Principles of Organisation and Management - Rana Plaza - Case Study Example

Word Count: ???? Globalization has had an impact all over the world by means of an enhanced interconnectivity between countries that are engaged in bilateral trade and business. Each and every business sector in the contemporary world whether it is hospitality, education, tourism or manufacturing has been globalized largely due to the advent of globalization. According to Hamilton and Webster (2009), countries all over the world have been able to form political, social, technological and economical links with each other. As a result of such interconnectivity organizations have been able to identify a considerable number of sources that can provide sustainable benefits to them. Nonetheless, globalization has also been sometimes referred to as a factor that leads to severe consequences. Companies, in their quest for attaining insurmountable profit through their newly globalized venture, have been found indulging in wrong management practices (Akram, et al., 2011). They have been found to deviate from their organizational values and principles, which in turn have led to adverse effects. The events that took place over the last 10 years that includes the global financial crisis and the Ebola disease outbreak are the negative residuals of a globalized world. One common factor behind all these events is the negligence on behalf of the organizational managers and their indulgence in wrongful practices. Events like these have proven to be massive setbacks not only for the organizational members but also for the public in general. Inappropriate organizational management practices have been referred to as the major cause behind such consequences. Another major example of such a catastrophic event was the Rana Plaza garment factory collapse that took place in the Saver, Dhaka. Having mentioned this fact, the aim of this essay is to identify theories in the article and describe how they are used in this case and critically analyse the article based on theories discussed in this module. In the year 2014, the Rana Plaza, an 8 storey garment factory located in Dhaka, Bangladesh, collapsed resulting in 1,130 casualties. The building was a house to multiple garment manufacturing factories and a bank. This was one of the major catastrophes in the history of Bangladesh that proved to be major setback for various Bangladesh based companies, international corporations and has emerged as a crisis for several international level authorities such as the United Nations and the International Labour Organization. Negligence on part of the organization’s owners has been pointed as the major reason for this accident. It was reported that the building was sanctioned only for the construction of five storeys (BBC,2013). However there were eight storeys in the building, the rest three being illegally constructed. Various legal authorities were also blamed for sanctioning the construction of the building despite the fact that not much safety measures were present within the plan (Yardley, 2013). The owner of the building neglected the safety warnings which were given prior to the collapse of the building and forced workers to work in spite of unsafe working conditions. Following the collapse of this building various corporations who manufactured in this factory formed an accord/alliance in order to inspect the working conditions of several other garment manufacturing factories located in various parts of Bangladesh. It resulted in the closure of a number of factories which did not have proper safety measures in place (Manik and Yardley, 2013). This hampered the business of various managers as well as stopped the source employment for thousands of workers in the country. Consequently there were protests and demonstrations all around the country where people cited that they were not being compensated for the loss pay due to the closure of their employment opportunities. This event has been regarded as a negative residual of increased globalization. The Rana Plaza in itself is a demonstration of one of the positive impacts of globalization. As mentioned above, Rana Plaza houses several factory outlets which garments are manufactured and procured to internationally recognized companies such as Walmart, Tesco and Primark. Such a form of set up where garments are manufactured and subsequently procured from another country has only been possible due to globalization. This provides retail companies like the ones mentioned above with a cheaper source of manufacturing as the rising population in the emerging economies has proven to be a source of inexpensive labour for companies established in the developed companies (Popli and Kumari, 2012). Moreover, the cost of manufacturing garments in Bangladesh is considerably low when compared to the cost of manufacturing garments in other Asian countries such as China and India. That is why retail companies like Wal-Mart and Primark have established their factory outlasts at a number of regions in Bangladesh. Such establishments have not only benefited the organizations but also the businessmen and workers of Bangladesh who have found a sustainable source of daily income (Kose, 2013). This can be portrayed as one of the several positive outcomes of globalization. On the other hand, the incident revealed that retail companies increased their orders by a considerable level to factories in Bangladesh in order to achieve economies of scale and scope. In order to cut down on their cost of goods sold and increase their profit margin, the companies started giving stringent deadlines to the factory workers (Kose, 2013). As a result of that many of the factory owners had to appoint huge number of workers in order to manufacture and subsequently deliver the products right on time. Considerable amount of factories became overcrowded with massive number of workers. Factory owners had to rent or build other facilities on short notice and time in order to fit in the extra workers. However the short time frame often led to the establishment of facilities without taking into account adequate safety measures. The pressure of timely delivery often led managers to make the workers work rigorously under unsafe conditions (Chiu, et al., 2011). The Rana Plaza collapse was the by product of such mismanagement, and thus can be considered as the negative residual of increased globalization. Globalization has increased the intensity of interconnectivity between organizations all over the world. Managers have been known to adopt appropriate strategies that enable them maximize benefits by globalizing their operations. Appropriate resource allocation has been one of the major organizational management strategies that