inb-301

1. Global outsourcing of apparel
manufacturing and human
resource exploitation.
INB 301
4/3/2015
Groups
# Md. Ariful Haque ----------------------------1321110
# Hamidur Rahaman Bhuiyan-----------------1321107
# Abdullah - Al – Sayem ---------------------1321105
# Vaskor Saha Joy ------------------------------1321903
# Shihab Shariar Muhib ------------------------1330300

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Table of Content
Abstract. --------------------------------------------------------------------------------------03
Global outsourcing on apparel manufacture ------------------------------------------ 03-04
Why outsourcing ----------------------------------------------------------------------------04
Benefits of Global outsourcing -----------------------------------------------------------05-06
How westerns companies exploited in Apparel manufacturer & HR ---------------06-07
10 Major Clothing Brands involve in Shocking Sweatshop Scandals-------------- 07- 10
How Nike Solved Its Sweatshop Problem-----------------------------------------------11
Why those incidents occurred every time? ----------------------------------------------11-12
Top Ten Countries with the Cheapest Labor cost --------------------------------------12 -13
Do they really want to solve those problems? -------------------------------------------13-14
Organizations against human resource exploitation-------------------------------------14
How to make sue Human resources/labors rights----------------------------------------14
Reference -------------------------------------------------------------------------------------15

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Abstract
Increasing globalization and a turbulent economy have sent manufacturing overseas for many industries.
USA and European clothing companies have been hit hard by this trend, outsourcing to help stay
competitive and profitable. The US apparel industry is strongly affected by economic crisis. Outsourcing
is a common business practice, particularly in the fashion industry, as labor can often be found more
inexpensively and at different skill levels in various areas of the world. However, while cost savings
associated with outsourcing work in the clothing industry can be significant, there may also be
drawbacks to this practice, which can adversely affect the industry as a whole.
Global outsourcing on apparel
manufacture (1)
A practice used by different companies to reduce costs by transferring portions of work to
outside suppliers rather than completing it internally.
For example, Apple Company signs all its products designed by apple in California but in the
U.S. design is as far as Apple is willing to go. The tech giant outsources hundreds of thousands
of manufacturing jobs to countries like Mongolia, China, Korea, and Taiwan. Apple apparently
outsources these jobs.
A successful outsourcing requires a strong understanding of the organization's capabilities and
future direction.
If we look at the clothing tag on our shirt. Most likely, the shirt is manufactured in developing
countries like Bangladesh, India. China and other countries. This can be explained by two words.
Global outsourcing. Global outsourcing has been a hot topic concerning many Americans since
the early 1990’s. Businesses are always deciding whether or not to take on this great challenge.
This trend can be seen in the textile and apparel industry, companies have moved mass amounts
of production overseas. Although it seems all companies in the textile and apparel industry are
transferring their production to other countries, it is not essential for a business to outsource in

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order to be competitive. Throughout the history of outsourcing, arguments both for the
advantages and disadvantages have been heard, but by looking at two companies such as Liz
Claiborne or American Apparel we can see exactly how outsourcing works
Why outsourcing (2)
Apparel outsourcing is an arrangement in which one company provides services for another company that
could also be or usually have been provided in-house. Apparel outsourcing is a trend that is becoming
more common in information technology and other industries for services that have usually been regarded
as intrinsic to managing a business. In some cases, the entire information management of a company is
outsourced, including planning and business analysis as well as the installation, management, and
servicing of the network and workstations. Apparel outsourcing can range from the large contract in
which a company like IBM manages It services for a company like Xerox to the practice of hiring
contractors and temporary office workers on an individual basis.
The benefits of apparel outsourcing vary greatly, depending on the applications to be outsourced and the
organization’s resources. There are, however, several reasons why apparel outsourcing with Benefit
Concepts makes sense for many employers.
Here are some common reasons:
 Reduce and control operating costs
 Improve company focus
 Gain access to world class capabilities
 Free internal resources for other purposes
 A function is time consuming to manage or is out of control
 Insufficient resources are available internally
 Share risks with a partner company
Here early days, cost or headcount reduction were the most common reasons to outsource. In today’s
world the drivers are often more strategic, and focus on carrying out core value-adding activities in-house
where an organization can best utilize its own core competencies. Main factors influencing successful
apparel outsourcing.

