Disney Case

Case 4 - DISNEY: Should Retailers Cut and Run from Bangladesh?

Thursday, May 2, 2013

Western apparel companies have been under tremendous public scrutiny after the fallout of last week’s factory fire in Bangladesh that killed 400 workers. Retailers are torn between staying and improving conditions, and leaving Bangladesh entirely. Bangladesh is the second largest apparel exporter with $18 billion, 3.6 million garment workers, and some of the lowest wages in the world. Wal-Mart, GAP, and Children’s Place met in private recently to discuss improving worker conditions, while Benetton has repeatedly had to revise its explanation of relations to the factory. After a factory fire 6 months ago, Disney announced a one-year phase-out of all manufacturing in Bangladesh ending in March 2014. While retailers determine if they will follow Disney’s example, labor groups are urging them to stay and improve conditions as opposed to cutting their losses and running. Do these retailers have an obligation to improve working conditions in Bangladesh once they have used subcontractors there? Is it better to walk away and source clothes in another low-cost location? Is the problem instead that U.S. companies expect their clothes to be made at unrealistically low prices?

1. DETERMINING THE FACTS

* A factory fire in Bangladesh killed 400 workers.

* After the fire, a tremendous public scrutiny was held.

* Bangladesh is the second largest apparel exporter with $18 billion, 3.6 million garment workers, and some of the lowest wages in the world.

* Wal-Mart, GAP, and Children’s Place met in private recently to discuss improving worker conditions, while Benetton has repeatedly had to revise its explanation of relations to the factory.

* After a factory fire 6 months ago, Disney announced a one-year phase-out of all manufacturing in Bangladesh ending in March 2014.

2. IDENTIFY ETHICAL ISSUES INVOLVED.

* Bangladesh is one of the lowest wages in the world, therefore...