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28-01-2018 Sattar, 2017). This can also be related to

28-01-2018                                                                                                                    
Group 4

Tamara Cabenda, 11225335                                                            Academic year 2017-2018

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Principles of Economics and
Business                                                                    Semester 1

EEN TITEL

Introduction

In 2013 the Rana Plaza, a building housing
several clothing factories making clothes to export to Europe and America,
collapsed (Manik & Yardley, 2017). About 134 people died and more than
1,000 of the 2,500 workers were injured. This happened only five months after a
terrible fire at a similar factory, which led multinational brands to promise
to improve safety in the country’s garment industry. The article also confirms
that an investigation found that there were building codes violated as well as
a structural fault in the building.
            Nowadays
most people know about the bad working conditions in for example Bangladesh,
but consumers still purchase clothes made by child labour and workers barely
earning a penny. There are labour activists in Bangladesh but the government takes
these people into custody as soon as they start talking (Abrams & Sattar,
2017). The labour rights groups state in the article that they believe the
government is making sure workers don’t talk by detaining harmless people.
After the incident of the Rana Plaza, business owners formed two alliances who
are devoted to make sure workers get better working conditions which are: the
accord, guided by H&M, and the Alliance for Bangladesh Worker Safety,
including Gap and Walmart (Abrams & Sattar, 2017).
            This
can also be related to the prison labour that is happening. Here inmates are
paid less than a dollar an hour to produce any sort of product from mattresses
to road signs (The Economist, 2017). The program pays more than the average
kitchen work in prisons so the waiting list is long. Critics have pointed out
the moral hazard that is generated when profit comes from punishment, but what
most people don’t know is that prison labour has been going on since 1979 (The
Economist, 2017).
            These
are problems that are only growing and need addressing. The average person
doesn’t care who made their sweater, but in the meantime these people continue
their work in bad conditions with the risk of an incident like the Rana Plaza
repeating itself. The question to what extent the use of child labour in
Bangladesh could be morally legitimate arises. In this paper a literature
review will be conducted, researching if these markets are morally legitimate.
The literature used in this paper consisted of academic sources on factors
influencing working conditions and morally responsible behaviour.
            The
next section of the paper will be the descriptive and analytic part, discussing
the factors that have an influence on working conditions and why customers are
comfortable with the fact that products are made under poor conditions. Following,
what morally responsible behaviour entails and how we agree on what morally
acceptable behaviour is. After that, in the opinion section, first the
connection between poverty and the likelihood that a child will work will be
discussed and after that arguments for and against the use of child labour in
for profit organizations will be made as well as a recommendation to whether or
not this kind of employment should be allowed. Lastly, in the research section,
a hypothesis will be stated for possible further research.

