Early in his presentation Richard Locke identifies that globalisation brings on a number of challenges that managers have to face in their daily decision process. Globalisation has sparked a debate over labour standards practised by employers around the world, particularly in developing countries. Excessive work hours, low wages, poor health and safety regulations are among a few of the issues. In my opinion usage of child labour in factories has to be addressed the most. I believe that no child should be denied the opportunity of basic education. However, it should also be noted that in some countries education is considered as a privilege. So in some cases providing a child with a way to earn a living is not so unethical. Surely by providing this opportunity is better than letting them starving to death on the streets. But I firmly believe that in the countries where education is available, children should not be employed for purposes of cheap labour.
During the last couple of years businesses all over the world have tried to improve labour standards in order to clean up their image in the western world and to improve living conditions in the places where the bad practices are employed. The majority of these companies have been using the so called compliance model to combat this - a company would create a voluntary code of conduct for the suppliers used to outsource production. Then their progress would be monitored to see whether the supplier follows this code of conduct. The next step in this model is to create a correction a plan – a series of actions that the buyer would demand from the supplier. Richard Locke describes this as “police mechanism”.
I believe that the effectiveness of this model would largely depend on the culture of the country where it is used. For example some cultures would not comply with requests from some American company because that is the way they are used to doing things. Furthermore, from the data that Richard presented, this policing method may not be so effective; as proved in the Nike case. Even though the overall quality has increased by 5%, the number of suppliers who employ bad practises has actually risen. On the other hand as seen from the data presented from the ABC case, the productivity has risen, so did the wages of workers.
There are certain assumptions that go along with the compliance model. Dr. Locke says that there exists an over simplistic view – the fact that global buyers can dictate the terms to local suppliers and make them follow these instructions. However, this is not true in real world; there are some very powerful suppliers, such as Foxconn – a Taiwanese electronic parts supplier. And these suppliers would often have more power than the buyers themselves. The second assumption is that the so called checklist approach to audits and factory surveys is a good measure of how factories perform. In real life, the picture drawn from these audits is often inaccurate and incomplete. And the...