have proven to be a fundamental determinant of an organization’s success. Workforce allocation is one such resource allocation strategy that needs to be appropriately implemented in order to accrue benefits from a globalized business. However, recruiting workforce from home country and sending them to foreign soil has proven to be cost inefficient for companies. That is why companies started recruiting from foreign soil especially in the developing and the underdeveloped countries particularly because of the availability of cheap labour (Crane and Matten, 2010). Companies have often been found outsourcing their jobs from such countries in order to have production in bulk at very low cost thereby achieving economies of scale and scope. However, that often leads to inappropriate work force management. It has often been seen that companies outsource their productions from several small companies based in countries with cheap labour. The workload provided is immense which in turn compels the smaller companies to recruit workers beyond the adequate limit and that too at minimum wage (Naor, Linderman and Schroeder, 2010; Benn, Dunphy and Griffiths, 2014). They fail to manage the workforce appropriately leading to discrepancy in wage payments, disorderly working hours, deteriorated production quality and workplace accidents. The Rana Plaza collapse can be cited as an example of such ill management. The owner of this plaza repeatedly forced the workers to work in the factories despite the warning regarding unsafe working conditions. The underlying reason behind that was to make sure that the productions deadlines are met properly. This made the plaza overcrowded with workers and the pressure created by heavy machinery deteriorated the condition even further following which the building could not withstand any further pressure. This situation implies that the managers were following a authoritarian leadership style where emphasis was only given on the productivity and not on the wellbeing of the workers (Cummings and Worley, 2014). The workers were not adequately paid and in some cases there wages were lost. The working environment was not at all prospective which in turn stalled the growth prospect of each and every worker in the plaza. Following the collapse, several foreign companies formed an accord in order to inspect the safety measures of several other factories located in different regions of Bangladesh. The inspection led to the closure of various factories due to the presence of inadequate safety measures. The workers who were affected with such decision were promised a compensatory pay for two months by the international organizations. However later it was reported that the workers were not paid adequately. This also suggests mismanagement and negligence on part of the international organizations that completely overlooked the needs of the workers. Globalization has had a mixed effect on the workers over the past decade or so. On one hand the globalized world has increased the opportunity for earning for several workers all over the world. On the other hand increased globalization has largely been responsible for the layoff of many workers and in some case accidents (Aidt and Tzannatos, 2002; Goldberg and Pavcnik, 2007). Both the facts mentioned above can be justified by the Rana Plaza collapse in Bangladesh. The Rana Plaza factory was an example of a highly globalized world which served as a factory outlet for renowned brands all over the world, where workers were primarily engaged in the production and distribution of garments for these brands. Such a globalized business actually proved to be a source of earning for thousands of Bangladeshi households. On the negative side, the mismanagement of the mall, the unsafe working conditions, inappropriate leadership style and improper workforce management took the lives of several workers after the plaza collapsed. Given the fact that, the plaza once embodied globalization and that such interconnectivity proved to be life threatening, the collapse of this plaza can be regarded as the negative impact of globalization on workers. In todays management practice concepts, ensuring the safety of workplace is extremely important in order to achieve two fold objectives; one is to make sure the wellbeing of the workers and the other is to create a healthy workplace environment that enhances worker productivity (Nahrgang, Morgeson and Hofmann, 2011). Having a safe and healthy workplace environment will enable managers to ensure that workers are working under hygienic conditions. In that way manager will be ensure that their workers are staying far away from any sort of accidents as well as from ill health conditions. This is one way of attaining workforce efficiency which in turn will enhance the productivity of a company. Companies throughout the world take adequate measures in order to maintain health and safety in their workplace. Some of the measures include formulating a plan to control hazards in workplace, regular inspection of the workplace, training employees, establish a communication with employees in order to convey the importance of maintaining health and safety in the workplace, keep account of all first aid facilities available at the workplace (Small business bc, 2011). This is the area where the owners of Rana Plaza failed thereby leading to such a catastrophic incident (Hamilton, 2014; Laschinger, 2014). In conclusion, globalisation has often been regarded as anadvantage for the world economy. It has facilitated interconnectivity between people, government and companies all over the world. Considered as a sustainable source of development, globalization has defined the meaning of communication. It is widely known that effective communication is a major ingredient that ensures organizational success and as such ensuring the effectiveness of this factor has been a major contribution of globalization. The globalized world and its associated benefits world in itself is an example of the robust communication framework formed due to globalisation. However over the last few years, the world has also witnessed the other side of globalization where it has caused havoc on the lives of hundreds of thousands of people residing all over the world. The global financial crisis and the Ebola outbreak crisis are some of the negative residuals of an increasingly globalized world. Another similar example was noted in the case the Rana Plaza collapse that claimed the lives of 1,130 innocent workers. This incident highlighted several cases of mismanagement. It revealed the increased pressure created by international companies on the factory owners based in Bangladesh who in turn were compelled to recruit a lot of workers in