Descriptive/analytic

First it is important to discuss
the factors that have an influence on peoples working conditions. The general
belief is that multinational companies themselves are accountable for the working
circumstances in their supply chains, even concerning the suppliers that are lawfully
independent (Dänzer, 2011). There is very few international law that controls
the actions of global firms in developing nations, and when laws are present they
are not binding. Dänzer explores whether multinational enterprises are morally
responsible for the working conditions in their supply chains. She describes
that there are two main concepts of responsibility which are outcome
responsibility, meaning the responsibility that companies carry for the
outcomes of their former actions, and remedial responsibility, which is the responsibility
of companies to put certain bad situations right.
            Outcome
responsibility is present under the first condition that the company has in
some way contributed to the outcome. This is the case because through the
multinational enterprises purchasing policy the company gives strong incentives
for either wanting good or bad working conditions in their factories (Dänzer,
2011). For example, when the purchasing policy is to produce as cost saving as
possible, that won’t encourage high salaries for workers or good working
conditions. Other conditions are that the company has power over its actions,
there is a connection between the cause and the effect, and that there were
alternative actions for the firm to take (Dänzer, 2011). According to Dänzer, all
of these requirements are fulfilled, meaning that there is indeed outcome
responsibility. Dänzer states that remedial responsibility is relevant when
there is a situation that is in need of remedy, in this case the bad conditions
in the supply chains. To conclude, outcome and remedial responsibility are
present which means that companies are morally responsible for the working
conditions in their supply chains. This makes them the factor that has an
influence on these working conditions and the factor that should work to improve
them.
            Despite
the fact that global companies themselves may be responsible for the bad
working conditions that their products are made in, the consumers are the reason
that the companies exists, meaning that they still buy the products. Therefore,
why are customers comfortable with the fact that the products they buy are made
under poor conditions? In 2001, Carrigan and Attalla did research on this
matter. They expressed that what seems to be happening is that although
consumers express preparedness to make ethical decisions, in reality, communal
responsibility is not the most powerful criteria in their decision making.
Carrigan and Attalla asked their respondents to name factors that influenced
their purchasing decisions, the result was that price, value, brand image and
fashion trends are the deciding factors. The respondents in their research repeatedly
admitted to knowing companies were not acting ethically but felt they couldn’t
do anything about it or were only willing to change their purchasing decision
when this wouldn’t cause them any trouble. Carrigan and Attalla found the standpoint
to be that a business like Nike, which has a bad ethical background, is not viewed
as unethical because they deliver jobs and profits which are good for the
economy. It became evident that respondents only cared about particular social
issues. For example, animal suffering mattered much more to them than the
rainforest or working conditions (Carrigan & Attalla, 2001). What the
respondents were keen to point out is that if they had more money, they would boycott
unethical companies, change their purchasing decisions and be willing to pay
more for an ethically produced product (Carrigan & Attalla, 2001).
            It
can be concluded that consumers try to ignore the ethical problem when they
can, but besides consumers, other stakeholders that can be influenced are
shareholders, governments, employees and the wider community, which are more
actively concerned with ethical behaviour (Carrigan & Attalla, 2001). However,
what entails morally responsible behaviour? In the article of Ardichvili,
Mitchell, and Jondle (2009) an experiment is conducted to find features of
ethical organizational cultures that entail what the majority of people see as
ethical behaviour. These characteristics are: Mission- and values- driven,
which entails the transparency of mission and values, shown in ethical principles
and conduct,; stakeholders balance, which entails the equality of all
stakeholders in the decision-making,; leadership effectiveness, meaning that
the ethical culture starts at the top and is carried on by example,; process
integrity, which is the commitment to quality and fairness in the firms’ people,
processes, and products,; and lastly, long-term perspective, means that the mission
should be put before profit and long-term goals before short-term goals
(Ardichvili, Mitchell, & Jondle, 2009). These characteristics suggest that
people do actually care about ethical guidelines, fairness, and more.
            However,
that they care about this does not mean that everyone has the same opinion
about ethical behaviour and how this should be implemented. Here, the issue
arises to how we agree on what is morally acceptable. To solve this problem
there are laws and regulations made. Although not everyone agrees on the same in
regard to what is morally acceptable, some ground rules are stated with which
the majority agrees. For the matter of what is morally acceptable, the majority
speaks. Often it is said that whether or not people behave ethical is dependent
on how their supervisors or ‘bosses’ behave.
            In
2013, Resick, Hargis, Shao, en Dust examined whether or not ethical leadership
is related to negative moral equity judgments of workplace misbehaviour and
related to positive moral equity judgments about organizational citizenship
behaviour. From their experiment they find that employees working for leaders
who are more ethical in their leadership are more negative towards deviance in
the workplace and more positive towards organizational citizenship and find
this more morally suitable. Concluding, this means that when wanting to
influence ethical behaviour, one should do this starting at the leaders of a
company. The leaders will then positively influence the behaviour of their
employees and as a result people can start to develop a more united opinion on
what ethical behaviour entails.

