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TEACHING NOTE:
AFTER RANA PLAZA
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This case illustrates the following themes and concepts discussed in the chapters listed:
Theme/Concept Chapter
Corporate social responsibility and citizenship 3
Globalization, “race to the bottom” 4
Government regulation of labor conditions 7
Employees, occupational safety and health 15
Suppliers and supply chain codes of conduct 17
Corporate reputation, brand image 19
Case Synopsis:
Around nine in the morning on April 24, 2013, Rana Plaza, an 8-story building in Savar,
Bangladesh, collapsed catastrophically in a hail of twisted concrete, steel, and sewing machinery.
At the time, more than three thousand garment workers were on duty in five separate factories,
located on the building’s third to eighth floors. 1,134 workers, most of them young women, were
killed, and more than 2,500 others were injured, many seriously. It was the worst industrial
disaster in the history of the garment industry. Several dozen U.S. and European retailers and
This teaching note will present two options for the instructor:
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Teaching note by Anne T. Lawrence.
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TEACHING TIP: WHERE TO USE THE CASE IN THE COURSE
This case may be used in conjunction with Chapter 17, Business and Its Suppliers, or as an
TEACHING TIP: MAKING THE CASE RELEVANT
One way to engage student interest immediately is to link the case to their experiences. The
instructor may open the case discussion with a slide show showing images of retail clothing
stores that students may be familiar with, such as H&M, Gap, Zara, Old Navy, JC Penney, and
Walmart (all of these source from Bangladesh). Students may be asked to indicate, through a
simple show of hands, who has shopped for garments at these various stores; most will have
shopped at some of these establishments. Students may then be asked to examine the tags in
their clothing—if they are able to do so without embarrassment—and see where they were made.
TEACHING TIP: VIDEOS
After exploring where students’ own clothing comes from, the instructor may shift the focus to
the conditions under which these items are manufactured by showing a video. CBS News
produced a two-part segment of “Reporter’s Notebook” in which reporter Holly Williams posed
as a buyer to tour Monde Apparels, a Bangladesh factory, with a hidden camera. She later
interviewed a mother and her underage daughter who both worked at the factory. The segments,
which were first aired on May 22 and 23, 2013, clearly show the use of child labor, blocked
emergency exits, and missing fire extinguishers.
The segments may be streamed from:
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COLUMN/ROW 1
COLUMN/ROW 2
COLUMN/ROW 3
POSSIBLE
RESPONSIBLE
PARTIES
WHY RESPONSIBLE?
POSSIBLE ACTIONS TO
REDUCE CHANGES OF
FUTURE OCCURRENCE
(PROBABILITY OF
EFFECTIVENESS)
Building owner, i.e.,
Sohel Rana
• Illegally obtained
construction permit
• Used poor quality
construction materials
• Built on unstable soils
• Used architectural design not
intended to for an industrial
building.
• Illegally added additional
floors
• Ignored inspector’s warning
• Rana could be criminally
prosecuted to deter others
(HIGH)
• Government could combat
corruption in the construction
industry (LOW)
• Government could establish
stronger building safety and
construction regulations and
inspection processes (LOW)
Factory
owners/managers, e.g.
New Wave Style, and
their representatives,
i.e., BGMEA
• Factory owners aware of the
cracks in the building and the
inspector’s warning
• Ordered their workers to go
to work, under threat of wage
loss despite the danger
• Did not provide a safe
workplace
• BGMEA failed to establish
or enforce industry-wide
safety standards
• Government could establish
stronger building safety and
construction regulations and
inspection processes (LOW)
• BGMEA could establish and
enforce industry-wide safety
standards (LOW)
Bangladeshi
government, i.e.,
Parliament, regulatory
bodies, police and
intelligence services
• Failed to enforce existing
building codes and laws
protecting worker health and
safety; fines low and
inspectorates understaffed
• Colluded with employers to
deny worker rights and
repress worker organization
• Government could strengthen
labor rights and raise the
minimum wage (MED)
• Government could establish
stronger building safety and
construction regulations and
inspection processes (LOW)
U.S./European
governments and their
agencies, e.g., U.S.
Department of State
• Encouraged brands and
retailers to source from
Bangladesh by adopting
trade rules that gave
preference to garment
• U.S. and Europe could suspend
trade privileges, or threaten to
do so, to put pressure on the
Bangladesh government to
strengthen worker rights and
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A review of column 3 will show that most options have a low or at best medium probability of
success. Further classroom discussion may highlight the following points:
• Sohel Rana will likely face criminal prosecution, but in the context of Bangladesh’s
highly corrupt political and commercial climate, incentives for others to make money by
building and renting slipshod factories will remain high.
