Trade Relations between Developed and Developing Countries - Essay Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxx Course : xxxxxxxxxxx Title : xxxxxxxxxxxx Tutor : xxxxxxxxxxx @2013 Introduction Several aspects of individuals’ material lifestyle in developed nations can be related to trade relations between the developed nations and the developing nation. It is believed that majority of the products, such as clothes, toys and the technology used in developed countries are normally produced in developing countries. However, the condition under which these products are produced is always pathetic (Wokutch, et al, 2003). It is because of this, that retailers in developed nations need to be concerned about the labor condition under which the products they sell are produced. Majority of the products sold by retailers in developed nations are normally produced under sweatshop labor conditions in developing countries. This paper therefore seeks to discuss whether sweatshop labor conditions in developing nations should be the concern of retailers in developed nations. Sweatshop labor conditions are broadly understood as unreasonable, unhealthy and dangerous working conditions. It is believed that a bigger percentage of this working condition prevail in developing nations. According to Wong (2013), a greater percentage of sweatshops in the world are situated in Asia. Therefore, even though retailers in developed nations greatly benefit from the sweatshops, it is essential for them to be concerned about the conditions of work the factories offer. The retailers in developed nations need to be concerned about the sweatshop labor conditions so as to eliminate unfair competition in international trade. According to Harrison and Scorse (2006), improving the conditions of work and wages for many unskilled workers in developing nations will enable organizations operating in developed nations face fair competition from those operating in developing nations. It is believed that most companies operating in developing nations enjoy unlimited pools of cheap labor. This in turn assists the companies to produce at a reduced cost, thus making them compete unfairly in international market (Wong, 2013). Retailers in developed nations should also be concerned about the sweatshop labor conditions in developing countries so as to promote business ethics. Business ethics refer to moral principles that guide the manner in which a business behaves. It is essential to note that similar principles that determine how an individual behaves also apply to business. Acting morally entails differentiating between what is right and wrong and then making the correct decision (Shaw, 2010). Therefore, it is not right for an organization to employ child labor, to underpay or overwork employees. All these are believed to be unethical business behavior. Therefore, it is high time for retailers in developed nations to stop concentrating on how much they are gaining by trading with sweatshops in developing nations and be concerned about the working conditions in those factories. This move will assists in improving business ethics globally. The existence of sweatshops in developing nations greatly promotes unethical business behavior, thus the need for retailers in developed nation to be concerned. Wong (2013) argues that workers in sweatshops are greatly underpaid and subjected to hash working conditions. He further argues that in many developing countries such as Philippines and Thailand, the minimum wage levels are much lower than that in United States of America. According to Wong (2013), the current minimum wage in the United States of America is 7.25 dollars, while in Philippines and Thailand are 69 cents and 1.48 dollars respectively. However, regardless of the lower minimum wage in these two nations, workers are normally paid lesser than what the estimates suggest, thus making their survival much hard. Therefore, retailers in developed nations need to be concerned about the working conditions in developing nations so as to improve the global business ethics. Retailers in developed nations should be concerned about the sweatshop labor conditions in developing nations so as to protect human rights. It is believed that human right is usually violated in many sweatshops. It is therefore essential for retailers in developed nation to be concerned about the working conditions in sweatshop by either avoiding buying or selling products from these factories so as to protect the lives of individuals from being violated. According to Moran (2002), the conditions of work and how workers are treated in factories that manufacture garments, footwear, handbags, soccer balls and toys in developing countries violates human right. It is believed that majority of foreign owned and subcontractor companies display greater evidence of harm, abuse and exploitation of workers. Many workers are usually paid few dollars and expected to work for six days a week. In the peak seasons, workers are usually forced to work overtime, thus totaling up to more than eighty hours a week. In some instances, workers may be forced to work in two successive shifts, without a break in between. There are always disciplinary fines for talking, for frequently going to the rest room and for reporting late. At times, the disciplinary punishment take a form of corporal punishment, that is, employees may be forced to stand in the sun with their arms raised, run several laps around the company or rapping their