H&M: Supply String and Outsourcing

Keywords: outsourcing labour, cheap labour bangladesh

A multinational organization is a term discussing a business that conducts business procedures out of countries other than the home country. As monetary globalization becomes a growing movement in modern society, it is not abnormal to visit a greater consistency of these kinds of corporations executing their business with a variety of countries. More specifically, over time, nations of the Global South have observed a dramatic increase in corporate appeal from the garment producing industry. It is no surprise then, that with cheap labor, access to recycleables and a promise of rapid development, countries in this region have seen a growth in the demand of foreign establishments vying to handle production here.

As a Hennes and Mauritz (H&M) staff of three years, I have come to be familiar with their international affairs in the Global South, particularly in Bangladesh. Bangladesh is the primary region in which H&M outsources the creation of their merchandise before shipping nearly all these goods to the Lady. It isn't uncommon for the company for taking many opportunities each year to educate and update their workers of their relationships with Bangladesh. Being presented with one-sided information pertaining to these interactions, I was made to assume that H&M's existence in this country is beneficial for the introduction of the country on a global scale. Specific things like training programs in the procedure of sewing machines with the warrant of work at H&M are features I thought as aiding the united states in monetary sustainability. However, after study on this issue of the effects of globalization and multinational organizations in growing countries, I recognize that we now have arguments claiming global outsourcing in the Global South is a hurdle to the opportunity of progress in these countries. Through critical evaluation of arguments encouraging and against H&M in Bangladesh, it is evident that the life of the company in a developing nation does impact the growth of the united states. Even though H&M may abide by the labor and environmental plans of Bangladesh, their existence in the country as a foreign transnational company hinders the probability of economic or politics expansion and negatively impacts the country's steps towards development.

Founded in 1947, Hennes and Mauritz (H&M), is a clothing company that started in Sweden. Today H&M operates out of 38 countries, backed with 87, 000 employees (H&M 2011: ). Alongside having stores throughout the world, H&M has special connections with certain countries where it outsources nearly all its' merchandise. Among the essential countries where H&M relies on for the outsourcing with their products is Bangladesh. "Bangladesh, considered being one of the 'Least Developed countries' (LDC), has been immensely influenced by globalization, specially the limitations in the garments industry during the last decades" (Uddin 2006: 7). Bangladesh achieved flexibility as an independent country in 1971, and after undergoing trade liberalizations in the 1990s, Bangladesh made the change from an agriculturally dominant overall economy compared to that of a market led one (Uddin 2006: 7). When multinational businesses such as H&M learn that a country is newly liberalized, it is common for them to step in and offer the country their business, along with reasons why their business will assure this country fast development. "For Bangladesh, the quotas acted as a guarantee for certain quantities of export sales, helping to establish market presence" (Uddin 2006: 7). The concern attached to these kind of export sales for Bangladesh, is the fact the business enterprise H&M is outsourcing is the standard among all the aspects that make up this company.

H&M sources their manual labor to Bangladesh to be able to keep new business issues in the mother country. "By sourcing non-core business activities an organization can give attention to its center business in an improved way" (Alim 2010: 30). By H&M outsourcing its production tasks to Bangladesh, Sweden is mailing its' 'no-brainer' business to a producing country. The business sector in Bangladesh is less likely to achieve development through H&M's outsourcing behaviors because these used projects give attention to manual labor. Being that the majority of its' market founded economy deals with manual labor, Bangladesh is deprived of dealing with new technology - which is typical for capitalist countries. Therefore development in Bangladesh cannot be attained, as the nature of the work pressure is not advancing.

"The introduction of American, Western european, Japanese and UNDER-DEVELOPED multinationals has created a new competitive environment, requiring the globalization or at least semi-globalization of corporate strategy" (Alim 2010: 24). H&M is among the world's leading multinational garment sellers, they assure their customers "fashion and quality at the best price" (H&M 2011: ). To be able to remain in a position of competitive gain, some would say organizations of this character have to keep up a certain reputation involving all the areas of business they perform. In society, methods of sustainable development are being favored as everyone is aware of certain on goings in the development of goods such as child labor, and the exploitation of human rights and environmental regulations. Companies of this characteristics than need to take certain precautions to ensure that their business is being conducted in a fashion that follows rules of the outsourcing country, and in a fashion that will result in a satisfied consumer.

It is fair to say that the consumer has a substantial influence on the way H&M conducts their business. Now that awareness regarding the environment is important on a worldwide size, many consumers first verify a sustainable company is making the merchandise they are simply purchasing. For example, H&M has taken initiative in making certain the cotton they use in their products is significantly organic "cotton is the raw material we use the most. Although we do not source any raw materials, directly, we could committed to positively contributing to reduce their effects" (H&M 2009: 33). This is popular for H&M, who strains the importance with their products being made in an eco friendly environment. Often times, transnational companies view outsourcing as a 'win-win' situation (in terms of retaining a good reputation among customers) as they take their creation over seas to developing countries that provide cheap creation costs, alongside lenient labor and environmental laws and regulations.

