Question 6: The collapse of an eight-story garment factory in Rana Plaza on the

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Question 6: The collapse of an eight-story garment factory in Rana Plaza on the outskirts of Dhaka on April 24th 2013 killed at least 1000 people and injured many more. It was probably the worst industrial accident in South Asia since the Bhopal disaster in 1984, and the worst ever in the garment industry. Local police and an industry association had warned that the building was unsafe. The owners reportedly responded by threatening to fire people who did not carry on working as usual. Much of the blame lies with Bangladeshi governments of all stripes, which have made only rudimentary attempts to enforce the national building code, especially against politically well-connected landlords. With luck, the laws will now be applied, but nobody expects much. The spotlight is therefore on the multinational companies whose orders from local factory owners have led to the rapid recent growth of the garment industry in Bangladesh, the world's second-largest exporter of clothing after China. Familiar brands, such as GAP, CAREEFOUR, WALMART etc. now stand accused of exploiting poorly paid workers with a callous indifference to their safety. Two companies whose products were found in the rubble at Rana Plaza-Primark, a cheap British label, and Canada's Loblaw, whose brands include Joe Fresh- have rapidly promised compensation to victims and their families. Is a company morally obliged to follow the safety guidelines of its home country (where the company is based) when the standards in the host country (where the company operates) are lower? What is the difference between moral obligation and law? Which should take precedence? How do your thoughts align with your views about broad or narrow CSR? Would the workers, victims and families of the Savar Tragedy be justified in complaining about the lower standards and in return ask for compensation from the MNCs? Why or why not? Discuss

Explanation / Answer

As multinational companies operate in different countries, their level of involvement as well as effect of the operations in the specific country where they operate is huge. Following the guidelines as well as increasing the level of safety as per the standards of their home country is very essential for each and every multinational company for operation in different countries. This is there social responsibility to maintain and care about their employees even if they are not in their own host country. Usually for reducing the cost and increasing the prophets company ignore the security situations and the labours are forced to work in the less secure situations which is against the moral obligations as well as ethical level of the society.
These multinational companies usually outsource their clothing from countries like Bangladesh where the labour prizes as well as the overall prices for manufacturing and exporting is very less as compared to the home country. This Outsourcing directly made time dependent on the manufacturing factory which comes under the authority of Bangladesh's government. Implementation regarding the norms and guidelines for the safety is a job of Bangladesh's government to ensure and strictly implement the specific guidelines to the structure of the multinational manufacturing facilities in this kind of countries. Standards are defined by the local authorities as well as manufacturer.
Modern applications can be defined as a guideline for a code of norms which have to be followed by the companies for betterment of their employees on the ethical and moral basis of the society. Following this application can be optional for a company but it's always better to follow these obligations to maintain safety and security level of the organisation.
Security laws are directly the code and conducts which a company must have to follow. If these guidelines and norms are not followed legal actions are taken against the company. These laws are imposed by the government on the manufacturers as well as actress. Going against and not implementing the specific laws would definitely start a legal action against the company.
Following the moral obligation is very essential for a company to maintain the social image as well as betterment of the organisation. Ensuring safety greatly increases the overall compatibility of the employees towards the employees and increased level of implementation of dedication from employees side.
A broad view of corporate social responsibility is better for any organisation as it provides extensive support to the overall structure of the organisation to decide the specific studies as well as controlling the overall steps involved in management of a company. Unlike the narrow corporate social responsibility, broad social responsibility directly increases the overall effectiveness of the multiple strategies which are being implemented into the organisation for the security purposes as well as other factors. Broader social responsibility norms are also responsible for creating more ethical working environment and for providing a detailed explanation of each and every step being involved in creating such environment.
In this specific case workers, victims and families of the savar tragedy should ask for the compensation from the factory owners rather than asking it from the multinational companies. As the building was owned by local owner and the overall guidelines as well as a franchise was provided by multinational companies to the local owner. Social responsibility of the company goes to ensure the safety and security of the workplace where the workers are working for their company but maintaining these safety and security guidelines was the job of the factory owner.
Anyhow multinational companies should of the compensation to the family is as well as the worker of the specific factory due to the moral obligations and for increasing the overall ethics as well as social level of the multinational companies corporate social responsibility. As a part of their corporate social responsibility multinational companies should provide compensation to the family as well as the workers of the Savar tragedy

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