mouth with a tape (Moran 2002). Promotion of international code of conduct is essential to any business. Businesses should not only concentrate on how much they are getting from the deal, but also consider if the business, they are engaging in, is in line with the stipulated code of conduct. Therefore, retailers in developed nations should be concerned about the sweatshop labor conditions in developing nations so as to assist in promoting international code of conduct. The retailers should not be overexcited by the huge profits they are getting from selling the products from sweatshops in developing. Instead, they should be concerned about the factories code of conduct. The retailers should be concerned with whether the sweatshops operate within the law, that is, whether they respect human rights and dignity. It is believed that stringent labor standards are essential for a firm’s growth. According to Maryanov (2010), codes of conduct are tools of private ordering that enables organizations to control themselves and effectively respond to consumer demands. Maryanov (2010) further argues that codes of conduct form a marketable brand picture of social consciousness. According to him, codes of conduct ensure that investors and consumers trade with their consciousness and care regarding labor practices. On the other hand, it can be argued that retailers in developed countries should not be concerned with sweatshop labor conditions in developing countries. This is because companies in developing nations have seriously untaken CSR activities, essentially those that promote conducive and ethical working conditions. A case in point is a study conducted by Welford and Frost, (2006) on Corporate Social Responsibility in the Asian Supply Chains. The objective of the study was to review the benefits of the implementation of CSR within the supply chain of companies in the regions. The study involved examination working conditions in countries such as Bangladesh, Indonesia, Cambodia, Thailand and Indonesia. According to Welford and Frost, (2006) most of the factory managers and the workers interviewed, confessed that the working practices and conditions in factories have greatly improved over the last few years. This is because issues dealing with the rights of workers and good working conditions are viewed as the most significant aspects of CSR in the region. In addition, many companies have adopted CSR strategies that offer good quality work that aims at pooling its workforce out of poverty. Interestingly, most of the factory managers acknowledged the fact that their employee CSR activities have moved away from inspection of their employees and towards building relationships with their workforce that is based on trust. Furthermore, CSR managers for instance in Indonesia and Cambodia work towards ensuring that workers are empowered in terms of knowing their rights and they are respected at all times. On the basis of the findings of this particular study it can therefore be concluded that retailers in developed countries should not be concerned with sweatshop labor conditions in developing countries. This is because the implementation of CSR in developing is progressively reducing sweatshop labor conditions. Also, it can be argued that retailers in developed countries should not be concerned with sweatshop labor conditions in developing countries, based on the fact that sweatshop labor conditions are actually not so bad after all. Blau, (2006) highlights that various analysts argue that the existence of sweatshop labor conditions in developing nations is the best option that is available for poor people in the world. This is because if they were not the best option, then workers would not have allowed themselves to be part of such a working condition. For instance a report by Wazir, (2001) on the Gurdian News Paper, revealed that employees of the Nike Company in Indonesia, Vietnam, Thailand and Pakistan, continue to accept the poor working conditions that are offered to them by the company. This is because the workers in the company continue to face violent intimidation, dismissal, poverty, and increase in working hours and harassment. Also, Weeks, (2010) reveals that sweatshops offer higher paying wages that other job opportunities in the similar industries, consequently many workers in developing nations prefer to work in poor working condition despite of this knowledge. A case in point is the recent cases of tragedies in the Bangladesh multi-billion-dollar clothing industries. Palmer (2013) discloses that the Bangladesh people and the country in general tolerate dangerous working conditions, despite of their knowledge that the working conditions may be deadly. For instance in April 2013 at total of 1,129 people have been killed in Bangladesh factories as a result of fire and the collapsing of the factory building (Palmer, 2013). Despite of the existence of such dangerous conditions, most of the employees continue to tolerate such poor working conditions. Such findings provide the impression that sweatshop labor conditions are actually the best option for the workers in the developing countries. This is because the conditions are the most suitable for them and thus, there should be no great concern or emphasis on the matter. Another argument is that developed countries should not be concerned with sweatshop labor conditions in developing countries, because it is actually the most rational way that can assist poor people to attain their