Business Note
Business Note
Submitted By:
Jony Miah
ID: Be-022
MBA 16th Batch
Department of International Business
University of Dhaka.
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Table of Contents
1. Introduction.................................................................................................................................1
1.1 Purpose of the Study..................................................................................................................2
2. Literature Review........................................................................................................................3
3. Case Study: Bangladesh Factory Safety Issues.........................................................................5
3.1 Historical Context......................................................................................................................5
3.2 Current Safety Challenges........................................................................................................6
3.3 Pressure Points for Bangladesh................................................................................................7
4. BATNA and WATNA Analysis..................................................................................................10
4.1 Best Alternative to a Negotiated Agreement (BATNA):........................................................10
4.2 Worst Alternative to a Negotiated Agreement (WATNA):....................................................10
4.3 Implications of BATNA and WATNA for Negotiations:........................................................11
5. Type of Negotiation Situation....................................................................................................12
6. Power Dynamics........................................................................................................................14
6.1 Evaluation of Power:...............................................................................................................14
6.2 Capitalizing on Power Sources:..............................................................................................15
7. Negotiation strategy for Bangladesh........................................................................................16
8. Conclusion..................................................................................................................................18
9. References..................................................................................................................................19
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1. Introduction
The garment industry in Bangladesh stands as a cornerstone of the nation’s economy,
representing a substantial portion of its gross domestic product (GDP) and providing
employment to millions. Over the past few decades, Bangladesh has emerged as one of the
leading exporters of ready-made garments (RMG), with its low production costs and vast,
skilled workforce attracting major international brands. (Rahman, 2022) This sector's rapid
growth has played a pivotal role in driving economic development and reducing poverty in
the country. However, this remarkable progress has come at a significant cost, particularly in
terms of worker safety and working conditions. (Rahman, 2022)
The issue of factory safety in Bangladesh catapulted to global attention following the tragic
collapse of the Rana Plaza building in 2013. This disaster, which claimed the lives of over
1,100 workers and injured thousands more, starkly highlighted the perilous working
conditions that many Bangladeshi garment workers endure. The collapse was a result of
structural failures in a building that housed several garment factories producing goods for
international retailers. (Worker-Driven Social Responsibility Network, 2023) This incident
was not isolated; it was preceded by other fatal incidents, including the Tazreen Fashion
factory fire in 2012, which killed more than 100 workers. These events underscored systemic
issues within the industry, including poor building construction, inadequate safety protocols,
and lax regulatory enforcement. (Worker-Driven Social Responsibility Network, 2023)
In response to these tragedies, there was a concerted global outcry from labor rights
organizations, consumers, and international stakeholders, leading to the establishment of
several factory-safety agreements. Two significant initiatives emerged: the Accord on Fire
and Building Safety in Bangladesh (the Accord) and the Alliance for Bangladesh Worker
Safety (the Alliance). (Bioxigeno, 2024) Both agreements aimed to improve safety standards
in the Bangladeshi garment industry through inspections, remediation, and worker training
programs. The Accord, a legally binding agreement between global brands, retailers, and
trade unions, and the Alliance, a more voluntary commitment by North American retailers,
collectively sought to ensure safer working conditions for millions of workers. (Bioxigeno,
2024)
Despite these efforts, challenges remain pervasive. The financial burden of upgrading factory
infrastructure and maintaining safety standards poses a significant challenge, particularly for
smaller factories with limited resources. Furthermore, the enforcement of safety regulations is
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often hindered by corruption and bureaucratic inefficiencies. As Bangladesh continues to
navigate these complexities, it becomes increasingly clear that developing robust negotiation
skills is crucial for the country. Effective negotiation can help balance the diverse interests of
stakeholders, secure necessary support from international partners, and foster sustainable
improvements in factory safety.
This paper will examine the historical and current safety issues facing Bangladesh's garment
industry, identifying key pressure points and alternative negotiation scenarios. It will explore
the power dynamics at play between international brands and Bangladesh, highlighting
potential sources of leverage for the latter. Additionally, the paper will outline negotiation
strategies grounded in established theories and principles, offering actionable insights to
guide Bangladesh towards sustainable solutions that prioritize both worker safety and
economic prosperity. Through these efforts, the paper endeavours to underscore the pivotal
role of negotiation skills in driving positive change within Bangladesh's garment industry.
