Georgi Boyanov
ID: 100038228
SES 360a: Cross-Cultural Management
Prof. Stefanovich
February 4th, 2015
Homework #2
The following is a story about a distant cousin of mine. Ever since the 1950s, Dupnitsa
(just 30 km north of Blagoevgrad) has been a town associated with the textile industry. During
the Communist reign of Bulgaria, several different plants and factories were established in the
town, designated to cover all aspects of the manufacturing process of clothes, from creating
textile to its application in suits, dresses, and even shoes. Business was booming and Dupnitsa
quickly became one of the largest producers and exporters of textile goods on the Balkans.
Since the majority of these businesses were state owned, the fall of the Communist regime in
Bulgaria left Dupnitsa in a rather peculiar situation. The factories themselves were privatized, of
course, and before them was a very awkward dilemma. They could either commit themselves to
the newly “discovered” Western world, with all its fashion trends and demands, or they could
go out of business and close permanently, leaving hundreds of people without a source of
income.
Some of the businesses closed and their buildings are now used for other purposes. But
others decided to continue on, adapting and securing clientele like Emporio Armani, Hugo Boss,
and other globally known clothing brands. The main competitive advantage of these factories
was the cheap labor (hence, low production costs), which was extremely appealing to the large
brands. The minimized cost, along with the location of Dupnitsa on the Balkans and in Europe
meant that the town’s textile and clothing business would thrive again. Here is where my
distant cousin comes in. Back in the day, his mother was in charge of one of the factories that
produced clothes. Not very impressive, I have to admit. But she was also in charge of the labor
union that was created back in the day, composed of all the workers and laborers from the
industry. This meant that she had a lot of connections. While she did not go into the mass
privatization in the early 1990s, she did have another idea. Along with her son, they opened a
small clothing store in their own house. She had the contacts from all the factories and various
businesses, and could secure a steady stream of high end clothes at production costs. The rest,
as they say, is history. They continue to operate to this day and are extremely successful. Their
business is on the underground side, but it provides its clients with jeans, for example, that
would retail for 250 euros in the rest of the world for the small price of 100 leva. Is this fair?
I think it is. Especially when compared to the way those same pairs of jeans are
manufactured in China. I was shocked and appalled when I saw the documentary during our
class. I am positive that every person living in today’s society is aware, to some extent, of the
horrid working conditions in China, the minimum pay workers receive, and the brutal, almost
slave trade, way in which those factories are run. But seeing all this visualized by a strong
documentary really caught me by surprise. For better or worse, we live in a world that is totally
consumer driven. In terms of running a business, companies would always seek to lower
production costs and maximize profits. This must not be the case, though. We, as consumers,
need to change the status quo. Easier said than done, right? Especially in China. In order to gain
competitive advantage as the world’s largest producer of whatever, the Chinese government is
happy with this status quo. They need it, for a multitude of reasons. And as long as we, as
consumers, tolerate this, the Chinese people will continue to be overworked and underpaid.
I do not think that it’s worth the price to starve and impose a new, shiny form of slavery
on your people. The people currently working in the clothing business in Dupnitsa make decent
wages, they wear nice clothes produced by themselves, clothes that would cost times more if
bought in the United States. They are not overworked, and for the most part, seem to be happy.
They raise families and go on vacation, they live in their own homes and can afford to drive to
work. Are they better than the people manufacturing the same clothes in China? I do not think
so. More lucky then? Possibly. As tempting it is to end this commentary with luck, I cannot. But I
will say this: it really sucks that geopolitics is making people treat other people differently, and
this, unfortunately, will never change.