Rahima Akter

Ethical Business Practice and Productivity in Ready-made Garments (RMG) industries of Bangladesh

Bangladesh is the second largest supplier of Ready-made Garments (RMG) industries in the world. The country's garments industry is worth more than 81.16% of total exports, making it one of the best supplying sources for the world's leading buyers. The sector creates employment for 4 million people, of which 80% are female with more than 5,000 factories in the country. Besides, backward and forward-linkage industries that are associated with this sector provide employment for at least 20 million people. The business sustainability issues are widely ignored in the RMG sector in Bangladesh. The lack of ethical business practice and sustainability hampers or downgrades the efficiency level of the workers which ultimately decreases the productivity index. There are many initiatives from the Bangladesh government, international organisations, trade associations and buyers forums (Accord and Alliance), but none of these are able to identify the real relationship between productivity and ethical business practice except awareness building on certain issues. Broad Research Agenda: How do the business ethics of factory owners and buyers of RMG industries of Bangladesh influence the efficiency of RMG workers and ultimately impact the productivity of the industry?

There is a strong connection between ethics in business and sustainability. However, the accidents, disasters, delay in paying wages, poor working environment and exploitation of workers as described earlier, indicate that a large number of RMG manufacturers/exporters do not emphasise and value ethical issues much. However, the factory owners are not solely responsible for the negative images of the RMG industry in Bangladesh. The buyers, the big clothing retailers from developed countries, have the responsibility for maintaining the ethical practices into their supply-chain management system. A common practice amongst global companies approaching outsourcing from a cost benefit analysis (CBA) perspective is to move production to poorer nations to take advantage of cheap labour. The existing studies, few in numbers, are focused on compliance and compliance related issues. No systematic study has been conducted on ethical business practice and their impact on productivity. It is also pertinent to see why such unethical practices are being practiced and how the unethical practices influence the productivity, profitability and demand pattern from foreign buyers. This proposed study is an endeavor to fill the gap in research and help the industry and policy makers address the problems.