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2. Literature Review
The garment industry in Bangladesh has emerged as a significant contributor to the country's
economy, playing a pivotal role in driving economic growth and providing employment
opportunities to millions of workers. However, alongside its rapid expansion, the industry has
been plagued by persistent safety challenges, raising concerns about the well-being of
Bangladeshi garment workers and the sustainability of the sector. This literature review
explores key themes and findings from scholarly research and publications related to factory
safety issues in Bangladesh's garment industry, focusing on historical context, regulatory
frameworks, and negotiation strategies.
Historical Context
Regulatory Frameworks
The regulatory landscape governing factory safety in Bangladesh's garment industry has
evolved in response to mounting pressure from both domestic and international stakeholders.
Following the Rana Plaza collapse, significant efforts were made to strengthen regulatory
oversight and enhance safety standards within the industry. The establishment of initiatives
such as the Accord on Fire and Building Safety in Bangladesh and the Alliance for
Bangladesh Worker Safety marked important milestones in these endeavors (ILO, 2015).
These initiatives aimed to improve safety standards through inspections, remediation, and
worker training programs, emphasizing the importance of collaboration between global
brands, local manufacturers, and labor organizations. However, challenges persist in the
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effective implementation and enforcement of safety regulations, highlighting the need for
sustained commitment and accountability from all stakeholders (Ahmed, 2018).
Negotiation Strategies:
Negotiation skills have emerged as a crucial determinant in addressing factory safety issues
within Bangladesh's garment industry. Scholars have emphasized the importance of adopting
proactive negotiation strategies that balance the diverse interests of stakeholders while
prioritizing worker safety and well-being. Coalition building, transparency, and
accountability have been identified as key principles guiding effective negotiation approaches
(Islam & Hassan, 2019). By leveraging economic and regulatory power, Bangladesh can
strengthen its negotiating position and drive meaningful progress in securing agreements that
prioritize factory safety improvements. Integrative negotiation approaches, emphasizing
shared interests and mutual benefits, have been advocated as essential for fostering
sustainable solutions and building constructive partnerships with international stakeholders
(Ahmed & Hossain, 2020).
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3. Case Study: Bangladesh Factory Safety Issues
3.1 Historical Context
The garment industry in Bangladesh has long been a cornerstone of the country's economy,
experiencing rapid expansion since the 1980s. The sector's growth was fueled by factors such
as low labor costs, favorable trade agreements, and a large, predominantly female workforce.
However, this growth was accompanied by significant challenges, particularly concerning
workplace safety and labor rights. (Uddin, 2018)
One of the most notable incidents highlighting the dangers of working conditions in
Bangladeshi garment factories occurred on April 24, 2013, with the collapse of the Rana
Plaza building in Dhaka. The eight-story complex housed multiple garment factories, shops,
and a bank. (Biswas, 2023) Tragically, it crumbled to the ground, claiming the lives of over
1,100 workers and injuring thousands more. The collapse was attributed to structural failures
caused by the illegal addition of upper floors and the heavy machinery installed by garment
factory owners, despite warnings of structural instability. The Rana Plaza disaster remains
one of the deadliest industrial accidents in history, prompting global outrage and calls for
immediate action to improve factory safety standards in Bangladesh. (Biswas, 2023)
The Rana Plaza collapse served as a wake-up call for Bangladesh and the global community,
sparking widespread protests, international scrutiny, and demands for accountability. It
prompted the establishment of various initiatives aimed at improving factory safety standards
and ensuring worker protection., and labour rights protection. (Biswas, 2023)
Prior to the Rana Plaza collapse, the garment industry had already witnessed several other
deadly incidents, including factory fires and building collapses. For example, in November
2012, the Tazreen Fashion factory fire claimed the lives of more than 100 workers. These
tragedies underscored systemic issues within the industry, including inadequate building
infrastructure, lack of fire safety measures, and poor enforcement of labor regulations.