exports from least-developed
nations
Bangladeshi
workers/advocates, e.g.,
BGWIF, BWSC
• Workers entered building
despite knowledge of danger
• Unions failed to organize and
bargain collectively in the
garment industry
• Workers and their unions and
NGO advocates could organize
to put pressure on employers
and their government for
stronger safety and worker
rights (LOW/MED)
Clothing buyers in the
U.S. and Europe
• Unaware of labor conditions
under which their garments
were made
• Failed to pressure brands for
ethical sourcing
• Exerted strong demand for
fast fashion
• Customers could demand
ethically-sourced garments
(LOW)
• Customers could demonstrate
willingness to pay more for
ethically-sourced garments
(LOW)
• Third-parties could provide
rating systems for customers to
use in evaluating product CSR
(MED)
Apparel retailers and
brands in the U.S. and
Europe, e.g., Walmart,
H&M, Loblaw, Inditex
• Imposed heavy pressure on
suppliers for low costs and
fast turnaround
• Did not maintain stable
relationships with suppliers
• Did not have complete
knowledge of where their
products were manufactured
• Did not address building fire
and safety in their codes of
conduct/audits
• Could adopt codes explicitly
addressing building fire and
structural safety (HIGH)
• Could hire their own building
inspectors (HIGH)
• Could build more stable
relationships with favored
suppliers (MED)
• Could pay for the cost of
worker safety, either directly
or through higher prices for
finished goods (MED)
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do not reward investment in infrastructure. And, in any event, factory managers often
rent, rather than own, their production facilities. They are therefore unlikely to take
unilateral action to improve safety. The BGMEA has shown no evidence of supporting
industry-wide building safety standards.
• Bangladeshi workers and their advocates are likely to continue to organize and advocate
for their rights, but face an extremely repressive environment that makes success
unlikely.
• Western retailers and apparel companies are the only parties in the case with the financial
resources and motivation (risk to their reputations and brands) to make significant
improvements in worker safety in Bangladesh.
4. Develop a typology of corporate strategies to prevent worker abuse by contractors in
complex supply chains (e.g., put political pressure on local governments to develop
stronger regulations; develop codes of conduct).
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TYPOLOGY OF STRATEGIC RESPONSES BY APPAREL RETAILERS/BRANDS
Do nothing; no change; accept risk
Withdraw from the situation; move production out of Bangladesh
Buy/build own factories and manage own production directly
Develop own code of conduct/building safety
use own auditors
subcontract audit function to third party
Crowdsource intelligence (e.g., LaborVoices)
Join other companies in common code/collective action
Voluntary participation
Compulsory, with legally enforceable obligations
Limits on cost obligations
Loans to suppliers
Grants to suppliers
Political action to pressure government to raise minimum wage, strength worker safety
rules
Undertake social welfare projects, e.g., worker training, housing, health care
The instructor should point out that these options are not necessarily mutually exclusive.
5. Under what conditions are different corporate strategies appropriate? Can you
predict why different companies might respond in different ways?
This question is speculative, as the case does not present direct evidence to enable students to
answer it. One way to prompt students to think about it is to ask: If you were a manager of an
apparel retailer, what information would you need before deciding how best to respond to the
collapse of Rana Plaza?
Factors that may influence which of the strategic responses listed in the typology that a company
might select include:
Students may then be asked how they would operationalize and collect data on these variables.
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TEACHING TIP: EVALUATING THE TYPOLOGY
In summarizing the epilogue to the case (see below), the instructor may wish to describe how
various companies responded to the events at Rana Plaza, and to map these responses against the
Teaching Option 2: Multi-Day Module
Day 1: Introduction to the Case
Assign the case as homework reading.
Run exercises: Where do you shop? Where were your clothes made? (See notes above.)
Show the video or videos. (See notes above.)
Introduce the case assignments.
Day 2: Stakeholder Reports
On Day 2, student teams are each given 7 to 10 minutes to present 3 to 5 PowerPoint slides
responding to the following questions:
1. Briefly introduce your assigned stakeholder to the class.
2. In what way, if at all, did your assigned stakeholder contribute to, or bear
responsibility for, the collapse of Rana Plaza?
3. What could your stakeholder do now, after the Rana Plaza collapse, to reduce the
chances of a similar tragedy occurring in the future?
4. What are the constraints on your stakeholder that might make it difficult to take
these recommended actions?
The stakeholders assigned will depend on the number of students in the class. They may include
the following (note that companies are not included; they are covered the following class
session):
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broken into two groups)
NGOs in developed countries (e.g., Clean Clothes Campaign, SOMO, International Labor Rights
Forum)
TEACHING TIP: TIMING
The timing will need to be adjusted, depending on the number of students in the class. For
TEACHING TIP: HELPING WITH THE RESEARCH
The student exercises described here will require research above and beyond reading the case.
That is, the written case is intended to provide a conceptual overview of the issue, but contains
TEACHING TIP: PRE-LOADING THE SLIDES
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Day 3: Company Reports
On Day 3, student teams are each be given 7 to 10 minutes to present 3 to 5 PowerPoint slides
responding to the following prompt:
You are a member of a cross-functional team, with representatives of purchasing, social
responsibility, compliance, finance, and supply chain management, established by your company
in response to the tragedy at Rana Plaza. Your CEO has expressed personal shock over the
events at Rana Plaza and has asked your team to prepare a presentation addressing the following
questions:
1. What is our involvement in Bangladesh? To what extent do we source our products
there, and from what suppliers? Did we have any exposure at Rana Plaza?
