Midterm Assignment

Shahroz Khan

Commerce 4SA3: International Business

Professor Timothy Fung

Section: C08

October 24th, 2023

 The development of globalization, especially during the late 1900s with increased

communications and technologies, has contributed to the appearance of many large global firms

and global trade on scale we would have never imagined before. This increase in global business

activity has led to many positive and negative outcomes. For instance, because of large

corporations competing on a global scale, it has resulted in increased competition providing

consumers with more buying power and control. In fact, in the present, this is evident as the

majority of consumers are able to purchase any product they desire with a click of a button with

any firm globally. However, because of increased competition with the development of

globalization, companies are finding other ways to increase their profits of which one main way

is by reducing their costs. Cost-cutting tactics companies are implementing include opening

factories/ production plants in 3rd world countries such as China, Indonesia and Bangladesh. By

opening production plants in these countries, workers in those countries get taken advantage of

as firms would provide very low wages, poor working environments and long schedules.

Moreover, firms would also exploit women and children to work in these harsh conditions as

well. In fact, according to the Minister of Manpower Republic of Indonesia, it stated that of the

58.8 million children in Indonesia, 6.9% are deemed as working children. Furthermore of the

6.9% working children, 20.9% of those work in the worst forms of labour. By working in the

worst forms of labour, children in this category generally have to drop out of school in order to

keep up with the amount of work they are required to do in their exploitative jobs despite it being

low pay with harsh working conditions (Jalan, 2022).

An example of a big corporation that used the emergence of globalization to exploit

workers in developing countries in order to improve their profits is Nike. As you can see in the

first illustration under the appendices section (Appendix A), you can see a supervisor forcing
children to keep working in which he uses Nike's slogan “just do it” to do so. This picture

displays the hypocrisy of Nike as the slogan encourages people to push themselves and work

hard in order to achieve any milestones they want to accomplish. Whilst they are pushing this

initiative towards their consumers, Nike is exploiting children into giving up their dreams by

forcing them to not go to school as well as work in conditions that are hazardous with very few

benefits in return. In fact, in 1991 a report by Jeff Ballinger was published in which it stated that

sweatshop workers in Indonesia only received 14 cents per hour. As a result of the article being

published, many consumers were furious in which the CEO of Nike Phil Knight in 1998

delivered a speech assuring the public that Nike would improve the situation. This would be

done by increasing wages as well as providing a safe working environment. Moreover, Nike

would also report on an annual basis the recorded payments and current working conditions,

assuring everyone of full transparency (StudySmarter UK, n.d.). The only reason why Nike did

this was only the fact that they were caught doing so and received a lot of backlash. For 21 years,

they continued operating unethically for the sole reason of improving profits to please their

shareholders and only decided to improve the benefits for international workers in developing

countries in order to not ruin their brand reputation.

Another example of a big global corporation that used globalization to unfairly treat

workers in order to make more profit is GAP. In the second illustration (Appendix B), the picture

displays a child crying as he is being forced to work whilst chained up in which he is being

physically abused by a supervisor in order for the child to keep up with production. Furthermore,

it displays the child having no basic needs covered by the company as he is not wearing a shirt in

which we can see him being malnourished with his ribcage being shown. This picture captures

how the child is being forced to work in these harsh conditions with the interpretation of his
workplace being a prison as if he was forced to do this job from GAP. Unfortunately, this is not

far from the truth as many children in India are forced to work in these child labour jobs in order

to help their families in buying necessary items such as food, water, shelter, etc. Because of this,

many large corporations such as GAP exploit this by not investing a lot of money into these

factories just to improve their profit margins. Furthermore, a lot of these children as seen in the

picture are also abused physically and mentally. In fact, in a GAP factory supplier in Indonesia, a

woman talked about how she was called stupid and mocked for not working faster and

threatened with contract termination on a daily basis. Moreover, she also said that “they also

throw materials. They kick our chairs. They don’t touch us, so they don't leave a mark that could

be used as evidence with the police” (Hodal, 2018). Likewise as Nike, despite both firms being

multi-billion dollar corporations, they do not provide any support to workers in developing

countries as they are exploiting them in order to make as much profit as possible to please their

shareholders as that is what is important to them. These corporations display amazing acts such

as raising money and volunteering in order to make the public trust them, while in reality,

committing unethical acts that are not really displayed in which globalization is a major part of

the reason as to how these corporations are able to do this.