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Benefits of Global outsourcing (3)
There are many benefits in outsourcing. Companies that decide to outsource do so for a number
of reasons, all of which are based on realizing gains in business profitability and efficiency. The
advantages are.
Cost benefits: The most important benefit is cost savings and outsourcing brings about. We
can get our job done at a lower cost and a better quality as well. Due to the difference in wages
between western countries and Asia the same kind of work that is done over there can be
Bangladesh at a fraction of the cost. There is a cost savings of around 60% by outsourcing your
work to Bangladesh. The quality of the services provided is high thereby ensuring that low-cost
does not mean low-quality.
Risk-sharing: One of the most crucial factors determining the outcome of a campaign is
risk-analysis. Outsourcing certain components of your business process helps the organization to
shift certain responsibilities to the outsourced vendor. Since the outsourced vendor is a specialist,
they plan your risk-mitigating factors better
Reduced Operational and Recruitment costs: Outsourcing eludes the need to hire
individuals in-house; hence recruitment and operational costs can be minimized to a great extent.
This is one of the prime advantages of offshore outsourcing.
Flexibility: Some manufacturing companies have gained increased flexibility by outsourcing
their production. Typically, production gets outsourced to a contract manufacturer, or a company
that produces goods under the label or brand of another firm. Contract manufacturers might
produce goods for two or more companies, and even for competitors within the same Industry.
Focus: Some companies have experienced extreme paradigm shifts that have prompted them to
outsource their manufacturing. A company that realizes its core competency, the thing it does
best, is the sales and marketing of its product and not the production of its product may often
choose to outsource its non-core activity, or the manufacturing of its goods. With the production
outsourced, the company can now focus its resources, both human and financial, on the areas that

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increase revenue and profit. Normally, outsourcing reduces manufacturing costs, so if the
company increases its revenue through a better focus on sales and marketing, it increases its
profit margin as well.
How westerns companies exploited in
Apparel manufacturer & HR (4)
Exploitation means the action or fact of treating someone unfairly in order to benefit from their
work. Exploitation takes on many forms. It is with different political structures, different cultural
tolerances, and with varying perspectives that we recognize exploitation around the world, even
in our own backyard. The roaches that exploit desperate people for underpaid labor are scattering
from North America to Asia into Africa.
While not the only contributing factor, outsourcing in the last several decades has spawned an
industrial revolution across Asia. The desire to maximize profit is a function of every business
model, and outsourcing to cheaper labor markets continues to be a logical move for many
companies. The problem is when profit ceilings are not defined by basic ethics, and workers are
exploited or worse, enslaved.
High wages to Low Wages: Because clothing manufacturing remains a labor-intensive
process, the cost of labor is an important consideration. Large retail buyers have been able to
take advantage of the availability of a global pool of workers who differ in their wages for
historical, institutional as well as economic reasons as well as outright repression of workers'
rights in some cases. Companies bring these workers into competition with one another by
relocating production from high-wage areas to low-wage ones, by contracting out the industry
term is outsourcing aspects of production to companies already operating in low-wage
areas, or by forcing the movement of low-wage workers to high-wage areas in conditions where
they cannot demand higher pay.

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Using Subcontractors: Apparel manufacturing, the middle segment of the fashion chain,
is the most fragmented, least technologically sophisticated, and most geographically dispersed.
In an effort to drive down costs, clothing manufacturers primarily from the United States but also
East Asian and some Latin American ones have increasingly opted to work with subcontractors
in low-wage areas. These garments are manufactured by thousands of small companies, mostly
contractors and smaller retail chains who rely on low wage labor.
Using child Labor: Many Developing country , North industrialized countries and In Africa
contractors uses child labor for assemble the production . Mother company aren’t monitor on
contractor Working condition. Most workers have to work on Sweetshop.
Violating Multiple Labor Law: Some Contractors, Sub- contractors companies have
even been accused of hiring suppliers who place workers in poor-working conditions, pay below
minimum wage, and violate other labor laws.
The universe of apparel companies is characterized by manufacturers, jobbers and contractors.
Manufacturers carry out the whole process from design to finishing to marketing. They contract
out work when demand suddenly peaks. Jobbers design garments, acquire fabric, and arrange for
the sale of finished clothes, but they carry out production by cutting fabric and hiring contractors
to assemble the clothes. Contractors are companies that receive already cut garment in bundles
from the jobbers and process it into finished clothes. The contracting sub-segment of the apparel
chain allows companies in the fashion industry to expand production to meet increased demand,
avoid large capital outlays, and prevent workers sitting idle when demand drops off. Sub-
contracting is also done more and more by large retailers like the Gap that sell their own brands

