Faculty of Business Studies Tutor Marked Assignment B325: Managing Across Organizational & Cultural Boundaries Spring 2013 – 14 Power and Collaboration “Walmart Warns Suppliers on Stricter Measures” [[BENTONVILLE, Ark. (AP) — Wal-Mart Stores Inc. has alerted its global suppliers that it will immediately drop them if they subcontract their work to factories that havent been authorized by the discounter. Wal-Marts stricter contracting rule, along with other changes to its policy, comes amid increasing calls for better safety oversight after a deadly fire at a Bangladesh factory that supplied clothing to Wal-Mart and other retailers. The fire in late November killed 112 workers at a factory owned by Tazreen Fashions Ltd. Wal-Mart has said the factory wasnt authorized to make its clothes. In a letter sent Tuesday to suppliers of its Wal-Mart stores as well as Sams Clubs in the U.S., Canada and the United Kingdom, the company says it will adopt a zero tolerance policy on subcontracting without the companys knowledge, effective March. 1. Previously, suppliers had three chances to rectify mistakes. Wal-Mart also said it plans to publish on its corporate website a list of factories that havent been authorized to manufacture goods for Wal-Mart. Also, starting June 1, suppliers must have an employee stationed in countries where they subcontract to ensure compliance, rather than relying on third-party agents. We want the right accountability and ownership to be in the hands of the suppliers, said Rajan Kamalanathan, Wal-Marts vice president of ethical sourcing, said in an interview with The Associated Press. We are placing our orders in good faith. Wal-Mart will hold a meeting for clothing suppliers from the U.S. and Canada on Thursday to explain the new policy changes. Kamalanathan said Wal-Mart is looking to create a fund that factories can use to improve safety, but that is still in discussion. However, he also said local governments and other suppliers and retailers have to do their part in boosting factory safety. Critics quickly dismissed Wal-Marts moves as inadequate and said that the retailer needs to do more. It shows that Wal-Mart is feeling a great deal of pressure in the wake of public scrutiny, said Scott Nova, executive director at Workers Rights Consortium, a labor-backed advocacy group. However, he noted the companys response isnt adequate unless Wal-Mart and others pay their suppliers more so they can cover the costs of repairs. The upfront commitment from brands and retailers is essential if we are going to see real change, Nova added. Novas group is one of several organizations trying to get retailers and brands to sign a first-of-its-kind contract that would govern fire-safety inspections at thousands of Bangladeshi factories making T-shirts, blazers, and other clothes Americans covet. The contract would call for companies to publicly report fire hazards at factories, pay factory owners more to make repairs and provide at least $500,000 over two years for the effort. They would also sign a legally binding agreement that would make them liable when theres a factory fire. PVH Corp., a New York City-based company that sells the Calvin Klein and Tommy Hilfiger brands, last March signed the agreement after a national TV news report that chronicled the dangerous conditions in one of its Bangladesh factories. However, PVH pledged to start the program only if at least three other major retailers sign on. So far, only one has: A German coffee chain named Tchibo that also sells clothes. Nova said that his organization is in discussion with other retailers. Wal-Mart says it has no plans to sign on to the contract. Brooke Buchanan, a Wal-Mart spokeswoman, says that the company can make a positive impact on our global supply chain by both by raising our own standards and by partnering with other stakeholders to improve the standards for workers across the industry. Nova also noted that Wal-Mart needs to disclose a list of all the suppliers it currently works with so they can be monitored by independent groups. It also needs to disclose the results of all its factory inspections. Richard Locke, head of political science at MIT and an expert in global supply chains, said that Wal-Mart also needs to re-evaluate its purchasing practices so its demands are not putting excessive pressure on factories to cut corners on safety. It also needs to provide better technical assistant training for factories so they can run their businesses better. Wal-Mart ranks second behind Swedish fast fashion retailer H&M in the number of clothing orders it places in Bangladesh. Before the fatal fire there, Wal-Mart had taken steps to address safety, such as mandating fire safety training for all levels of factory management. Building fires have led to more than 600 garment work deaths in Bangladesh since 2005, according to research by the advocacy group International Labor Rights Forum. ]] ADJUSTED FROM THE ARTICLE “WALMART WARNS SUPPLIERS ON STRICTER MEASURES” BY ANNE DÂINNOCENZIO OF THE ASSOCIATED PRESS, PUBLISHED JANUARY 22, 2013 8:50 PM THE ASSIGNEMENT Question 1 (400 words, 35 marks) Explain Wal Mart’s perspective(s) of power in dealing with its suppliers (15 marks). Elaborate on this explanation using evidence from the case study (20 marks). Question 2 (400 words, 35 marks) From your understanding of the case study, outline what Wal Mart’s source(s) of power are (15 marks). As suggested in the case study, elaborate on how Wal Mart might take advantage of its power source(s) in managing its supply chain (20 marks). Question 3 (350 words, 30 marks) Assume the role of a supplier whose business has been affected Wal Mart’s new policies. Outline the kinds of negotiation episodes expected of Wal Mart (15 marks). Explain how would you deal with these episodes and how would you go about negotiating with the giant retailer (15 marks). General instructions for students: Cut-off date: May 8th, 2014 TMA weight: 20% of total course grade. Course material: (Organizational Collaboration, Themes and Issues: Chapter 8) and (Managing to Collaborate, The Theory and Practice of Collaborative Advantage: Chapters 7 & 10) Format: The answer to each question should be shown clearly with the question number next to it. Failure to do so may result in deduction in presentation points of up to 4 marks. In addition, you are expected to write your answers in an essay format. However, you may use bulleted paragraphs, diagrams, tables, or any graphs to support your arguments. Failing to do so could result in the deduction of up to 4 marks from presentation marks. Plagiarism: It’s imperative that you write your answers using your own words. Plagiarism will be penalized depending on its severity and according to AOU plagiarism policy. Word count: your answers are expected to be within the specified word count. A 10% deviation from word count limit is acceptable. Not adhering to specified word count could result in the deduction of up to 4 marks of your word count marks. Referencing: You are expected to use the Harvard referencing style for in-text referencing and list of reference at the end. Failing to do so could result in the deduction of up to 5 marks of referencing marks. In addition, although text books assigned in the course may be used freely as references, you are required to use a minimum of 2 external sources. It is recommended that you use scholarly articles found in the E-library link at LMS. Failing to do so could result in the deduction of up to 4 marks of your referencing marks.
Posted on: Tue, 25 Mar 2014 18:18:35 +0000
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