Opinion

In order to make a decision on
whether or not child labour should be allowed, you have to think about the
causes of the child labour. If it would be prohibited, what would the
consequences be for the families that have working children. Amin, Quayes, and
Rives (2004) did research on poverty, years of education, household size and
more as determinants of child labour in Bangladesh. First, they found a
cultural factor for child labour which is that the parents dread their children
will become idle when not working. What they found was that with an increase in
the household size, the chance of the children working increases, but having a
male head of the house decreases the probability of a child working. Higher
educated parents are less likely to send their children to work, this confirms
that poorer families cannot afford not to send their children to work. What
this means is that when child labour is prohibited, poverty will increase,
mainly because if the children aren’t allowed to work this will result in an
even lower household income.
            A
common argument against child labour would be that there is the assumption that
child labour may cause severe illness. Alam, Amin, and Rives (2012) used survey
data to examine whether or not illness or injuries associated to occupational
hazard are determined by whether or not a child works in the export industry in
Bangladesh. They find that only 5% of more than 200 million working children
worldwide, up until the age of 14, work in export industries. And as for that
five percent, they find that working in the export sector does not make a child
more likely to become ill or injured. Alam, Amin, and Rives (2012) state that
as opposed to prohibiting child labour, the countries that import these goods
should support these developing nations and ensure that there is workplace
safety in child labour industries.
            But
what would happen when you ask the employees of factories with bad working
conditions, also called sweatshops, what they want in regard to workplace
safety. In a recent article from Powell and Zwolinski (2012) it is expressed
that when employees were asked if they would give some of their wage up to improve
working conditions, they said they were not willing to do this. This shows that
the wages in these factories are so low that even the employees themselves don’t
want to complain about the conditions. There is not yet a system founded that makes
it possible to get higher wages and better working conditions without hurting
the workers (Powell & Zwolinski, 2012).
            An
argument for the use of child labour would be that prohibiting it would not
improve the economic situation in the countries and families will become poorer
meaning that these children have less chance to a good future. It would probably
not even change the behaviour of consumers. In an article exploring whether the
ethical concern of consumers influences the code of conduct of a company to
meet this matter, namely Gap, they find that even though consumers recognize
the problem of ethical matters, they care more about factors like price and
quality ((Iwanow, McEachern, & Jeffrey, 2005). This means that companies won’t
change where they manufacture when the consumers will buy their products either
way. As a result, companies will produce with the lowest production costs
possible, which is off course in development countries and sometimes with child
labour. Concluding, if we can’t change consumers purchase decision, there is no
use in banning child labour.
            It
is also not just the responsibility of import companies to stop child labour. The
developing countries themselves need to take action, which is not happening enough.
In 2014, Bolivia approved a law that allowed children from the age of ten to
undertake independent work – excluding wage (Dillon, 2015). Dillon states that
the world trade organization is the step towards trading in the global economy.
For a country to gain entry, they must prove they are committed to gain free
trade. There are barely any efforts that make sure a country has to deal with
human rights issues, such as child labour, before they can enter in the world trade
organization (Dillon, 2015). If these rules were present, this could mean the
start of a decrease in child labour.
            One
argument against child labour that does still remain a problem is workplace safety.
There should be more regulations on building structures and check ups on the
safety of workers. A recommendation on allowing child labour would be that
nothing much can be done until the countries and enterprises start to take action.
The children won’t be any better off without the work and as stated earlier, there
was no prove found that working in the export sector causes illness or injury. It
is possible that the children would be better off without the child labour but
then there would have to be some kind of development aid to help the economy of
these countries.

Research

A provisional answer to the extent
to which the use of child labour in Bangladesh could be morally legitimate would
be that, as long as there is no danger involved, no consequences for the lives
of the children that could be prevented were they not working, or any enforcement
for children to work, it would be morally legitimate. Also, when there are
still many consumers that buy the products made by child labour, there can not
be said that it is not morally legitimate, because everyone is involved. Limitations
of this research would be external, this paper is mainly about Bangladesh but
this is not the only place in the world where child labour occurs. Also more
information on the long term consequences on the lives of these children would
be useful for further research. An interesting hypothesis would be; the future
of working children would have more potential when prohibiting child labour within
export and import countries combined with development aid. This hypothesis
would examine whether it can be justified that children work at a young age
instead of being in school. Expected is that when these children are able to be
at their full potential they would be better off without child labour, but before
that happens the economy needs to get a chance to develop more.

