RP Business

A company that I have examined is Zara. I find them to be very interesting because they have built a very solid reputation as a company in fast fashion that is the exception to globalization. But this does not necessarily remain true today. Initially they were producing locally in Spain and Portugal. Today they have expanded their production to countries such as Bangladesh. By 2013 Zara’s parent company Inditex’s supply chain, was made up of 1,592 suppliers in 46 countries. While 51% of their production is located near headquarters in Spain, they still use 738 different suppliers in Asia alone.

Inditex’s annual report claims that they do social audits in order to verify their compliance with the Code of Conduct and to establish Corrective Action Plans intended to ensure that fundamental labor rights are respected. But how affective are these measures really? How extensive are these plans? Does Inditex verify that they are implemented entirely? I cannot imagine that they are too effective when we see tragedies such as the collapse of Rana Plaza in Bangladesh in 2013. The sole reason for why it was so deadly is because the managers in this garment factory had so much pressure to meet deadlines so they chose to continue working despite the cracking walls of the building. There is no question that this was a blatant disregard for safety for the interest of their bottom line. As a result, thousands of people died.

Since this information was found in Inditex’s annual report, it is safe to assume that this is reliable information. There are standards that they must comply with when creating their annual reports. This information will help to build a balanced argument in my paper. Using this information, I can acknowledge the good things that Zara does and then explore why there is such a gap between what these companies appear to be and how they actually function as a business. Zara has built a strong reputation as being the execption to globalization. People love Zara because they used to do the majority of their production very locally within Spain and Portugal. This stimulated their economy and created jobs for many people. But the truth of the matter is that they don’t function like that anymore. Now they outsource much of their production to countries such as Bangladesh, Vietnam and Sri Lanka. They are living upon the reputation that they initially built which people still remember to be true.


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