A unique fact when analyzing the outsourcing habits of H&M in Bangladesh is the fact they don't own any of the factories in which development of H&M goods takes place. Instead, about 700 self-employed suppliers deliver their products (Alim 2010: 62). This enables H&M to keep a clean reputation among other multinational organizations to its' customers in terms of abiding by environmental guidelines and human rights laws. Because of the large purchasing amounts: "H&M is the next major buyer in Bangladesh as a single buyer" (Alim 2010: 65), H&M plays a huge role throughout the market of Bangladesh. Seeing as the business enterprise they bring to the united states is principally exporting primary material, the country must produce these goods in size for cheap. This may lead to neglect of real human rights, "The boasts surfaced such as Bangladesh, violent protests by thousands of garment workers requiring higher pay compelled the closure on Tuesday of 700 factories that supply the top names in Traditional western retail, including H&M" (Fashion Large H&M evades Taxes in Bangladesh: ). Being that H&M does not own the factories where this neglect occurs, they often declare to encourage management of factories to abide by human rights laws and regulations. Although, it is hard for you to tell for several if this is the case. Within an industry where the demand for the products continues to rise, it is very difficult for Bangladesh to break a pattern of human protection under the law abuse in order to meet a quota. A brief history of exploitation of human being rights due to the demand by overseas commercial parts in the united states is one factor contributing to having less development - or potential for development in Bangladesh.

There are 2 million individuals that make up the workforce of the garment industry of Bangladesh; of this shape, 70% are women (Wulff 2008: 1). H&M takes time to inform their workers of occupations they offer for those in expanding countries. They are really particularly proud of the work-training program applied for individuals who show interest in making clothes in Bangladesh. H&M trains possible factory employees in working sewing machines with the guarantee of guaranteed work after successful conclusion of the program. Though there are clear benefits to the thought of providing jobs for folks of Bangladesh (especially women), the work-training program H&M has put into practice has long-term unwanted effects on the introduction of the united states. An evident gain of this program being that women are provided an possibility to work and help support their families, gets the negative side effect of women carrying on to be perceived as a domestic figure - sewing clothes while men deal with the factories.

Aside from a gender bias which will be hard to break as the level of popularity of this program grows, addititionally there is the issue of young adults not carrying on in an increased education. A primary correlation is seen with respect to the number of individuals employed in a factory, and the quantity of people in that factory who have received an increased degree of education. Of the amount of individuals producing clothes in a given factory in Bangladesh, almost all has achieved only a high university diploma (Uddin 2006: 72). With less of the populace attaining a hire education, difficulty in producing an interdependent overall economy arises because of the dependence on entry-level positions created by H&M's work-training program.

One of the reasons why outsourcing in Bangladesh is extremely popular for H&M, an organization that stresses the importance of these clothes being made in an friendly to the environment environment, is a result of the leniency of labor and environmental laws. Important for consumers to be reminded, is that policies protecting the environment in the Western world are generally much more strict than those protecting the surroundings in the Global South. Multinational companies are often the key reason why environmental laws and regulations in developing countries are so lenient. Governments and government bodies in these countries generally feel pressured to adhere to the affects of the business enterprise needs of transnational businesses. "According to the BGMEA (Bangladesh Garment Manufacturers and Exporters Relationship) officials, the cultural responsibility initiatives of BGMEA directly responded to the concerns of multinational buying companies - the group they presumed constituted the most powerful stakeholder group. The BGMEA executives made specific mention of the expectations of, and pressures exerted by, buying companies such as Nike and H&M" (Azizul 2009: 108). These pressures felt display a primary relationship with the development of a country. When the government - which is supposedly the highest authority in confirmed region, is pressured to do something a certain way by a foreign investor, the united states ceases to develop within an independent manner, as there is a dependence on the business enterprise this investor provides. The extent of Bangladesh's dependence on multinational clothing companies such as H&M sometimes appears in the actual fact that around 4, 500 garment factories accounted for about 80% of the country's 16-billion-dollar export income in '09 2009 (Anger after lethal H&M factory fire: ).

In the procedure of outsourcing the creation of their items, H&M often wants the use of recycleables that need to be sourced from various countries. It really is interesting though, that they leave the chore of buying these materials to the production factories in Bangladesh. "most of the time, suppliers import the raw materials from abroad scheduled to unavailability in the local market. In some instances, H&M nominates the recycleables supplier. In that situation, suppliers choose the raw materials from those nominated options, whether they are local or overseas" (Alim 2010: 72-73). H&M's Sustainability Report from 2009 areas that transporting raw materials from a country outside Bangladesh may take up to 44 days and nights to arrive, causing potential delays in the production of goods (Alim 2010: 73). Importing materials from countries outside of Bangladesh for the creation of goods presents a issue in terms of development. First of all - being that Bangladesh produces items under the condition of cheap labor, expenditures of importing materials from other countries can damage their overall revenue rate. More importantly however, is the fact by sourcing raw materials from places outside of Bangladesh, home businesses undergo when aiming to compete against better foreign businesses. Through this cycle, foreign transnational firms shape the economy of Bangladesh.

Through investigation on the subject of the impact of globalization and the occurrence of transnational corporations in the Global South, strong quarrels declare that global outsourcing in these parts is a hurdle to the opportunity of development. As an employee of a multinational corporation, I have considered its' marriage to Bangladesh through two perspectives. Firstly, the relationship offered to me through H&M's viewpoint; being that their existence in Bangladesh permits those to outsource quality merchandise for cheap labor costs while increasing capital of the export sector and creating jobs. As well I have analyzed a more negative stance on the issue of H&M in Bangladesh. This being that H&M is hindering the likelihood for development in Bangladesh through creating dependence and pressuring the federal government. Both perspectives have in common the discussion that H&M in Bangladesh functions as a significant influence on the introduction of the united states. Although H&M follows the labor and environmental policies in Bangladesh, the business's existence in the united states is enough to decrease the likelihood of both financial and political growth while negatively affecting the country's ability to develop.

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