Corporate Social Responsibility (CSR) practices in Ready-Made Garment (RMG) industry of Bangladesh: A study on supply chain sustainability
Corporate Social Responsibility (CSR) is one of the most hotly debated issues among the informed peoples of the developing world including Bangladesh. As many multinational businesses are digging their roots deeper into the third world economies than ever before, more voices are being raised questioning the social impact of these businesses. However, very small proportions of the established businesses, most of which are multinational corporations, in Bangladesh actively engage in CSR. Even though multinational corporations are a slight exception to the culture of reluctance in engaging in CSR, the indigenous businesses manage to show great resilience in evading their social responsibilities despite pressure from their foreign stakeholders. The Bangladeshi Ready-Made Garment (RMG) sector has come under pressure from the international commerce community as tragedies hit some of the big garment manufacturing complexes, namely Rana Plaza (Hoskins, 2015) and Tazrin fashion (Hammadi, 2012). The global outcry for the Bangladeshi RMG sector to conform to international safety standards resulted in huge expenditures in factory floor security and management which resulted in about a third of the smaller sub-contracting factories shutting down. This paper is aimed to shed light on the various aspects of CSR in the Ready-Made Garment (RMG) sector of Bangladesh and the factors aiding and hindering its widespread practice to ensure sustainable supply chain management.
Corporate Social Responsibility (CSR) is a concept that has just recently gained dominance as business stakeholders began to expect businesses to maintain a legal, moral, economic and socially enhanced relationship with the environment and communicates. Over the past several decades, corporate social responsibility (CSR) has grown from a narrow and often marginalized notion into a complex and multifaceted concept. However, despite how it is usually publicized, CSR is not about charitable work. It is essentially about something more fundamental: it speaks the truth about how companies assume no liability for their activities on the planet. The social contract implies some form of altruistic behavior- the converse of selfishness- whereas self-interest connotes selfishness (Carroll, 2010).
According to Cochran (2017), “CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their shareholders on a voluntary basis”. Corporate Social Responsibility assumes that the companies are socially conscious to discharge their social obligation for the well-being of the society (Imam, 2015). CSR is the continuing commitment by businesses to behave ethically and continue to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large (Monir, 2016). Social responsibility also requires a responsibility towards the future and future members of society. Therefore, it is important to recognize by a wide range of companies and in all segments of action, from SMEs to multinational organizations.
Supply Chain Sustainability (SCS) is a holistic view of supply chain processes and technologies that addresses the environmental, social and legal aspects of a supply chain’s components as well as their economic factors. SCS is based on the principle that socially responsible products and practices are not only good for the environment and community, they are also good for building positive brand awareness, lowering risk and improving long-term profitability (Rouse, 2017). A responsible supply chain allows corporations to differentiate themselves from their competitors (McWilliams and Siegel, 2015). Studies demonstrate that a responsible supply chain can positively affect the purchasing decisions of customers (Du, Bhattacharya and Sen, 2017). Corporate social responsibility (CSR) is increasingly being relied upon to qualify corporate ability achievements, and enhance reputation in the process (Becker-Olsen et al., 2016; Pirsch et al., 2017).
In a global context, stakeholders from different cultures and various geographical areas demand strategic consideration to develop a socially responsible business orientation (Caroll, 2014). Corporate social responsibility (CSR) activities have been used to address consumers’ social concerns, create a favorable corporate image, and develop a positive relationship with consumers and other stakeholders (Yoon et al, 2016). CSR-related issues can easily erode the firm’s legitimacy and destroy the brand franchise upon which market value is built. As a result, it is contended that the growing integration of strategy, brand management, and need for social responsibility moves CSR from being a minimal commitment or some social add-on to becoming a strategic necessity (Werther and Chandler, 2015).
CSR is still in its early days in Bangladesh but due to the economic dependence on the 1st world and a rapidly globalizing society, the very nature of what CSR meant in Bangladesh is transforming. Despite the multinational businesses still being the leaders, newer and more socially aware firms are finally taking up the responsibility to give back to their stakeholders in order to maintain a newer level of integrity and creating goodwill (Van. and Oldenziel, 2011). As Bangladesh Ready-Made Garment (RMG) industry is massively prominent in the export sector, monitoring its industrial operations and setting higher standards for itself is now paramount. Therefore, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the BGMEA University of Fashion & Technology (BUFT) are advocating and launching projects for businesses and the academy community to work together and to improve information and utilization of Corporate Social Responsibility (CSR). It will also lead to contemporary leadership that will promote adherence to international standards in maintaining workplace safety, involvement and equal pay for women and grows awareness for eco-friendly business practices (Ahmed and Hossain, 2017).
1.0 Research Problems
It is evident from the study by Belal (2015) that most of the CSR studies have been in the context of developed countries. Very few studies have been done on the CSR practices in the context of developing countries including Bangladesh, but it is argued that it is important to learn about the CSR practices in developing countries. The garment industry of Bangladesh has been the key export division and the main source of foreign exchange for the last 30 years. At present, the country generates about $8 billion worth of products each year by exporting garments. The industry provides employment to about 5 million workers, whereas 90% are women. In reality, trade union practices are not perceptible in RMG factories (Ahmed, 2017). In most cases, garment workers have no freedom in their factories to join unions (Parvez, 2017). From the daily financial express, it is evident that BEI (Bangladesh Enterprise Institute) January 2005 launched its CSR center, which has been organizing monthly roundtable discussions to promote CSR in Bangladesh. They designed the key stakeholders to enhance the understanding of CSR (Sobhan, 2016). According to Sobhan (2016) “in the context of Bangladesh, although a clear understanding about CSR may be absent, there is a volume of philanthropic activities and businesses are eager to adopt CSR practices”………………………..