Travels of a T-shirt in the Global Economy Harvard Case Solution & Analysis

Summary

As the name of the book “the travel of the T-shirt in the Global economy” by Pietra Rivoli reveals the transformational factors of a simple product which is T-Shirt. The author emphasizes the fact that it is not true that globalization benefits the developed and developing nations equally. Starting with the manufacturing of a T-Shirt, the author explains that the result of globalization and free trade is advantageous for the developing economies since it has been implemented. The outcome of Globalization is the establishment of manufacturing industries of foreign countries in the poor nations. This development has although increased the employment rate in the developing countries, but it has also violated the human rights and labor laws over there.

At low cost developed economies manage the manufacturing of their product from emerging economies by exploiting their human resources. The author has discussed that the textile industries have made significant efforts in the industrial revolution. The penetration of T-shirt in the international market has ended by illuminating the hard work of the poor and slave in the textile industry. In the next part of the book, Rivoli identified that although the developing economies are working on a system called free trade, but still they are restricted by export duties (quotas) and rents (tariff). Due to which the emerging economies suffer in an ideological gap between them and the developed nations. The author is confused between the free trade and the protectionism policies implemented in developing countries that she has repeatedly used these words in the book alternatively. However, the main argument reveals that the T-shirt is unable to enter into the global economy due to protectionism, as the diffusion of the product simply wants free trade.

At present, the textile industry in the United States encounters the issue of profit maximization for which they want to revamp their strategies that would minimize their cost. The U.S manufactures keenly absorb the strategies of their competitor and reviewing the low manufacturing cost structure by employing labor at low cost in the  developing economies.  The author has also discussed the benefits of the trade protectionism in the form of employment opportunities created in the developing countries. However, the growth of a nation depends upon the development of industrial activities.

Strategies

We have selected Nike and have provided some initiatives to enhance the standard of living of their labors in the developing countries.

Strategy 1

It has been recommended to establish a plan of providing minimum legal wage to its labors on the basis of quality skills. This strategy involves the hiring of unskilled or low-skilled workers at the current level of wages from the labor market. After completing the trial period when the worker becomes fully skilled the company must provide them market compatible salaries on a daily basis. On the other hand, these wages are being decided on the basis of per unit rate.

Strategy 2

A step can be taken to standardize the wage per unit of product with an increased amount of incomes; the consignment of the order has been subdivided on the basis of days in a month. Every labor should assign target units that he or she has to compete for a limited period.  The application of this strategy also increases the motivation level of the employees in which the worker has to work on more units in order to increase his/her wage. This increase in the income generates an active competition among workers, and the workers strive to achieve a significant number of units per day. Some of the workers will also go to overtime to gain more compensation.

Strategy 3

A negative practice of collecting the security amount from the labors has been observed when some multinationals established their manufacturing facility in a developing country. The reason for this norm is the heightening of illegal activities that just called the sale of employment.  In this way, how can an economy expand if its workers are suffering from this dilemma. It has been highly suggested for the company to check its organizational structure and encounter all the practices related to buying and sale of employment. The company can make a committee whose sole purpose is to ensure the merit basis of a work contract.......................................

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