Disney Cleanses its Supply Chain Source: Greenhouse, Steven. \"Some Retailers Re
ID: 383098 • Letter: D
Question
Disney Cleanses its Supply Chain
Source: Greenhouse, Steven. "Some Retailers Rethink Role in Bangladesh," New York
Times,
http://www.nytimes.com/2013/05/02/business/some-retailers-rethink-their-role-in-bangladesh.html?pagewanted=all&_r=1&, posted 5/1/2013.
Ever since a building with garment factories collapsed in Bangladesh in April, 2013, killing more than 1,000 people, Western apparel companies with ties to the country have scrambled to address public concerns about working conditions there. But one big American company, Disney, had
already decided
to leave the
countrylong dash—pushed
by the devastating fire just six months earlier that killed 112 people. The Walt Disney Company, the world's largest licensor with sales of nearly $40 billion, recently ordered an end to the production of branded merchandise in Bangladesh. The company sent a letter to thousands of licensees and vendors setting out new rules for overseas production.
This comes as no surprise as Disney's public image as a safe, clean, and wholesome company is carefully maintained. Disney's move reflects the difficult calculus that companies with operations in countries like Bangladesh are facing as they balance profit and reputation against the backdrop of a wrenching human disaster. "We felt this was the most responsible way to manage the challenges associated with our supply chain," says Disney's president of consumer products.
With some labor groups urging Western companies to stay and fix problems rather than leave, Disney said that it would pursue "a responsible transition that mitigates the impact to affected workers and business." It set out a yearlong transitional period for its contractors to phase out production in Bangladesh, Pakistan, Belarus, Ecuador and Venezuela by April, 2014. In deciding in which countries to permit production, the company relied heavily on the World Bank's Governing Indicators, which evaluate performance on issues like governmenteffectiveness, rule of law, accountability and control of corruption.
Critical thinking questions:
1. Disney's decision to leave these 5 countries vs. staying and trying to improve conditions
A.
is based strictly on profits and losses.
B.
relied on a third party evaluation.
C.
reflects an anti-third world bias.
D.
All of the above.
2. The building collapse in Bangladesh was
A.
a rare breakdown that caused many deaths.
B.
not of concern to Disney and other buyers.
C.
not the first safety violation Disney observed.
D.
Disney's fault.
3. Disney left Bangladesh
A.
immediately after the collapse.
B.
after a phase-out period.
C.
a few months after the fire.
D.
None of the
abovelong dash—it
never left.
4. Major companies can protect their reputations when global supply chains are so complex by
A.
phasing out all foreign production.
B.
carefully examining each and every supplier.
C.
rebuilding all the factories with higher safety codes.
D.
refusing to do business with companies that use South Asian workers.
Explanation / Answer
1.B .It depended on third party evaluation.
2.C It was Not the first safety violation that Disney observed.
3.B Disney left after a systematic phase out.
4.B Companies protect their reputation by examining each and every supplier.