Conclusion

The goal of the research was to examine
to what extent the use of child labour in Bangladesh could be morally legitimate.
The problems that were addressed were about ethical behaviour in general and in
connection with child labour and consumer behaviour in relation to the ethical
or unethical behaviour of global companies. The result of this research is
mainly that consumers are indifferent about whether companies behave ethical or
not, but ethical leadership is, however, mimicked by employees. It is unlikely
that global companies will undertake action when they are still profiting from
their production with child labour. Also there is no relation found between
severe illness or injury and children working in the export industry. To answer
the central question on the moral legitimacy of child labour in Bangladesh, it can
not be seen as overall morally legitimate, but despite that it is generally
accepted since no major action has been undertaken.
           

 

 

 

 

 

 

 

 

Reference
list

Abrams, R., & Sattar, M. (2017, January 22).
Protests in Bangladesh shake a global workshop for apparel. The New York
Times, pp. 1-5. Retrieved from https://www.nytimes.com/2017/01/22/business/bangladesh-protest-apparel-clothing.html

Alam, I. M., Amin, S., & Rives, J. M. (2012).
Occupational safety among working children in the export sector of Bangladesh.
International Economic Journal, 27(4), 683-695.
doi:10.1080/10168737.2012.733720

Amin,
S., Quayes, M. S., & Rives, J. M. (2004). Poverty and other determinants of
child labor in Bangladesh. Southern Economic Journal, 70(4), 876-892. Retrieved
from http://www.jstor.org/stable/4135277?seq=1#page_scan_tab_contents

Ardichvili, A., Mitchell, J. A., & Jondle, D.
(2009). Characteristics of Ethical Business Cultures. Journal of Business
Ethics, 85(4), 445-451. Retrieved from
http://www.jstor.org/stable/40294807

Carrigan, M., & Attalla, A. (2001). The myth of
the ethical consumer – do ethics matter in purchase behaviour? Journal of
Consumer Marketing, 18(7), 560-578. Retrieved from
https://doi.org/10.1108/07363760110410263

Dänzer, S. (2011). Are multinational companies
responsible for working conditions in their supply chains? From intuition to
argument. Analyse und Kritik, 33(1), 175-194. Retrieved from http://www.zora.uzh.ch/id/eprint/58586/

Dillon, S. (2015). Child labour and the global
economy: Abolition or acceptance? Nordic Journal of International Law, 84,
297-322. doi:10.1163/15718107-08402007

Iwanow,
H., McEachern, M. G., & Jeffrey, A. (2005). The influence of ethical
trading policies on consumer apparel purchase decisions: A focus on The Gap
Inc.. International Journal of Retail & Distribution Management, 33(5),
371-387. Retrieved from https://doi.org/10.1108/09590550510596740

Manik, J. A., & Yardley, J. (2017, April 24).
Building collapse in Bangladesh leaves scores dead. The New York Times,
pp. 1-4. Retrieved from http://www.nytimes.com/2013/04/25/world/asia/bangladesh-building-collapse.html

Powell,
B., & Zwolinski, M. (2012). The ethical and economic case against sweatshop
labor: A critical assessment. Journal of Business Ethics, 107(4), 449-472.
Retrieved from http://www.jstor.org/stable/41476263

Prison labour is a billion-dollar industry, with
uncertain returns for inmates. (2017, March 16). Retrieved from https://www.economist.com/news/united-states/21718897-idaho-prisoners-roast-potatoes-kentucky-they-sell-cattle-prison-labour

Resick,
C. J., Hargis, M. B., Shao, P., & Dust, S. B. (2013). Ethical leadership,
moral equity judgments, and discretionary workplace behavior. Human Relations,
66(7), 951-972. doi:10.1177/0018726713481633

 

 

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