order to meet the international demand. Factory owners were also compelled to rent or establish new factories with inappropriate safety measures in order to accommodate the extra workers. The Rana Plaza in itself flooded with workers and on top of that the building had inadequate safety measures which were not monitored on a daily basis. The workers were made to work in highly unsafe working conditions at aninsufficient wage. The managers were authoritative on the subordinates where their only concern was productivity and not the welfare of the employees. The worker records were not prepared accordingly which resulted in the loss of pay for them during their working hours as well as following the building collapse incident. This incident has highlighted one of the negative sides of globalization where companies have been found to go to any extent in order to gain the maximum benefits from globalization therefore indulging in wrongful management practices as well as compromising the well being of employees. As mentioned above, globalization has provided several benefits to people, government and corporations all over the world and as such it is recommended that the features of globalization are used effectively and efficiently. Since the Rana Plaza collapse last year, the government of Bangladesh as well as the two groups of international retailers have taken stern steps in order to make sure that incidents like these can be averted in the future. For example, currently there are less than 200 officials who are qualified enough to conduct a quality control check on all the factories and other facilities established in the country. The government has issued a direct order to recruit highly skilled and experienced quality control inspectors in order to make sure that each and every facilities in Bangladesh are checked for the existence of proper safety measures and favourable working environment. The government of Bangladesh has made access to bank loans fairly easy for garment factory owners so that they can use the funds to improve the physical environment of their factories. The garment factory owners have also been provided with adequate holidays pertaining to business tax in order to provide them with enough time to inspect their work facilities and make necessary renovations. Another proposition made by the government has been to compensate workers for any form of loss that they incur due to provisional suspensions (Khullar, 2014). Even after such remedial steps taken by the government, certain improvements are necessary. Organizational managers will have to use the benefits of globalization and combine them with appropriate management practices in order to make sure that the benefits are not abused. In order to make sure that the Rana Plaza incident does not happen again, factory owners have to make sure that are appropriate distribution of workforce throughout the factory thereby avoiding any form of overcrowding. The work load has to be evenly distributed through appropriate project management strategies which in turn will enable the managers to make sure that the production deadlines are met without any hassle. The managers will have to follow a team or sound style of leadership where equal emphasis is laid both on productivity as well as the welfare of employees, allowing employees to attain an all round development. As far as safety measures are concerned, factory owners will have to make sure that adequate amount of investment is done behind the installation of safety measures such as water sprinklers and fire extinguishers. Government officials have to be transparent in terms of their management by sanctioning the construction of only those building which have included appropriate safety measures within the plan whereas reject the ones, that do not have such measures. Reference Aidt, T.andTzannatos, Z., 2002. Unions and collective bargaining: economic effects in a global environment. Washington, DC: World Bank. Akram, M., Faheem, M. A., Bin Dost, M. K. and Abdullah, I., 2011. Globalization and its Impacts on the World Economic Development.International Journal of Business and Social Science, 2(23), pp. 291-297. BBC,2013.Bangladesh factory collapse toll passes 1,000. [online] Available at: http://www.bbc.com/news/world-asia-22476774 [Accessed 29 October 2014]. Benn, S., Dunphy, D. and Griffiths, A., 2014. Organizational change for corporate sustainability.London: Routledge. Chiu, C. Y., Gries, P., Torelli, C. J.and Cheng, S. Y., 2011. Toward a social psychology of globalization. Journal of Social Issues, 67(4), pp. 663-676. Crane, A. andMatten, D., 2010. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. UK: Oxford University Press. Cummings, T. and Worley, C., 2014. Organization development and change.Connecticut: Cengage Learning. Goldberg, P. K. andPavcnik, N., 2007. Distributional effects of globalization in developing countries.Journal of Economic Literature, 45, pp. 39-82. Hamilton, A., 2014. Workplace safety issues in South Korean ferry disaster.Eureka Street, 24(8), pp. 49. Hamilton, L.and Webster, P., 2009. The International Business Enviroment. New York: Oxford Univeristy Press. Khullar, A., 2014. One year after Bangladeshs Rana Plaza tragedy, has anything changed? [online] Available at: [Accessed 6 November 2014]. Kose, M. A., 2013. Indias and Chinas Recent Experience with Reform and Growth. Basingstoke: Palgrave Macmillan. Laschinger, H. K. S., 2014. Impact of Workplace Mistreatment on Patient Safety Risk and Nurse-Assessed Patient Outcomes. Journal of Nursing Administration, 44(5), pp. 284-290. Manik, J. A. and Yardley, J., 2013. Building Collapse in Bangladesh Leaves Scores Dead. [online] Available at: http://www.nytimes.com/2013/04/25/world/asia/bangladesh-building-collapse.html?pagewanted=all [Accessed 29 October 2014]. Nahrgang, J. D., Morgeson, F. P.and Hofmann, D. A., 2011. Safety at work: a meta-analytic investigation of the link between job demands, job resources, burnout, engagement, and safety outcomes. Journal of Applied Psychology,96(1), pp. 71. Naor, M., Linderman, K. and Schroeder, R., 2010. The globalization of operations in Eastern and Western countries: unpacking the relationship between national and organizational culture and its impact on manufacturing performance. Journal of Operations Management, 28(3), pp. 194-205. Popli, G. S.andKumari, S., 2012. Study on the Effects of Globalization & Sustainable. [pdf] SSRN. Available at: [Accessed 30 October 2014]. Small business bc, 2011. Seven steps to improving health and safety. [online] Available at: [Accessed 6 November 2014]. Yardley, J., 2013. Report on Deadly Factory Collapse in Bangladesh Finds Widespread Blame. [online] Available at: [Accessed 29 October 2014]. Read More