Case Study On Shiraishi Garments

The article talks of a businessman called Takashi Shiraishi who opened a Garment Business in Japan but later outsourced to China. His main aim was to increase his profit margins. He started his business after discovering a business niche in the Japanese market in cloth and fashion. He observed that Japanese were willing to append a lot on fashionable and stylish clothing than living in modest apartments. He ventured into business and prioritized customer taste, preference and lifestyle. This personal attention to customers made him successful.
His customer-oriented strategies combined with supplier relationship management were a bonus to his business. In 1990, Japan economy got bad and his business was affected. This was reflected in shrinking sales and small profit margins. The attractive consumer base and the availability of cheap labor in China attracted him and many other businesses. However, Takashi’s research in China showed that China was not the best place for his business to outsource. Nevertheless, from a business point of view, China was better than the rest due to its factories, political climate, fabric availability, human resource and infrastructure.
Salary rates in coastal China were different from the country sides. However, migration to the country side kept the wages low. This attracted direct foreign investment. The workers were paid cheap and worked in poor conditions. These were the condition Takashi had to face which would lead to bad company reputation. Other risks included poor produce quality, low productivity and high employee turnover.
Auditing could not solve social problems related to labor, community and environment, though it was the only tool used by the government. Post-audit follow up was poor and resulted to few improvements. It drove dishonest, lack of openness and fraud. Workers disliked unpaid overtime but were willing to work under low limits as set by the government to increase their pay.
Takashi’s problem is on the need to focus on continued improvement and capacity building. This is all entangled in the need to create a better working environment for his workers. He does not conquer with the working condition provided by employees and neither does the unpaid overtime please him. He wishes to provide an environment where workers will learn skills and be paid appropriately without exploitation. This was based on the rapidly changing business environment and the fast means of communication promoted by the use of mobile phones. He needed to solve these workers problems or else, leave China.
Takashi should implement policies that address workers welfare. First, he should look at the current situation in terms of employees’ satisfaction. By analyzing the problems faced by employees by actively engaging them in developing policies that will address their worries, he will win their trust and this might yield good returns in the long run.
He should put in place regulations that oppose child labor or unpaid overtime. This will make the employees more productive as they are assured that the company management is doing its best for their interest without oppression and/ or exploitation.
The company can also ensure it is transparent in auditing and also ensure that it implement the post-audit follow-up in order to create a better environment. However, the company must be aware that the implementation of these recommendations will be an extra cost that will decrease its profit in the short run. Nevertheless, full implementation of the recommendation will be a profitable project in the long-run.