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10 Major Clothing Brands involve in
Shocking Sweatshop Scandals (5)
Clothing is something we buy when we either need it or when we are having impulses telling us
to buy a nice shirt even if it might be a little pricier than we would like. But more often than not,
we buy it without taking into account where it’s coming from and what kinds of people are
making it. Unfortunately, many clothing brands tend to have their products manufactured in
sweatshops in impoverished areas of the world, with young children found working in dangerous
working conditions and with the factories they work in not being well-constructed.
Even more sad is the fact that so many big-name brands rely on the services of sweatshops in
countries like Bangladesh to manufacture their clothes. However, many companies have been
caught doing such practices and have suffered the consequences as a result. With this top 10 list,
we’ll be talking about 10 of those major companies that have done exactly that, and the fallout
they suffered after being caught.
Some companies are known mainly in their home territory while others such as Nike and Gap are
brands that are staples in multiple countries worldwide. Furthermore, some companies have
responded emphatically to accusations of sweatshop labor, while others haven’t responded nearly
as quickly or as effectively. Whatever the end result is, it’s still a controversial issue in the sense
that these workers get paid extremely minimal amounts of money and work many hours a week
for the sake of designing the newest trendy pieces of clothing.
Whether you buy clothing from these companies often or you don’t buy them at all, it’s still
shocking enough to make you think twice about where your newest threads come from. Here are
10 of the most shocking examples of major clothing companies and sweatshop labor.
1.H&M : H&M advertise itself as a pro-green company, It has a spotty track record overall, ith
a 1997 TV documentary in Sweden accusing the company of putting young children in the
Philippines through child labor to produce their cloths. In 2010, it was revealed that a factory in

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Bangladesh supplying to Swedish based clothing retailer H&M had caught fire with the fire
exits blocked and with inefficient equipment to stop the fire and killed 21 workers.
2. Nike: Nike has been promoter of ethical practices and workers rights, their track record. But
recently it faced world boycotting campaign for unethical working conditions. their use of
sweatshop labor has gone back to the ‘70s, with reports of labor workers in several Asian
countries.
3. Wal-Mart: After a factory building in Bangladesh collapsed in April of 2013, it was
reported shortly after that Wal-Mart was one of the major companies that the factory building
supplied to. After the collapse that the use of the factory to manufacture their clothing wasn’t
even authorized. Before that, Wal-Mart was accused in 2008 of forcing Bangladeshi workers to
work 19-hour shifts while only earning about $20 or so a month lower than the legal minimum
wage in Bangladesh. The incident caused the company to issue biannual ethical sourcing reports
after it had stopped doing so in 2004.
4. The Gap: One of the most recognizable jean brands in the world, The Gap was caught up in
a scandal involving workers in India in 2010 when an investigation showed that those workers
had been working 16-hour days with extremely minimal and illegal pay, to the tune of less than
40 cents per day. The company claimed that all of its factories needed to stick to its non-
negotiable standards. This is hardly the first time the company has been involved in such a
scandal but The Gap announced in 2013 that it would partner with 20 other companies to
improve working condition in Bangladesh
5. La Senza : Although the lingerie brand La Senza is a largely Canadian company, it is far
from immune in terms of its relation to sweatshops. In April of 2005, the Spectrum-Sweater
factory located in Savar, Bangladesh just northeast of the capital city of Dhaka collapsed with
64 recorded fatalities and with some people permanently handicapped. Furthermore, in 2006, the
company was called out for abandoning workers in a bra factory in Thailand and moving their
production to another factory, as the one in Thailand was seen as actually having good working
conditions. La Senza isn’t the only company specializing in lingerie to be caught using
sweatshop

