption is a problem?

    Multinational companies like GAP should not stop outsourcing in Bangladesh. This is

    because while there are problems in Bangladesh, the solution is not to escape but to work to

    improve the situation[ CITATION GAP19 \l 1033 ]. Companies outsourcing in developing

    countries with conditions similar to Bangladesh have done so because of the opportunities they

    have spotted in those countries. While most of the responsibility falls in the government and the

    authorities in the affected countries, GAP and other companies can do away with many of the

    issues by simply adhering to ethical business practices and avoid promoting corruption.

    According to Bangladeshi sources, while many locals are suffering because of poor working

    conditions and dangerous practices, they are in such a situation because some of the authorities

    in Bangladesh benefit in some way from the exploitation of their citizens; citizens who have no

    option to go the working sites in order to meet their daily needs[ CITATION Uni14 \l 1033 ].
    EHTICAL PROBLEM 5

    References
    Carroll, A. B., 2014. Business and Society: Ethics, Sustainability, and Stake Holder
    Management. 9 ed. Boston: Cengage Learning.
    Clean Clothes Campaign, 2013. Frequently Asked Questions (FAQ) about the Bangladesh Safety
    Accord. [Online]
    Available at: https://cleanclothes.org/issues/faq-safety/#5---should-companies-stop-sourcing-
    from-bangladesh
    [Accessed 30 May 2019].
    GAP, 2019. Our commitment to Bangladesh. [Online]
    Available at: https://www.gapinc.com/content/gapinc/html/html
    [Accessed 30 May 2019].
    Rivoli, P., 2014. The Travels of A t-Shirt in the Global Economy. 2 ed. New Jersey: John Wiley
    and Sons.
    The World Bank, 2019. Corporate Responsibility. [Online]
    Available at: www.worldbank.org/en/about/what-we-do/crinfo
    [Accessed 30 May 2019].
    United States Congress, 2014. Labor Issues in Bangladesh. 1 ed. Washington D.C: U.S
    Government Printing Office.

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