Step 1: Identify Ethical Issues
In this scenario, a clothing company is determining whether or not it is right to source from an Asian manufacturing company. The following ethical issues are identified:
- The factory is shown to work the employees long hours, with very low pay compared to America. However, the workers they talk to say they are grateful for the job. Is it fair to work employees so much for so little, even if they are satisfied by it?
- Threads with Style is dedicated to social responsibility as well as profitability. Should the company favor profitability (in hiring a cost-effective manufacturer) or social responsibility (in sourcing clothes from companies they can fully trust)?
- The factory employs child labor, but the manager seems to care about his employees, and that this age is the normal time in which citizens enter the workforce. Is it right to respect the cultural traditions of a business partner, even though one personally finds it distasteful?
I believe that the central ethical issue involved is the second one; Threads with Style is at an impasse in their mission statement, in which they must explore all of their options and determine whether they want to make more profit or source their products from somewhere they feel more comfortable. They have no reason to believe that the manager is telling them the truth about the safety of their workers, and even the working family’s satisfaction is not enough to necessarily place their trust in this company. Assuming that Ms. Perpercoss is dissatisfied about the underage workers, she would have to make a choice about whether or not to support this (through their patronage) in the name of profit.
Step 2: Research
The following are articles that provide insight into the ethical issues surrounding Threads with Styles’ ethical dilemma.
- “The Political Economy of Child Labor and Its Impacts on International Business.”
This article denotes that child labor is often inextricably linked to global business, whether directly or indirectly. Business are at the forefront of making clear, positive changes to the child labor industry by engaging in trade with less exploitative markets; by making these decisions, it becomes more feasible to obey child labor laws and improve their own conditions. “Any firm that confronts the issue of child labor must decide whether adopting one of the responses outlined above—or any other—will cost more than ignoring the issue” (Bachman 39).
2. “No Life for a Child: The Grim Reality of Nepal’s Child Laborers.”
This article showcases the equally poor conditions of child labor in Nepal, a neighboring country in Asia. “Though child labor is illegal in Nepal, an estimated 1.6 million children between the ages of five and 17 years are in the work force, according to the National Child Labor Report. About three-quarters of them are under the age of 14, and most are girls” (Bhandari, 2013). To that end, even if what the supervisor says is true about the legality of their child labor, the conditions it puts them in are far from ideal, and something Ms. Perpercoss is not comfortable with.
- “Do Consumers Care About Ethics? Willingness to Pay for Fair-Trade Coffee.”
This study measures the extent to which consumers would be willing to engage in ethical buying behavior, which can be an important factor in determining how to source one’s products. If people are not willing to pay the extra money to buy products from Threads with Style sourced in ethical environments, the company will go out of business. In this study about fair-trade coffee, “The willingness to pay for a fair-trade label on coffee of the respondents indicated that about 10% of the sample wanted to pay the current price premium of 27% in Belgium” (de Pelsmacker, Driesen and Rayp 381)
4. “Cambodia Garment Factory Conditions Continue to Worsen.”
This article cements the ever-growing problem of Asian garment factory conditions. According to the United Nations, there are “ lower compliance levels with key health and safety measures[in Cambodian factories] than seven years ago, suggesting efforts to improve the sector there aren’t totally effective” (O’Keeffe, 2013). While this may not necessarily be true or indicative of the Shrenisra factory, it does indicate a disturbing trend in Asian factory garment work that is not strictly acceptable, even by Asian working standards. To that end, it may not necessarily be prudent to assume that the poor conditions and low pay in the plant is tacitly accepted by everyone who works there.
5. “Central Asia: Child Labor Alive and Thriving.”
This article gets more into the mentality of people like the family Ms. Perpercoss met whose child works in the factory; many see it as a point of pride for their family. They work to put food on the table, and are willing to put up with the terrible conditions. The article also mentions many governments’ ambivalence to do anything about labor laws, due to the economic contributions they make through their effort: “Human rights activists say that cotton brings cash to the state coffers as well as to the pockets of the ruling elite in some countries” (Saidazimova, 2008).Step 3: Analysis
In this section, we will look at the options Ms. Perpercross has, the stakeholders, and how these options affect stakeholders. The stakeholders are Ms. Perpercross, Shrenisra, the Juversina family/other workers, and TWS/shareholders. The options are as follows:
- Source clothing from Shrenisra Child Labor
- Source clothing from an ethical company, and raise price points Ethical Source
- Convince Gariana to improve working conditions Improve
Step 4: Application of Principles
This section will apply ethical theories to the aforementioned options available in this scenario.
Non-consequential Theory: Libertarianism
In classic liberalism/libertarianism, limited government is the key to a successful society; individual liberty and choice is placed above everything else, and people should be allowed to pursue their self-interest. Free market capitalism is heavily linked to this principle, as it is thought that the concept of a free market would allow people to realize their destinies according to their will and resources (Friedman, 1962). To that end, the only moral imperative is to allow people to exercise their personal freedoms, and not be told what to do by an overarching authority figure.