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6. Victoria’s Secret: In 2007, the lingerie company Victoria’s Secret a company that has
vouched for free trade – was caught in a sweatshop scandal of its own when it was revealed that
conditions regarding their workers in Jordan were far from ideal. In fact, such conditions
involved their workers being slapped and/or beaten if their production was sub-par. Furthermore,
those workers were found to have been forced to work five or more overtime hours per day,
without being given the overtime pay they were legally obligated to receive. A few years later, it
was revealed that their lingerie was made by cotton picked by children working in Burkina Faso.
7. Disney Although Disney is one of the most recognizable brands in the world, especially
among children, their history with sweatshop labor is in stark contrast to their image. Sweatshops
in countries like China, Bangladesh and Haiti have been known to produce clothing for the
company, with Chinese labor workers in particular being paid 33 to 41 cents an hour, with
numerous employees being as young as 14 years of age with no health benefits or a pension
included with their employment. In Tazreen, Bangladesh, a fire at a sweatshop producing Disney
clothing as well as brands associated with Sears and Wal-Mart caused the deaths of 114
workers.
8. Sears: Also caught up in the scandal surrounding the fire at the factory in Tazreen is the
North American retailer Sears. The factory producing its clothing before the fire had locked fire
exit doors and poor fire extinguishing equipment, and the workers were told to get back to work
when the first fire alarm went off. Although Sears was one of the companies whose products
were made at that factory, its track record with sweatshop labour in general isn’t that great. In
2003, a story was published in The Guardian about a Vietnamese worker moving to the
American Samoa to make clothes for the company, only to be starved and beaten while in
working
9. Joe Fresh: Once a clothing company that had come through Loblaw Inc. in Canada, Joe
Fresh has since grown a massive presence in the United States. However, the company’s
manufacturing was done in a sweatshop building in Bangladesh, which collapsed last year,
killing nearly 400. In response, Loblaw Inc. announced that it would send representatives to the
country with the intention of offering compensation to the victims’ families. After being accused
of protecting their trademark but not their workers, the company vowed to be a “force for good”
Bangladesh.

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10. Marks and Spencer This U.K. company makes this list not necessarily because of how
big their brand is, but because of how much of a surprise their sweatshop scandal truly was.
Although they have often been praised for their emphasis on ethical practices, they and several
other companies such as Gap were discovered in 2010 to have been caught up in a scandal where
Indian workers were forced to work overtime in other words, 16 hours a day in shifts while
being paid just under 25p an hour. A spokesperson for the company responded by saying that
they took “ethical sourcing and trust in our brand extremely seriously.
How Nike Solved Its Sweatshop Problem
(6)
Nike faced protest in 1997 which was mainly organized by College students by followed that
1998 Nike faced again a problem that is weak demand and brutal criticism and realized that they
needed to change theses thing. According that Nike started In 1999 ,the Fair Labor Association,
a non-profit group that combines companies, and human rights and labor representatives to
establish independent monitoring and a code of conduct, including a minimum age and a 60-hour
work week, and pushes other brands to join. If they did not do that they would lose their market
in world and faced some pressure from world people’s and country leader. They were also stated
to visit adults factories to cheek their system in 2002 even they repeated visit to the problematic
company to solve their standard and force. They continued this work till 2004. Also in 2004
Human rights activists acknowledge that increased monitoring efforts at least deal with some of
the worst problems, like locked factory doors and unsafe chemicals, but the scenery is still in the
same stage. 2005 Nike published a fresh company list which they contrast with and
published 108-page report . In that report they described the conditions and pay in its factories
and acknowledging widespread issues, particularly in its south Asian factories. In that way Nike
actually solve their sweatshop issue.
Why those incidents occurred every
time? (7)

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Everybody knows about human resource exploiting around the world. How the exploit here we
already know about it, but we want to know why? Why this problem does exist in this world.
Poverty and unemployment: Worker mostly exploits by the wages or if I won’t to
explain it elaborately the wages the worker get is very cheap but the importer of that product sell
in to the final customer in high price so there is a big gap but they have no other options. The
link between poverty and cheap clothes in Bangladesh, India and other developing countries has
been well established. But the clothes people buy in the developed countries in a high price.
Millions of workers around the world, mainly women, suffer poverty wages and exploitation
producing cheap fashion for us.
Lack of Education: Most of the worker who works in apparel industries are illiterate and
doesn’t have any basic education, that’s why only a few workchoices available for them. For
example, people who work in apparel industries they have no other better option than garments
because other sectors are not out exploitations.
Local companies: Local exporters like in Bangladesh, China, India and other countries who
take the order from their buyer they always focus on how to maximizing their profit.Thets why
HR exploitation still exist in the world.
Government monitory policy: Countries like Bangladesh, India, China and other
countries who are the big exporter of apparel most of them are developing countries and
unemployment problem are the big problem for them, that’s why government also feels hesitate
to take any kinds steps to ensure their rights.
Countries with the Cheapest Labor (8)
With the world getting smaller by the minute because of the never ending advance of modern
technology, companies have deemed it wise to outsource the manufacture of its products and the
service that it provides to countries where the labor is dirt cheap, despite all these tangible and
intangible costs, the labor cost of these countries are so low that even if add all these things

