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Global Brands and Labour in Developing Countries

Topic: Grounded Theory Study of Unethical Labour Practices Associated with Global Brands in Developing Countries

(2006, 2845 words, 80%)

Abstract

This is a grounded theory study about unethical labour practices associated with global brands' operations in developing countries. The research paper develops a substantive theory or at least a set of propositions explaining the wider contextual underpinnings of unethical labour practices deriving from the operations of global brand companies.

The grounded theory method chosen to undertake the research necessitates theoretical sampling of global brand companies that can substantiate the phenomenon in question. Data are obtained using tertiary literature, and analysis is performed using the constant comparative method of grounded theory approach.

The study methodology contributes in the development of grounded theory model of unethical labour practices associated with global brand companies in developing countries. Findings of the research paper refine understanding of the wider contextual issues surrounding abuse of labour often associated with the major global brand companies.

Keywords: Global brands; Consumerism; Unethical labour practices; Developing Countries; Grounded Theory.

1.1 Problem Statement

Through the World Trade Organization and regional and bilateral trade agreements, corporations now enjoy global protection for many newly introduced rights (Raworth 2005). As investors, the same companies are legally protected against a wide range of governments' actions (Wright 2006). Workers' rights have moved in the opposite direction (Somavia 2006; Raworth 2005). The result is that corporate rights are becoming ever stronger, while poor people's rights and protections at work are being weakened (Raworth 2005).

One cause of such precarious conditions is the new business model that has emerged under globalisation. Global brand companies have positioned themselves as powerful gatekeepers between the world's consumers and producers. Their global supply chains stretch from the supermarket shelves and clothes rails in the world's major shopping centres to the fruit and vegetable farms of Latin America and Africa and the garment factories of South Asia and China.

Globalisation has hugely strengthened the negotiating hand global brand companies (Raworth 2005). New technologies, trade liberalisation, and capital mobility have dramatically opened up the number of countries and producers from which they can source their products, creating a growing number of producers vying for a place in their supply chains. At the same time, international mergers and acquisitions and aggressive pricing strategies have concentrated market power in the hands of a few major retailers, now building international empires (Raworth 2005). These companies have tremendous power in their negotiations with producers and they use that power to push the costs and risks of business down the supply chain. Their business model, focused on maximising returns for shareholders, demands increasing flexibility through 'just-in-time' delivery, but tighter control over inputs and standards, and ever-lower prices.

Though a host of factors contribute to labour abuse, one root cause is the pressures of global brand companies' own supply-chain purchasing practices, undermining the very labour standards that they claim to support. The foregoing premise, as simplistic as it is, yields limited understanding as to the wider contextual underpinnings favouring abuse of labour in developing countries. It is against this backdrop that the current paper provides a grounded theory model of unethical labour practices associated with global brands in developing countries.

1.2 Research Questions

To move forward the investigation, a main research question in figure 1 (with sub-research questions) guides the theoretical constructs of this paper:

Figure 1: Research questions for this paper

What are the contextual underpinnings for unethical labour practices associated with global brands in developing countries?

i What factors induce the environment for unethical labour practices?

ii What are these unethical labour practices?

iii Which global brands have been/are associated with unethical labour practices in developing countries?

1.3 Definition of Terms

In the interest of clarity, the term--global brand be defined to eliminate any ambiguity and misconstruction.

Global Brands: These are brands that are available, well known and highly regarded throughout the world's market (Johansson 2006). This includes such brands as Coca Cola, McDonalds, Microsoft, Nestle, Nike, Mercedes, Sony, and Nokia. Also, there are other organisations that have the stature of global brands yet operate a limited brand image. More often these are multinational corporations such as Wal-Mart, Gap, Tesco, and General Electric.

2.1 Methodology

The theoretical framework chosen for this paper is that of grounded theory. Grounded theory is a qualitative inductive approach, through which explanatory theory is derived from a close consideration of the data (Strauss & Corbin 1990, pp. 20-23). Data systematically obtained and analysed is allowed to shed substantive light about the phenomenon investigated (Creswell 1998, p. 98). Its intent is to further an understanding of social phenomena. The current research refrains from testing any hypothesis; rather it collects the data and allows the data to 'tell the story'.

The grounded theory process allows for emphasis on identifying concepts from documents, for example. Generated concepts and their relationships, explain and/interpret variations in the substantive area under study (Glaser 1992, p. 16). The outcome is the development of theoretical formulations and propositions through the agency of rigorous pattern of analysis (Glaser 1992; Seibold 2002; Douglas 2003).

Consequently, the research questions formulated are framed within with the knowledge that grounded theory particularly orientates towards eliciting improved understanding of theoretical conceptualisations of processes of social interactivity (Douglas 2003; Creswell 1998). Put simply, grounded theory provides the researcher