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Can Global Brands Create Just Supply Chains?

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Added on  2019-09-23

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This report critically analyzes the self-regulation methods adopted by global brands to ensure fair compensation, healthy and safe working conditions and rights of association. It also suggests a remedial path to ensure fair compensation and better labour standards in the developing countries.
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Can Global Brands Create Just Supply Chains?_1
CAN GLOBAL BRANDS CREATE JUST SUPPLY CHAINS?2QUESTION - CAN GLOBAL BRANDS CREATE JUST SUPPLY CHAINS?Ans: Global brands are constantly competing with each other to achieve cost minimization inorder to achieve their targeted profit margins and to maintain market share. Over the yearsthey have identified supply chain and operations as the potential source of cost optimizationand for that they have outsourced manufacturing operations to emerging markets which aremostly low-wage countries. Although it has revolution the way things are produced andtransported from one manufacturing hub to the entire world which is generally attributed asone of the fruits of globalization but there are serious qualms regarding the workingconditions, wage level and the general amenities provided to the workers. Previously theglobal brands tried to shrug of the responsibility from their shoulders as they were notdirectly responsible for such deplorable environmental conditions for workers in a foreigncountry but the globalization that had made it possible to tap into cheap labour, that sameglobalization has also made it possible for potential customers to know that shopping at Nike,Walmart or similar other brands leads to human exploitation at some other part of the world.The incidents with Nike and the collapse of building at Rana Plaza in Bangladesh hasseverely aggravated these issues with customers rejecting brands with such tainted supplychain operations. These labour issues had been historically regulated by governments orunions. . The labour regulations have evolved over the years with most of the 20th centuryentrusting the job of these regulations to national authorities which included labourcommissions, unions, laws and company policies. Globally these issues were regulated byInternational Labour Organizations (ILO). However as business models evolved and with theadvent of globalization manufacturing processes shifted from developed economies to poorerones because of low wages, this framework of regulation became difficult to implement.Then came the participation of NGOs towards the beginning of 90s wherein they madedemonstrations about the exploitation of global brands and urged consumers to buy suchproducts which breeds discrimination and inhuman working conditions in the developingworld. This paved the path for self-regulation among a lot of industries who wanted tocounter this onslaught of NGO protests. These industries resorted to self-regulation to combatthe menace of exploiting human necessities in the developing world. This report makes acritical analysis of these self-regulations and whether they have proved to be successful inimproving working conditions at the required places (Busse, 2004). Although several efforts have been made towards improved labour standards but thesituation in majority of the manufacturing hubs is abysmal with hazardous working condition,
Can Global Brands Create Just Supply Chains?_2

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