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together, everything will still come out lower than the astronomical labor costs in Western
countries that amount from $19 and above
These are the top 10 countries with the cheapest labor rates.
Madagascar $0.18 per hour
Bangladesh $0.23 per hour
Pakistan $0.32 per hour
Ghana $0.32 per hour
Vietnam $ 0.39 per hour
India $0.48 per hour
Kenya $0.50 per hour
Senegal $0.52 per hour
Sri Lanka $0.62 per hour
Egypt $0.80 per hour
Do they really want to solve those
problems? (9)
Most of the company likes Nike, mark & Spencer, Sears Victoria’s secret, the gap Walmart and
H&M are mostly Involve to the sweatshop. For those companies outsourcing some problem are
really created in outsourcing company. Mostly these company try to solve those problem not to
lose their market share because these kind of problem sometime decrease their sell and
downstream their reputation. Even they can face the protest of the whole world which can stop
their outsourcing benefit.
After the sweatshop problem these companies are always try to solve outsourcing related
problem but in the past they were not think about these too much for that

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But some reason or some factors that these companies not show too much interest to solve
outsourcing reacted problem In that not only the western company but local companies are also
responsible to create these problems. Companies want to make more money by that they can give
their workers low wage and they earn a lot of profit, just by doing this. The Big Companies
doesn’t need to worry about life insurance or medical insurance for their workers. They also not
provide the good environment and not a good place to work. The owners can do whatever they
want to do their workers like hitting them and forcing them to work longer. More and more big
businesses and even small ones for that matter increase the bottom-line profit, while making their
product affordable through hiring or sub-contracting manufacturing units in third world countries
Organizations against human resource
exploitation: (10)
 Clean Clothes Campaign
 International Labor Rights Fund
 International Labor Organization
 Institute for Global Labor and Human Rights
 Green America
 United Students Against Sweatshops
 Free the Children
 Not for Sale Campaign
How to make sure their right? (11)
Western company becomes more serious about Human resource right. After RANA PLAZA
incident they are now ensure their full rights. Following their rights western company are forcing
to the outsourcing company to provide the all workers a better work environment and life
 Provide the safe work environment and free from undue dangers

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 The right to Fair pay, meaning at least a minimum wage and overtime for any hours
worked over 40 hours a week
 the right not to be discriminated against on the basis of marital status, gender identity,
sexual orientation and other characteristics
 provide all personal protective equipment provided
 Avoid the child labor
Reference
3. http://www.forbes.com/sites/xerox/2013/07/12/the-benefits-of-outsourcing-finance-and-
accounting/
http://www.thehindubusinessline.com/news/international/bangladesh-is-still-attractive-for-
garment-outsourcing/article4766013.ece
http://viewpoints.kalypso.com/entry/apparel-manufacturing-outsourcing-recent-trends-and-
opportunities-in-the-us/
https://www.enterprisenation.com/blog/posts/made-in-the-uk-the-pros-and-cons-of-outsourcing-
clothing-manufacture-overseas
4. Hector Figueroa , Assistant researcher, The Service Employees International Union .
North American Congress on Latin America. WWW.nacla.com
#Matt Wesley, World Affair Council Report on Apparel Industry
5. http://www.therichest.com/rich-list/most-shocking/10-major-clothing-brands-caught-in-
shocking-sweatshop-scandals/?view=all
6. http://www.businessinsider.com/how-nike-solved-its-sweatshop-problem-2013-5
7. http://www.triplepundit.com/2013/04/7-reasons-sweatshops-persist/
8. http://www.therichest.com/rich-list/poorest-list/countries-with-the-cheapest-labor/
9. http://www.customwritten.com/.../balwant-brian-singh-fraud
10. http://www.nmass.org/campaigns/

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11. http://employment.findlaw.com/legal-help-and-resources/protecting-the-rights-of-
workers.html