Despite widespread condemnation and promises of reform, these incidents continued to
occur, highlighting the persistent challenges in ensuring workplace safety for Bangladeshi
garment workers. Prior to the Tazreen Fashions fire, Bangladesh experienced the Siddeshwari
Sweater Factory fire in 2010. This incident claimed the lives of 25 workers and injured many
others. Similarly, in 2005, the Spectrum Sweater Factory fire led to the deaths of 64 workers.
These fires underscored the pervasive safety hazards present in Bangladeshi garment
factories, including overcrowding, poor electrical wiring, and insufficient fire suppression
systems.
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These tragic events serve as stark reminders of the urgent need for comprehensive reforms to
address safety deficiencies in Bangladesh's garment industry. Despite increasing international
scrutiny and calls for action, systemic challenges such as regulatory loopholes, inadequate
enforcement, and pressure to maintain low production costs continue to pose obstacles to
meaningful change. Recognizing the gravity of these issues is crucial for informing effective
negotiation strategies aimed at achieving sustainable improvements in factory safety
standards and protecting the rights and well-being of Bangladeshi garment workers.
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iii. Financial Burden of Safety Measures: The financial burden associated with
implementing and maintaining safety measures poses a significant challenge for many
garment factories in Bangladesh, particularly smaller suppliers with limited resources.
This challenge is evidenced by instances where cost considerations have overridden
safety concerns, perpetuating unsafe working conditions. For example, reports
indicate that many smaller factories struggle to afford necessary safety upgrades,
leading to compromises in safety standards to minimize expenses, as observed in
various incidents of factory fires and collapses. (CPD_Sarwar, 2022)
iv. Worker Rights and Safety Concerns: Worker rights and safety concerns represent
critical issues within Bangladesh's garment industry, with reports of worker
exploitation, harassment, and abuse persisting despite regulatory efforts. Instances of
worker exploitation, including verbal harassment and physical abuse, continue to
plague many factories, perpetuating a culture of fear and intimidation that deters
workers from reporting safety violations or seeking recourse for workplace
grievances. These concerns underscore the urgent need for comprehensive reforms to
protect the rights and dignity of garment workers. (Consortium, 2024)
v. Challenges within Global Supply Chains: Challenges within global supply chains
present additional complexities in ensuring workplace safety within Bangladesh's
garment industry. Varying commitments from international brands to improve safety
standards in Bangladeshi factories contribute to disparate safety outcomes. While
some brands prioritize worker rights and safety, others prioritize cost considerations,
resulting in unsafe working conditions. These challenges highlight the need for
concerted efforts from all stakeholders to prioritize worker safety and well-being
within global supply chains. (Yadlapalli, 2024)
3.3 Pressure Points for Bangladesh
In navigating the challenges surrounding factory safety within Bangladesh's garment
industry, several pressure points emerge, reflecting the complex interplay of economic,
social, and regulatory factors. This section elucidates the primary pressure points for
Bangladesh, delineating the multifaceted dynamics that shape the country's approach to
addressing factory safety concerns.
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underscores the significance of factory safety issues within the sector. (Uddin,
2024) With the garment industry accounting for a substantial portion of the
country's GDP and employing millions of workers, any disruptions or reputational
damage stemming from safety lapses can have far-reaching economic
consequences. The Rana Plaza collapse in 2013 serves as a stark reminder of the
economic vulnerabilities inherent in Bangladesh's reliance on the garment
industry, as the tragedy precipitated international scrutiny and calls for improved
safety standards, threatening Bangladesh's trade relations and export earnings.
