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Disaster in Bangladesh: The Collapse of the Rana Plaza Building
1. From an economic perspective, was the shift to a free trade regime in the textile industry good
for Bangladesh?
Answer: Until 2005, Bangladesh’s opportunities in the developed nations were governed by a
2. Economically, who benefits when retailers in Europe and the United States source textiles
from low-wage countries such as Bangladesh? Who might lose? Do the gains outweigh the
losses?
Answer: During the 2008-2009 global recession, Walmart and other retailers increased their
3. What are the causes of the weak safety record of the Bangladesh garment industry? Do
Western companies that import garments from Bangladesh bear any responsibility for what
happened at the Rana Plaza and other workplace accidents?
Answer: The move of Bangladesh to become a dominant player in the global textile industry in
4. Do you think the legally binding agreement signed by H&M, Zara, Tesco, and others will
make a difference? Does it go far enough? What else might be done?
Answer: Many students will probably suggest that the world’s largest apparel retailers need to
5. What do you think about Walt Disney’s decision not to purchase merchandise from
Bangladesh? Is this an appropriate way of dealing with the problem?
Answer: Student answers will vary. Disney is a high-profile global company that probably
6. What do you think of Walmart’s approach to this problem? Is the company doing enough?
What else could it do?
Answer: Its strategy to hire an outside auditor to inspect Bangladesh factories and publish the
Knights Apparel
1. The case states that higher wage rates at the Alta Gracia factory have raised the cost per item
by 20 percent. Can you see any way in which the philosophy with regard to pay and working
conditions at Alta Gracia might lower costs in the long run?
Answer: Wages at the Alta Gracia factory are roughly three and a half times what other workers
2. Do you think Joseph Bozich would have been able to try the Alta Gracia experiment if Knights
Apparel was a publicly traded enterprise?
Answer: Many students will probably agree that Bozich’s goal of creating a company like
3. What do you think might stand in the way of Alta Gracia becoming successful? What
strategies might Bozich adopt to minimize the risk of failure while still adhering to his high
ethical standards?
Answer: So far, Alta Gracia seems to be following a very successful strategy. The “fair labor”
4. Alta Gracia serves a niche market, colleges, where there is higher awareness of ethical issues
in apparel production. Do you think the strategy would work if the company tried to sell to the
mass market through retailers like Walmart?
Answer: Many students will probably suggest that the Alta Gracia approach would not work if
5. Is it ethical for apparel companies to move production around the world in pursuit of the
lowest possible labor costs, even if this means paying wages that are below a living wage? What
if the alternative is not to produce at all?
Answer: Many students will probably take a stand against companies that continually shift
6. To what extent does the Alta Gracia experiment suggest that good ethics are also good
business practice?
Answer: The publicity and support that the Alta Gracia experiment has generated is a clear
Japan’s Economic Malaise
1. In the 1980s Japan was viewed as one of the world’s most dynamic economies. Today it is
viewed as one of its most stagnant. Why has the Japanese economy stagnated?
Answer: Japan’s economy reached its high point in 1989 with companies gobbling up U.S.
assets, property prices soaring, and the Nikkei index reaching its all time high. However, when
2. What lessons does the history of Japan over the last 20 years hold for other nations? What
can countries do to avoid the kind of deflationary spiral that has gripped Japan?
Answer: Many students will probably note the similarities between the situation in Japan that
led to its economic collapse and continued malaise to the situation that led to the 2008-2009
3. What do you think would be required to get the Japanese economy moving again?
Answer: Despite very low interest rates and large investments in public infrastructure Japan’s
economy has continued to stagnate. Much of the population and especially younger people have
little expectation that things will change for the better. Students may suggest that the country
4. What are the implications of Japan’s economic stagnation for the benefits, costs, and risks of
doing business in this nation?
Answer: Japan’s economic malaise offers both opportunities and challenges for companies
interested in doing business in the country. On one hand money is cheap and wages are
5. As an international business, which economy would you rather invest in, that of Japan or that
of India? Explain your answer.
Answer: Responses to this question will differ by student. Some students will probably suggest
that despite some problems with laws governing business in India, the country’s long-term
potential makes it a more attractive destination for investment. Other students, however, might
Indonesia: The Next Asian Giant?
1. What political factors explain Indonesia’s relative sluggish economic performance when
compared to some of its Southeast Asian neighbors? What economic factors? Are these two
related?
Answer: Indonesia’s economic growth has been hampered for decades, first because of the
dictatorship of former President Suharto and the massive debts that were accumulated during his
2. Why do you think foreign firms exited Indonesia in the early 2000s? What are the implications
for the country? What is required to reverse this trend?
Answer: In the early 2000s Indonesia experienced a significant drop in foreign direct investment.
Most students will probably suggest that foreign companies pulled out of the country to avoid its
3. Why is corruption so endemic in Indonesia? What are its consequences?
Answer: Some students may link Indonesia’s corruption problems to the low salaries earned by
4. What are the risks facing foreign firms that do business in Indonesia? What is required to
reduce these risks?
Answer: Most students will probably agree that the biggest risks facing foreign investors in
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