Socially Responsible Globalization

Here is the speech I gave on the topic:

On 24^th April this year, an eight-story building collapsed in Bangladesh. The building housed many garment factories. Over one thousand people died and over two thousand were injured. It is regarded as one of the deadliest accidents in modern history. Could it have been prevented?

Good morning friends, today I am going to speak on Socially Responsible Globalization. Firstly, I will speak on globalization and it’s advantages. Then, I will talk about some challenges before globalization, and, finally I will talk about the need for social responsibility.

Globalization has led to interconnected world, interconnected economies. It promotes efficiency in production and promotes economic growth. Consumers get the maximum benefits. It is said, that globalization is like a rising tide, which lifts all boats. Globalization has created lot of jobs in various poor countries, lifting millions out of poverty.

There are many challenges for globalization. For most multinational companies the aim is to maximize shareholder value, and maximize profits. Many companies outsource their production to poorer countries where the cost of labor is considerably less. In most cases, they claim that the local factories are responsible for any accident that may take place. There is a lot of competition and in the process of cost cutting, the factories compromise on working conditions and also pay less. There has been a considerable progress in making companies accountable for adhering to environmental standards, but there has been limited progress in addressing social issues, human rights, transparency and corruption.

Accidents such as the Rana Plaza in Bangladesh, or the suicides in Foxconn factory in China, or any poor working condition in sweatshops lead to an instant public outcry. The company concerned looses some credibility, and image. Therefore, now, there is a need for socially responsible globalization, wherein the stakeholders are important and not only the shareholders.

Consumer demands and preferences have already made many companies more aware, more socially responsible.  Starbucks claims to sell responsibly grown and ethically traded coffee. Nike, which was once associated with bad labor practices, has turned its image around. It was one of the first in industry to publish a list of factories that it has contacts with. It publishes a report on the working conditions and pay in its factories acknowledging various issues.

Many people claim that sweatshop factories should be closed. Many argue that these factories are perhaps the best alternative available to those people. The factories cannot be closed, however the working conditions can surely be improved. Globalization should lead to creation of regulatory frameworks across nations. Companies should be incentivized to be socially responsible.  This combined with consumer activism and initiatives taken by multinational companies will help in preventing accidents such as the Rana Plaza in future.

Every company needs to be socially responsible, for its own benefit and for the benefit of the society. It is a win-win proposition.