(Uddin, 2024)
ii. International Reputation and Trade Relations: The global perception of
Bangladesh's garment industry, shaped by incidents of factory fires, collapses, and
worker rights violations, exerts significant pressure on the country to address
safety concerns. (IndustriALL, 2023) Negative publicity resulting from safety
lapses tarnishes Bangladesh's international reputation and undermines its
competitiveness in the global market. Furthermore, safety-related trade restrictions
or sanctions imposed by importing countries can disrupt Bangladesh's export-
oriented economy, highlighting the imperative for the country to uphold
international safety standards and restore confidence among its trading partners
and consumers. (IndustriALL, 2023)
iii. Compliance Costs and Financial Constraints: The financial burden associated
with upgrading factory infrastructure and implementing safety measures presents
a formidable challenge for Bangladesh, particularly for smaller factories with
limited resources. Compliance costs, including investments in building
renovations, safety training programs, and equipment upgrades, strain the finances
of garment manufacturers, potentially jeopardizing their viability and
competitiveness in the global market. (Lomborg, 2016) Balancing the imperative
for safety improvements with the economic realities of the industry requires
innovative solutions and support mechanisms to alleviate the financial pressures
faced by garment factory owners while ensuring adherence to stringent safety
standards. (Lomborg, 2016)
iv. Worker Rights and Social Unrest: Worker rights violations and social unrest
resulting from safety concerns pose a significant pressure point for Bangladesh's
garment industry. (Amnesty International, 2024) Instances of worker exploitation,
unsafe working conditions, and labor rights violations fuel discontent among
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workers, leading to protests, strikes, and labor unrest. The government's ability to
address these grievances and maintain social stability hinges on its capacity to
enforce labor laws, protect worker rights, and uphold safety standards within the
garment industry. Failure to address these issues risks exacerbating social
tensions, undermining industrial harmony, and tarnishing Bangladesh's reputation
as a responsible global player in the garment trade. (Amnesty International, 2024)
v. Regulatory Enforcement and Governance: The effectiveness of regulatory
enforcement and governance mechanisms in ensuring compliance with safety
standards constitutes a critical pressure point for Bangladesh. Weak regulatory
oversight, bureaucratic inefficiencies, and corruption undermine the enforcement
of safety regulations, allowing safety violations to persist unchecked.
Strengthening regulatory capacity, enhancing transparency, and combating
corruption are imperative for bolstering confidence in Bangladesh's commitment
to improving factory safety and fostering a conducive environment for sustainable
growth and development within the garment industry. (Nabiha Chowdhury, 2012)
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4.1 Best Alternative to a Negotiated Agreement (BATNA):
For Bangladesh:
Example: Following the Rana Plaza collapse, Bangladesh initiated the National Tripartite
Plan of Action on Fire Safety and Structural Integrity in the Ready-Made Garment Sector,
demonstrating its commitment to improving safety standards through domestic initiatives.
The BATNA for international brands involves sourcing garments from alternative countries
with better safety records and regulatory environments, thereby mitigating reputational risks
and legal liabilities associated with Bangladeshi factories. (Lu, 2023)
For Bangladesh:
Bangladesh's WATNA entails a scenario where international brands disengage from the
country's garment industry entirely, either due to persistent safety concerns, reputational
damage, or regulatory pressures. This would result in significant economic ramifications,
including job losses, factory closures, and a downturn in export revenues. (Evans, 2024)
Example: In the aftermath of the Rana Plaza collapse, there were concerns that international
brands might pull out of Bangladesh, prompting the government and industry stakeholders to
undertake remediation efforts to avert such a scenario.
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The WATNA for international brands involves continued association with Bangladeshi
factories plagued by safety issues, leading to ongoing reputational damage, legal liabilities,
and potential consumer backlash. (Garments, 2024)
Example: International brands faced public backlash and boycott threats following incidents
such as the Tazreen Fashions fire and Rana Plaza collapse, highlighting the reputational risks
associated with sourcing from factories with poor safety records.
4.3 Implications of BATNA and WATNA for Negotiations:
The BATNA and WATNA analysis illuminates the incentives and constraints shaping the
negotiation dynamics between Bangladesh and international stakeholders. For Bangladesh,
the prospect of losing international market access and facing economic repercussions
underscores the urgency of engaging in meaningful negotiations to address factory safety
concerns. Conversely, international brands are incentivized to collaborate with Bangladesh to
uphold safety standards and mitigate risks to their brand reputation and market share.
Recognizing the respective BATNAs and WATNAs of all parties is essential for crafting
mutually beneficial agreements that advance safety objectives while safeguarding economic
interests and preserving long-term partnerships within the global garment industry.
(Bangladesh Garment Industry Statistics, Trends & Analysis – Dekko ISHO Group, 2021)
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limited resources, such as financial investments in safety upgrades or liability for
compliance costs. (Shonk, 2024)
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6. Power Dynamics
In the negotiation landscape surrounding factory safety issues within Bangladesh's garment
industry, both Bangladesh and international stakeholders possess sources of power that
influence the dynamics of the negotiation process.
