Comm101 Principles of Responsible Business
Spring 2017 In-Class Essay
Topic: Globalisation and Responsible Business Behaviour.
In market dominated economies such as Australia, most firms seek to maximise profit. One way to do so is to raise price, but if a firm does so unilaterally, they are likely to lose market share to other firms who do not raise their price. Such competition benefits consumers.
But another way to increase profits is to reduce costs.
Many firms seeking to reduce costs have offshored their production to contractors in poor countries with lower labour and other input costs and fewer government regulations over working conditions. This is said to benefit people in the poorer country (more jobs) and to benefit consumers in Australia (lower prices) although some Australian workers lose their jobs.
Another approach to cost cutting is for domestic firms to lobby for lower award and/or minimum wages, a strategy that has recently been successful in lowering wages for some weekend workers in the hospitality industry. Domestic firms may also use ‘vulnerable’ workers who are more likely to accept lower wages.
These two approaches to reducing costs are manifestations of the process of globalisation. This essay asks you to investigate two examples of such behaviour and decide whether, in each case, the business behaviour was morally acceptable.
This assessment is closed book, that is, you will not be permitted to have anything on your desk other than the question paper and an 8 page booklet. So you need to be fully prepared to answer the essay questions when you attend your relevant tutorial class in week 10.
Your essay should be no longer than approximately 900 words in length.
As this is a closed book assessment, a reference list is not required, nor is a ‘proper’ essay structure. So you will not lose marks if you simply answer the questions in the order they have been asked.
This assessment carries a maximum of 50 marks and shall contribute up to 22% towards your final mark in this subject.
Starting References.
1. Shaw, W. et al. (2016), Chapters 3 and 6, with associated lecture notes and tutorial exercises.
2. https://www.dol.gov/newsroom/releases/ilab/ilab20150753
3. http://www.smh.com.au/interactive/2015/7-eleven-revealed/
4. https://www.theguardian.com/commentisfree/2017/jul/27/wage-will-continue-until-politicians-stopit-they-can-but-will-they
5. http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Education_and_Employment/t emporary_work_visa/Report
Part 1: Morally acceptable offshoring?
The Rana Plaza in Bangladesh was a commercial building used by local contractors producing garments for multinational clothing brands. These multinational firms offshore much of their production to contractors in poorer countries to reduce costs. The building collapsed on 23 April 2013, eventually claiming over 1100 lives. As a result, many western governments and multinationals promised they would ‘do better’ in future. One example is the Joint Statement on the Anniversary of the Rana Plaza Building Collapse in Bangladesh, by various US and European government, and other, officials (see starting reference 2).
Question 1.1: Do some research and then answer the following questions. (100 words, 5 marks max)
• What were two well-known clothing brands that were manufactured in the Rana Plaza?
• What were typical hours, conditions of work, and weekly wages for garment workers in the Rana Plaza?
Question 1.2: Summarise the commitments made in the Joint Statement. What do these commitments imply about the working conditions (not already discussed in question 1.1 above) for Bangladesh garment workers
prior to the building collapse? (200 words, 10 marks max)
Part 2: Morally acceptable onshoring?
The convenience franchise 7-Eleven has recently been criticised for abusing its workers, mostly international students (see starting references 3 and 4). These abuses were investigated by a Senate Committee of Federal Parliament (see starting reference 5).
Question 2.1: Describe how 7-Eleven abused their international student workers. (100 words, 5 marks max)
Question 2.2: Describe the life circumstances of ‘vulnerable’ international student workers that facilitated such
abuse. (200 words, 10 marks max)
Question 3: It is clear that the 7-Eleven franchisees deliberately abused their workers. It could also be argued that the multi-national clothing firms knew, or ought to have known, about the abusive conditions imposed by their contractors on Bangladesh workers in the Rana Plaza. Discuss the morality of such cost cutting behaviour
from a Kantian perspective. (350 words, 20 marks max)