ends. Hartman and Arnold, (2010) argue that this type of decision is optimal for the economy of developing nations due to the fact that they represent an agreement between producers and labor consumers concerning the appropriate exchange of labor. Hartman and Arnold, (2010) further argue that however much developed nations may not be impressed with the poor working conditions in developing nations, this type of market or work place is the one that enables people to meet their needs. In addition, sweatshop labor assists in improving the general economic welfare of the society. According to Myerson (1997) retailers in developed countries should not be concerned with sweatshop labor conditions in developing countries. Myerson (1997) bases his argument on the economic theory whereby economists view the growth of employment to be of tremendous good for poor and developing countries. When developing countries exploit their natural resources, they create labour, labour then allows the countries to be able to expand their exports and thus advance their economies. In essence when asked if there are excessive sweatshops in developing nations, economists such as Sachs Jeffrey would argue that the main concern is that indeed there are lots of sweatshops, nevertheless they are not adequate enough to assist in advancing the economies of developing nations. As a stated by economic theory, in order for economic development to be felt adequate labour has to exist. It can also be argued that concerns retailers in developed countries should not be concerned with sweatshop labor conditions in developing countries because they have a moral obligation of acting in a way that ensures that the satisfaction of the workforce is maintained. According to the Maslow theory of hierarchy, employees have needs and if the workplace meets these particular needs then employees are bound to gain satisfaction (Amstrong, 2006). Also, the goal theory postulates that the question that runs through the minds of every employee is basically ‘’ what do I gain or benefit out of this task?’’ Consequently, if a certain working condition assists employees to gain satisfaction on the grounds of the benefits they receive then concerns should not be raised. As revealed by Weeks, (2010) sweatshops offer higher paying wages that other job opportunities in the similar industries, consequently many workers in developing nations prefer to work in poor working condition despite of this knowledge. Thus, it can be argued that retailers in developed nations have the moral obligation of ensuring that employees are satisfied. Conclusion The discussion above has presented various arguments on the notion whether retailers in developed countries should not be concerned with sweatshop labor conditions in developing countries. Several arguments have been raised to support the need for concern by developing nations. One of the reasons is to eliminate unfair competition in international trade. Another supporting factor raised is to promote business ethics, which entails moral principles that guide the manner in which a business behaves. Also, the existence of sweatshops in developing nations greatly promotes unethical business behavior; consequently there is need for concern. Also it is import for retailers in developed nations to be concerned about poor working conditions in developing nations in order to protect human rights. Furthermore, retailers in developed nations should be concerned about the sweatshop labor conditions in developing nations so as to assist in promoting international code of conduct. On the other, the paper has presented arguments to contend the fact that retailers in developed countries should be concerned with sweatshop labor conditions in developing countries. One of the points raised is that developing nations have seriously untaken CSR activities, essentially those that promote conducive and ethical working conditions. In addition, economists argue that sweatshop labor conditions are actually not so bad after all. Also sweatshop labor conditions are the most rational way that can assist poor people to attain their ends. In addition they assist in the promotion of economic growth. Also, retailers have a moral obligation of acting in a way that ensures that the satisfaction of the workforce is maintained. Consequently, if employees in developing nations are satisfied then there is no need for concern. In conclusion, this paper states that the topic is very contentious and more research should be undertaken on the matter. References Amstrong, M, 2006, Human Resource Management Practice, 10th Edition, Kogan Page Limited, London, p 251. Blau, J, 2006, Public Sociologies Reader , Rowman & Littlefield. Hartman, P and Arnold, D, 2010, Beyond Sweatshops: positive deviancy and global labor practices. Harrison, A & Scorse, J 2006, Improving the Conditions of Workers? Minimum wage legislation and anti-sweatshop activism. California management review vol 48. No.2 Greg, R & Anne, 2003, Rewarding Creativity: When does it really Matter? The Leadership Quarterly, 14 (4-5), P 569-586. Shaw, H. W 2010, Business Ethics: A Textbook With Cases.: A Textbook with Cases. Cengage Learning Moran, H. T 2002, Beyond Sweatshops: Foreign Direct Investment and Globalization in Developing Countries. Brookings Institution Press Myerson, A, 1997, “The World; In Principle, a Case For More 'Sweatshops',” The New York Times, June 22. Maryanov, C. 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