Bangladesh's Power:
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International Stakeholders' Power:
Market Influence: International brands wield substantial market influence and
purchasing power, enabling them to dictate sourcing decisions and influence supplier
behaviour.
Reputational Risks: Brands face reputational risks associated with sourcing from
factories with poor safety records, motivating them to prioritize safety improvements
to safeguard their brand image.
6.1 Evaluation of Power:
While both Bangladesh and international stakeholders possess sources of power, the
evaluation of relative power depends on various factors, including economic dependencies,
regulatory oversight, and reputational considerations.
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By strategically leveraging its economic and regulatory power, Bangladesh can strengthen its
negotiating position and drive meaningful progress in securing agreements that prioritize
factory safety improvements while preserving the economic viability of its garment industry.
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monitoring, and regular audits to ensure compliance with safety standards and hold
stakeholders accountable for their commitments. (Saif, 2023)
Balanced Cost-sharing Agreements: Bangladesh should negotiate balanced cost-
sharing agreements with international brands to finance safety improvements in
garment factories. By distributing costs equitably based on each party's contribution
and capacity, Bangladesh can alleviate financial burdens on factory owners while
ensuring the commitment of international stakeholders to invest in safety initiatives.
(Morse, 2023)
Long-term Capacity-building Initiatives: Prioritizing long-term capacity-building
initiatives is essential for fostering sustainable improvements in factory safety
standards. Bangladesh should negotiate with international stakeholders to invest in
training programs, technology upgrades, and infrastructure enhancements that
empower workers, enhance regulatory compliance, and mitigate safety risks
proactively. (Fauzia, 2022)
Adaptive Negotiation: Flexibility and adaptability are key to navigating the
evolving dynamics of safety negotiations effectively. Bangladesh should adopt an
adaptive negotiation approach, continuously assessing the changing needs and
priorities of stakeholders, adjusting strategies accordingly, and seizing opportunities
for consensus-building and collaboration. (Islam and Molla, 2022)
Emphasize Shared Interests: Bangladesh should emphasize shared interests and
mutual benefits in negotiations, highlighting the importance of ensuring worker
safety, protecting brand reputation, and fostering sustainable economic development.
By framing safety improvements as a win-win proposition, Bangladesh can align
incentives and build consensus among stakeholders. (Report, 2022)
Utilize Diplomatic Channels: Bangladesh should leverage diplomatic channels and
international forums to advocate for global standards in factory safety and garner
support for its initiatives. Engaging with multilateral organizations, trade unions, and
advocacy groups can amplify Bangladesh's voice on the global stage and mobilize
collective action towards achieving common goals. (Safety program established six
years ago in Bangladesh has saved lives and stopped retaliation across hundreds of
factories, 2023)
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8. Conclusion
The garment industry in Bangladesh has long been a cornerstone of the nation's economy,
contributing significantly to economic growth and providing employment opportunities to
millions. However, persistent safety challenges within the industry, exemplified by tragic
incidents such as the Rana Plaza collapse and the Tazreen Fashions fire, have highlighted the
urgent need for comprehensive reforms. These events underscore the critical importance of
addressing systemic deficiencies in factory safety standards to protect the rights and well-
being of Bangladeshi garment workers.
Negotiation skills have emerged as a crucial tool for Bangladesh in navigating the
complexities of addressing factory safety issues effectively. Through coalition building,
transparency, and strategic negotiation approaches, Bangladesh can advocate for its interests,
secure meaningful agreements with international stakeholders, and drive sustainable
improvements in factory safety standards. By capitalizing on its economic and regulatory
power, Bangladesh can strengthen its negotiating position and forge partnerships that
prioritize both worker safety and economic prosperity.
By recognizing the importance of negotiation skills and leveraging its strengths effectively,
Bangladesh can pave the way for a safer and more sustainable future for its garment industry.
Through collaborative efforts and proactive engagement with international stakeholders,
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Bangladesh can overcome the challenges posed by factory safety issues and uphold its
commitment to ensuring the well-being of its garment workers.
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