Case Study of 'Leaving Bangladesh' by Sinthi
Executive summary
Multinational companies like Walmart,Mango,etc are now in dilemma about terminating their contracts with Bangladeshi manufacturing industries after the building collapse in Savar. The eight-storeyed building Rana Plaza was one of hundreds of buildings in the crowded streets of Savar, an industrial suburb of Bangladesh's capital and the center of the country's $20 billion garment industry. If Bangladesh remains one of the world's poorest nations, it is no longer a complete economic cripple. Instead, it turned its poverty to its advantage, heralding workers who make some of the world's lowest wages and attracting some of the world's leading brands.But this same economic miracle has plunged Bangladesh into a vicious descending spiral of keeping down costs, as major retailers compete for customers who want ever cheaper clothes. On one hand,the multinational companies do not want to leave Bangladesh because of cheap labour cost.On the other hand,they are feeling pressure from consumers to leave Bangladesh if the working condition do not improve. In this case study,we have analyzed the problems that multinational companies are facing and offering solutions for the major and minor problems they are facing.
Statement of the Problem
Major Problem for Multinational companies doing business in Bangladesh:
Further tarnishing of their reputation Frequency of accidents of labours increasing at an alariming rate Pressure from angry consumers to move out from Bangladesh It takes months to build good relationship with new factories in other countries Cheapest labor wage in Bangladesh Their profit will decrease as cost will increase
Minor Problem for Multinational companies doing business in Bangladesh:
If they stay, they might have to spend large amount of money for improving working condition in Bangladesh If they leave, they will face criticism for abandoning a developing country There are shortage of skilful workers in Bangladesh
Multinational companies like Walmart,Mango,etc are now in dilemma about terminating their contracts with Bangladeshi manufacturing industries after the building collapse in Savar. The eight-storeyed building Rana Plaza was one of hundreds of buildings in the crowded streets of Savar, an industrial suburb of Bangladesh's capital and the center of the country's $20 billion garment industry. If Bangladesh remains one of the world's poorest nations, it is no longer a complete economic cripple. Instead, it turned its poverty to its advantage, heralding workers who make some of the world's lowest wages and attracting some of the world's leading brands.But this same economic miracle has plunged Bangladesh into a vicious descending spiral of keeping down costs, as major retailers compete for customers who want ever cheaper clothes. On one hand,the multinational companies do not want to leave Bangladesh because of cheap labour cost.On the other hand,they are feeling pressure from consumers to leave Bangladesh if the working condition do not improve. In this case study,we have analyzed the problems that multinational companies are facing and offering solutions for the major and minor problems they are facing.
Statement of the Problem
Major Problem for Multinational companies doing business in Bangladesh:
Further tarnishing of their reputation Frequency of accidents of labours increasing at an alariming rate Pressure from angry consumers to move out from Bangladesh It takes months to build good relationship with new factories in other countries Cheapest labor wage in Bangladesh Their profit will decrease as cost will increase
Minor Problem for Multinational companies doing business in Bangladesh:
If they stay, they might have to spend large amount of money for improving working condition in Bangladesh If they leave, they will face criticism for abandoning a developing country There are shortage of skilful workers in Bangladesh