INTERNATIONAL BUSINESS AND TRADE

CASE PROBLEM NO. 1: IMPROVING THE LIVES OF BANGLADESHI GARMENTS FACTORY WORKERS

Bangladesh is one of the top exporters of garments with a 4.8% export market share. It is the most significant industry for the country as it accounts for around 75% of the total export revenue and employs nearly 4 million people. The biggest export destinations are the EU and the USA. New export markets are opening up in emerging economies of Russia, Brazil and China. Beside trade revenue and employment creation, this industry is very important for Bangladesh due to its contribution to social mobility, urbanization and above all to empowerment of women. Most of the workers are female and from rural areas where agriculture is the only source of employment. The remarkable improvement Bangladesh has achieved over the last 25 years in public health, primary education, and poverty alleviation are the fruits of the success of its garment industry. However, working conditions and pay in this industry have not met the expectations.

The garment industry value chain is very much buyer driven and suppliers have very limited bargaining power. Buyer-driven value chains are usually noticed in industries where production is labor intensive, non-specialized and requires low fixed cost. Entry barriers are high in designing, distribution, branding, advertising and market intelligence but low in the production stage. Hence, maximum bargaining power rests in the hands of large brand owners, distributors and retailers which endow them with price determining powers. Suppliers are simply required to match the offered prices. This price elasticity also offers limited switching costs for buyers.

Therefore, major buyers are able to significantly control their value chain without much involvement in the manufacturing process. Manufacturers are in constant pressure to gain production efficiency and achieve low cost advantages. In many cases, the health and safety issues are being overlooked to save cost. As a result several accidents took place with high number of causalities and subsequent labor unrest halts production efficiency. Many large importers also have cancelled purchase orders.

Responding to the working conditions and compliance issues the International Labor Organization, consumers, stakeholders and fare trade agencies are working together with the Bangladeshi government, garments manufacturers, industrial associations and trade unions to raise working conditions and pay. The minimum wage has seen a 77% increase and rigorous inspections are in place for safety and environmental regulation compliances. Also, works are in progress in areas of job security, more value adding, productivity increase through better training and distribution of control power across the value chain etc. Consumers also need to consider the effect of fast fashion on sustainability and well-being. Now, it is ever more pressing to think of ethical consumerism for a better world.

Questions:

1. How do industries value chains effect working conditions and determine wages in certain industries?

2. How could stake holders positively contribute in improving working conditions?

3. What might be the relationship of ethical consumption and sustainability?

CASE PROBLEM NO. 2: FALSIFYING ATTENDANCE

(Case prepared by Gov. Jose B. Fernandez Jr. Ethics Center, Ateneo de Manila University, Philippines)

Jason, a Junior System Administrator with the Management Information Systems Department, clocked in 4 minutes and 27 seconds late for work this morning. While he won't get fired for it, being late this once means that he will not receive the perfect attendance incentive which he needs to make ends meet, given his daughter's recent series of hospitalizations.

It's not that Jason didn't make an effort to be there on time. He actually arrived in the office five minutes early but was unable to clock in immediately because his direct superior, Raffy, asked him for an informal project progress report as soon as he walked in the door.

As a Junior System Administrator, Jason has access and the capability to edit the company's attendance records. He figures that since he was unable to punch in only because of his boss, it wouldn't hurt to edit the timestamp on his attendance for today.

Has Jason done anything wrong?

CASE PROBLEM NO. 3: RUMORS

(Case prepared by Gov. Jose B. Fernandez Jr. Ethics Center, Ateneo de Manila University, Philippines)

A few months ago, Arielle Cruz, Head of the Sales and Marketing Department of Mariposa Real Estate, formally announced to her staff that she will be leaving the company in order to be able to concentrate on her family. She emphasized that since she will be leaving, there is room for a promotion and that she would nominate their two top performers, Mary and Jane, to the HRMD. In an effort to give herself an upper hand, Mary closes deals with three big clients two days right after Arielle's announcement.

Two weeks after Arielle's announcement, stories about Mary's promiscuity begin to make their rounds and quickly become the mainstay headlines of office gossip. The most scandalous rumor is that Mary offers sexual services to her clients - both male and female - in order to close her sales. In the face of all these rumors, Mary continues to deliver excellent work.

The time has come to promote of the candidates. Based on performance, Mary is the better candidate but both could do the job. Should you consider the rumors? What should you do?

CASE PROBLEM NO. 4: MINING DATA

(Case prepared by Kirk O. Hanson, Markkula Center for Applied Ethics, Santa Clara University, USA)

Jack Hall, a software developer for a large online retailer, was growing increasingly uncomfortable with his company's practices. While some of his

company's executives had been publicly critical of the government collecting vast quantities of personal detail from email and online activity, the company was particularly aggressive about mining data from its own customers' online activity for marketing purposes.

Jack talked with one of his friends, who worked for a local university, about his concerns. The friend asked him two questions:

1. With whom does Jack have an ethical conflict - his company, or governmental policy, which permits what the company is doing?

2. Is having an ethical conflict with your employer a sign that Jack should leave the company?