Prevention of Human Rights Abuse

Ausfurs in Argentina Human Rights DilemmaGroupmates:Choo Yih LinKerk Ser LeeLee Ji Yun, Amy

About AusfurAustralian Sheepskin companyFocusing on production in international market

ArgentinaCheap labor costLimited understanding of democratic processworkers rightsprinciple of human rights

Potential advantage of US market from Argentina compared to AustraliaCostManufacturing cost advantage Loosen labor law and lack of understanding of workers rightsGeographic location

What is Sweatshop and what are the working conditions?Sweatshops : a subcontracting system where the middleman earned a profit from the marginLabor wagesWorking hourWorking conditionsDangerous condition e.g. blocked fire exits, unsanitary bathrooms, poor ventilation

How widespread is the exploitation of labor in the textile industry?Top of pyramid dictate by controlling the contract price

Big retailercontractorworkersSocial responsibility of small to medium-sized firm such as Ausfurs, operating in a Third World countryThis question involves identifying the appropriate moral paradigm that fits in with the companys overall strategy and determining how this influences ethical behavior.

Moral Paradigms : Avoidance : Sole responsibility is to make profit.Ethical Relativism : Treat workers in a manner that is expected and enforced by local employers and employees.Ethnocentric approach : Compensate workers to ensure their living standards are reasonable.Moral Universalism : Working conditions and living standards of the employees are directly under their control.Ausfurs adopts ethnocentric approach. Application of Moral Paradigm from Ausfurs to ArgentinaEthnocentric approach: The company applies the morality used in its home country, regardless of the host countrys system of ethics.

Variation of stakeholder and shareholder expectationsCorporate greed : They are looking for subcontractors instead of manufacturing their own products.International policies : Government creates international trade law and lending policies.The hunt for the lowest price : Retail giants put pressure on suppliers. The muddle in the middle : The number of middle-men has increased. Squeezed at the bottom : The employees (laborers). Prevention of Human Rights AbuseImprove working environment, including its safety and sanitary.Provide social security, include social insurance.Provide paid parental leave to workers with children.Provide periodic holidays with pay and reasonable limitation of working hours.Provide an adequate standard of living to workers who live in company hostel and continuously improving it.

Provide reasonable overtime payment to workers who worked over eight hours a day, 40-hours a week.Contract with trustworthy middleman and provide reasonable contract price.Send regulators to examine the condition of the workers periodically and verify whether the terms stated in above is carried out.Participate in the Fair Labor Association.Ausfurs vs. Nike

SimilaritiesFacing ethical issues of sweatshop problem.Workers are given low wage and do overtime.Poor and squalid working condition.Taking advantage of offshore production possibility and globalisation.Price competition with rival firms.DifferenceNike established a department focusing on improving lifestyle of the factorys workers while Ausfurs is still focusing on searching cheap labor.Nike is more sensitive to its own reputation and have plans to solve its sweatshop problem in comparison with Ausfurs attitude.ConclusionEthical reputation and image is very important to a company. Unethical production process of products will lead to rebellion or boycott of certain groups of consumers, causing loss of profit.Ausfurs should follow Nikes footsteps to rebuild their reputation and image in order to retain their market share in the wool garment market.