Applying Libertarianism: The aforementioned options will be evaluated on the principle of Natural Rights (i.e. inalienable, mutually respected freedoms of the individual).
- Child Labor: This option respects the freedom of Shrenisra to conduct business as they see fit, the workers’ desire to work regardless of their conditions (as they seem content with them). This also exercises TWS and Ms. Perpercross’ personal freedom to select whatever option they like.
- Ethical Source: This option allows TWS and Perpercross to exercise their freedom of selecting options, but does not allow Shrenisra to benefit from their patronage due to that choice. Shrenisra and the workers are allowed to continue business as usual
- Improve: This option fails to respect Shrenisra’s freedom to conduct its business, and imposes a set of values upon them that they do not necessarily share. This violates the tenets of libertarianism.
Consequential Theory: Utilitarianism
One of Mills' primary arguments is the Greatest Happiness Principle, which states that “actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness. By happiness is intended pleasure, and the absence of pain; by unhappiness, pain, and the privation of pleasure” (Mill, 1998).To that end, Mill’s idea of justice depends on the ability to receive social benefits from an action; if an action leads to an overall reduction in crime, for instance, it becomes moral. In essence, Mill’s perspective is that the ends justify the means.
Applying Utilitarianism. In order to apply Utilitarianism to this situation, one must determine which of the three options provides the ‘greatest happiness’ to all involved.
- Child Labor: Brings happiness to Shrenisra, profitability to TWS, but sacrifices social responsibility, Ms. Perpercross’ conscience, and working conditions for workers.
- Ethical Source: Brings happiness to Ms. Perpercross and TWS, but sacrifices work for workers, profitability for TWS and Shrenisra. Potentially encourages Shrenisra to improve conditions in order to successfully attract buyers.
- Improve: Brings happiness to Ms. Perpercross, TWS, and workers, but sacrifices profitability for Shrenisra, as well as the possibility of the deal falling through altogether.
Step 5: Recommending a Solution
Ms. Perpercross and TWS must decide between their own moral imperative to not contribute to the child-labor practices that pervade modern business, but must also make their clothes cost-effective in order to maintain profitability. Following libertarianism, either going with or going without Shrenisra respects everyone’s ability to exercise personal freedoms. In the case of utilitarianism, bringing the greatest happiness to everyone involved is the primary goal. Looking over both theories, it is clear that Ms. Perpercross’ choice must be to choose another ethical source. Regardless of the cultural relativism inherent to the situation, Perpercross would not feel comfortable supporting child labor practices, thus sacrificing TWS’s integrity. By not choosing Shrenisra, they do not partake in this practice, and have the potential to still get the contract through ethical business practices. Step 6: Evaluation
There are several counterarguments to this choice. First, there is no reason to believe that the workers feel they are being treated unfairly; the Juversina family seems happy to have their family working at the factory, and Mr. Gariana seems to care about his workers. However, this does not necessarily mean that Ms. Perpercross must act against her instincts or conscience, or that the family represents the attitudes of everyone working there. Secondly, not using this cheaper source may cost TWS that major retailer contract; however, their commitment to social responsibility comes with a price, and that may mean not getting the profitability they need. Step 7: Reflection
The issue of child labor is something that I have always been troubled by; the differences in cultures may mean that I am more upset about it than those involved (as they may see it as a normal part of life). I understand the difficulty that businesses must go through in sourcing ethical materials; the nature of globalization and industrialization means that a lot of companies outsource their goods to other countries, where standards of living are much lower – this also potentially sacrifices ethical integrity for these businesses. Examining the reasoning behind these decisions gives me greater insight into the stakes of all parties involved.
Works Cited
Bachman, S.L. “The Political Economy of Child Labor and Its Impacts on International
Business.” Business Economics (July 2000): 30.
Bhandari, Bibek. “No Life for a Child: The Grim Reality of Nepal’s Child Laborers.” CNN Aug
15, 2013. < http://www.cnn.com/2013/08/14/world/asia/nepal-child-labor/>.
De Pelsmacker, Patrick, Driesen, Liesbeth and Glenn Rayp. “Do Consumers Care About Ethics?
Willingness to Pay for Fair-Trade Coffee.” Journal of Consumer Affairs 39.2 (2005): 363.
Friedman, Milton. Capitalism and Freedom. Chicago: University of Chicago Press, 1962. Print.
Mill, J. S. Utilitarianism. Oxford: Oxford University Press, 1998.
O’Keeffe, Kate. “Cambodia Garment Factory Conditions Continue to Worsen.” The Wall Street
Saidazimova, Gulnoza. “Central Asia: Child Labor Alive and Thriving.” Radio Free Europe
Radio Liberty, October 27, 2013. < http://www.rferl.org/content/article/1144612.html>.