2. What actions do you recommend that the company take now, to assure that our
products are not produced in facilities in Bangladesh where workers are at risk for
death or injury in factory fires or structural failures?
3. What are the constraints on putting these recommendations into effect?
The companies assigned will depend on the number of students in the class. They may include
the following:
Walmart Stores
Loblaw Industries
Carrefour SA
Hennes & Mauritz (H&M)
Inditex
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TEACHING TIP: WRITTEN ASSIGNMENT
As a follow-up written assignment or take-home final exam, students may be asked to write an
Who bears responsibility for working conditions in Bangladesh’s garment industry? Please
consider the responsibility of the following groups: U.S. and European retailers and brands;
clothing buyers; the owners and managers of supplier factories; the governments of Bangladesh,
the United States, and European nations; Bangladeshi workers and their organizations; and
activist non-governmental organizations. What do you think should be done to improve
Day 4: Theory-building Exercise
This segment is designed for more advanced students, e.g., honors upper-division undergraduates
or graduate students. Instructions: ask students to work in teams to answer the following
questions, and then to turn in a written response OR write their responses on the board or butcher
paper affixed to the classroom walls.
2. Under what conditions are different strategies appropriate? Can we explain why
different companies responded in different ways?
3. What kinds of data would we need to test these hypotheses?
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Epilogue:
The collapse of Rana Plaza intensified scrutiny of the Bangladesh garment industry and
mobilized many retailers and brands, as well as governments and stakeholders, to take action to
assure the safety of its workers.
Accord on Fire and Building Safety in Bangladesh: Soon after the collapse, a group of
mostly European retailers began intensive discussions with labor unions and representatives of
global NGOs active in the anti-sweatshop movement to craft a collective response to the tragedy.
Signatory companies agreed to hire an international team of fire and building safety
inspectors to carry out inspections of major suppliers. If factories were found to be unsafe,
corrective actions would be required. If inspectors found an imminent threat, they were to tell the
factory to stop operations during investigation and repairs. The pact required companies to
“negotiate commercial terms” which would “ensure that it is financially feasible for the factories
to maintain safe workplaces and to comply with upgrade and remediation requirements instituted
Seventy retailers and apparel brands signed the accord, including Loblaw, H&M,
Carrefour, Inditex, Marks & Spencer, PVH, Abercrombie & Fitch, Esprit, El Corte Ingles,
Benetton, and Mango. Most participating companies were European (Loblaw, Abercrombie &
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“Clothiers Act to Inspect Bangladeshi Factories,” New York Times, July 7, 2013.
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Alliance for Bangladesh Worker Safety. As momentum grew behind the initiative that
resulted in the accord, a number of U.S. companies balked, expressing concern in particular with
the clause requiring third-party arbitration of prices and with possible litigation risk. Walmart,
Gap, Target and several other U.S. firms backed an alternative agreement, negotiated with the
assistance of former U.S. Senators George J. Mitchell and Olympia J. Snowe. Known as the
Walmart also took unilateral action, announcing it would hire an external auditor, Bureau
Veritas, to inspect some 279 supplier factories in Bangladesh. A spokesperson said that Walmart
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In other developments:
• On April 28, 2013, Sohel Rana was arrested as he was trying to flee across the border to
• In May 2013, the Disney Company instructed all its licensees and vendors to halt
production in Bangladesh.
• In June 2013, the Obama administration suspended trade privileges with Bangladesh,
• In July 2013, the Bangladeshi government amended its labor law, dropping the
requirement that the government give factory owners a list of the workers who wanted to
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Appendix A:
SPECIAL TOPIC:
LABOR CONDITIONS IN THE BANGLADESH GARMENT INDUSTRY
TEAM PROJECT ASSIGNMENT INSTRUCTIONS
This semester, you will be asked to complete a team project in conjunction with a special project
on a current public issue: labor conditions in the Bangladesh garment industry. We will examine
the horrendous safety conditions in this industry and consider how these conditions can be
Calendar
[Date]: Instructions for team project and team assignments will be distributed in class. Teams
will have an opportunity to meet during class time to begin planning for the assignment.
[Date]: Teams will be provided with class time to meet and work on your presentations.
Instructions for your Class Presentations
[Date]: Stakeholders/governments:
In a 6 minute presentation, using 3 to 6 slides, please answer the following questions:
1) What is your stakeholder/government? Please tell us who you are.
2) Why is this stakeholder/government interested in labor conditions in the Bangladeshi
garment industry?
3) What is this stakeholder/government’s position on what should be done (if anything) to
improve labor conditions in the Bangladeshi garment industry?
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[Date]: Companies/trade associations:
In your 6 minute presentation, using 3 to 6 slides, please answer the following questions:
1) What is your company/trade association? Please tell us who you are.
suppliers? Did your company have exposure to Rana Plaza?
3) What is this company/trade association’s position on what should be done (if anything) to
improve labor conditions in the Bangladeshi garment industry? What are the constraints
on doing this?