Lastly, the final illustration (Appendix C) displays a young child sewing clothing. What

you might not know is that this girl was named Bithi in which she had a dream of becoming a

doctor, but because she was in poverty especially after her dad being very ill at the time, she was

forced to work in this sweatshop to help provide for the family. Every day, Bithi helped create a

minimum pair of 480 pairs of pants in which she would work 60-hour weeks in exchange for $1

in wages. With this being her reality at the time and giving up on her dream of becoming a

doctor she said “the first day, I felt bad, I was too small. I was surrounded by other older people.
The first day, I cried.” This makes me sick as the clothing items Bithi was producing belonged to

established shops in Canada and the United States in which they would most likely be able to

afford the workers better pay, benefits and working conditions. However, instead these shops are

very greedy and want to focus on making the shareholders content as that is what's more

important to them.

In summary, with the emergence of globalization and many firms being able to produce

and sell goods all over the world, while there may be some benefits such as increased

competition which results in very few firms being able to attain a monopoly in an industry. The

increased competition resulted in many large corporations such as Nike and Gap exploiting

workers in developing countries to work in harsh conditions with very little pay and benefits in

order to make their shareholders content and increase their market share within the industry.

These exploitative actions done from these firms resulted in many children and workers giving

up on their dreams and pursuing an education just to be able to help and provide funds for their

families. Despite firms recognizing this, rather than invest more in these factories, they instead

are very greedy and don’t take any actions. In fact, from the articles earlier seen, they only take

actions when these exploitive actions are shown in the public for their consumers to see in which

they only make positive changes in order to not ruin the company’s reputation. With articles

being published more as time passes, firms are more hesitant to exploit these workers. In fact, the

use of child labour decreased by ⅓ since 2000 with the UN planning to stop all forms of forced

labour and modern slavery by 2025 (Dubay, 2023). I hope the UN plans to keep its promise to

reduce the amount of workers being exploited by large corporations but only time will tell.
Citations

Jalan, P. (2022). Ilo and Corporate Social Responsibility - International Labour

Organization.

https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---ilo-jakarta/documents/

publication/wcms_145592.pdf

Nike sweatshop scandal. StudySmarter UK. (n.d.).

https://www.studysmarter.co.uk/explanations/business-studies/business-case-studies/nike

-sweatshop-scandal/

Hodal, K. (2018, June 5). Abuse is daily reality for female garment workers for GAP and

H&M, says report. The Guardian.

https://www.theguardian.com/global-development/2018/jun/05/female-garment-workers-ga

p-hm-south-asia

Dubay, A. (2023, June 9). Child labour: Facts and how to help. World Vision Canada.

https://www.worldvision.ca/stories/child-protection/child-labour-facts-and-how-to-help#:~:t

ext=The%20number%20of%20children%20involved%20in%20child%20labour%20has%2

0declined,modern%20slavery%20and%20child%20labour.
Appendices

Appendix A: Illustration 1

(Photograph of Nike Sweatshop), Retrieved from

https://flagshipimpact.com/tpost/7gpcm2d9r1-nike-and-child-labour-path-to-sustainabi

Appendix B: Illustration 2

(Photograph of GAP using child labour)

https://childlaborthenandnow.weebly.com/child-labor-spotted-today.html
Appendix C: Illustration 3

(Photograph of children regarding child labour)

https://www.worldvision.org/child-protection-news-stories/child-labor-garment-factory-banglade

sh