Worksheet 10: Business and Development
Case: Labor Rights in Global Value Chains (GVCs)
Group Number:
Group Member Names (Please only write the names of students who you discussed this
worksheet with)
Name:Pelumi Oluleye
Name:Ted Pounding
Name:Clay McKnight
Name: Shashank Singh Kumar
Name: Lily Davis
Reading Material:
● Niemi, Wayne. “The Next Chapter: How to Incorporate Labor Rights Needs” in
Footwear News, 60 (38), September 27, 2004.
I. Background
1. Please define the concept of “labor violations.” What do you think it entails?
Labor violations involve violations against a good workplace standard. This could include
many issues, such as, child labor, not paying overtime compensations, or an unsafe working
environment. Many labor institutions and company’s own inspectors try to enforce suitable
working conditions, however, violations can still be made especially abroad when the
corporations do not take initiatives to make commitments toward improving conditions.
2. Please contrast the old and new approaches deployed by footwear giants such as Nike,
Reebok and Adidas to address labor violations among their suppliers.
● Old
○ Reactive and not owning up to violations of labor
○ Defending to the media that Nike undergoes many audits than any other
company
○ Monitoring and policing problems instead of long term solutions
● New
○ Welcoming the concerns when it comes to labor violations
○ Helping factories prioritize compliance issues
○ Evaluating audits and effectiveness of remediation plans
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○ Adidas: working with factory management by conducting onsite education
programs
○ New Balance: added management training to its educational programs
○ Puma: joined Fair Labor Association
■ partnered with Hong Kong Christian Industrial Committee to develop
and conduct training issues on health, safety, and labor issues
○ Reebok: getting workers more involved in compliance issues
3. What were some of the problems associated with the old approach?
Although standards were put in place for the factories, they were not enforced well enough
for them to be effective. As a result, the labor conditions of the workers never met the
standards and remained unsuitable for a long time. Even with the audits and inspections,
companies decided to merely police these problems by case instead of implementing real
solutions to improve labor conditions.
4. What are some of the criticisms leveled at the new “management/culture-focused”
approach?
The companies are working to change the attitudes among factory managers, however
violations still continue to occur. This is even with the watch of international labor groups.
In one of Nike’s factories, women are required to take pregnancy tests as part of the hiring
process. Instead of change happening at micro-levels in each company, footwear
manufacturers as a whole need to address labor violations all together. This way a
standard is developed.
II. Analysis
1. How might observers subscribing to the following perspectives view the new approach
deployed by the footwear giants to address labor violations? How do you think they
would assess this approach? Please explain
a. Marxist/Dependency
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● Would encourage the companies to leave so that the developing countries do not
undergo extraction
● May appreciate the new improvements so that workers are taken care of and not
violated
b. Mercantile
●
c. International Business
2. Which of these three perspectives (i.e. Marxist, Mercantile, International Business)…
a. Is most clearly reflected in Niemi’s article? Please explain.
b. Do you think is most compelling? Please explain.
c. Now discuss your views with your group. What were some of the commonalities
across group members’ views? What were some of the key differences? Did you
change your position as a result of the discussion?
3. To what extent might the new approach deployed by the footwear giants to address
labor violations prove consistent with the concept of upgrading, as discussed in lecture?
Please explain.
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