MGT/521 Week 4: Strategy and Ethics Analysis for Leadership, sample paper

Recruitment Fees and Seventy-Hour Weeks at a Fabric Mill: A Strategy and Ethics Analysis for an Outdoor Apparel Brand's Leadership Team on Whether to Exit or Remediate

[Student Name]

University of Phoenix

MGT/521: Management

Week 4 Assignment

[Instructor Name]

[Date]

The brand, supplier and figures are a composite written for a model paper.

A composite outdoor apparel brand with about $240 million in annual revenue designs jackets, fleece and base layers and sources them from about 40 finished-goods factories in Asia and Central America. Its marketing emphasizes durable products made responsibly, and responsible sourcing appears in its mission statement. Last quarter, for the first time, the brand commissioned an audit of a second-tier supplier, a fabric mill in Southeast Asia that supplies recycled polyester fleece to three of its factories and about a quarter of its fleece volume. The audit found that about 310 migrant workers had paid recruitment fees to labor agents averaging about $1,800, roughly four months of wages, many financed with loans, and that during peak season workers routinely worked 70 hours a week. The audit found no locked doors or confiscated passports. The brand had not caused these conditions, but it had profited from them, and its customers had paid a premium partly for the promise that it would not. This paper analyzes the decision facing the leadership team.

The Facts and What They Mean

The United Nations labor agency's published indicators of forced labor include debt bondage and excessive overtime (ILO, 2012). Workers who borrow heavily to pay recruitment fees may be unable to leave a job until the debt is repaid, and a 70-hour week exceeds both local legal limits and the brand's own code of conduct. The findings do not establish that every worker was in forced labor, but they present serious indicators that must be addressed.

Legal Exposure

Section 307 of the Tariff Act of 1930, 19 U.S.C. § 1307, prohibits importing goods produced wholly or in part by forced labor, and U.S. Customs and Border Protection can detain shipments when it has reasonable evidence of forced labor in a supply chain. Because the mill's fabric enters the brand's finished goods, a detention could hold a quarter of its fleece shipments in port. Major retail partners' supplier codes also require action on forced labor indicators.

The Strategic Stakes

The brand competes through differentiation: it charges premium prices for quality, durability and responsible production. That position depends on trust. A public report that its fleece came from a mill with forced labor indicators would damage the attribute that distinguishes it from lower-priced competitors. At the same time, the mill is one of few that can produce its recycled fleece at the required quality, and replacing it would take nine to twelve months, risking shortages in the peak season.

The Alternatives

Exit: stop ordering from the mill immediately and move volume to other suppliers.

Remediate and stay: require the mill to repay recruitment fees to workers, cap working hours, allow independent monitoring and adopt an employer-pays policy for future hiring, with the brand sharing the costs.

Delay: continue ordering while gathering more information and waiting for the industry to act collectively.

Ethical Analysis

Consequences

A consequentialist analysis asks which option produces the best outcomes for everyone affected. Exit ends the brand's exposure quickly but may harm the workers most: if the mill loses a quarter of its polyester fleece orders, some workers could lose their jobs while still owing their debts. Delay leaves workers in debt and overworked. Remediation offers the best outcome for workers, repaid fees and reasonable hours, if the mill cooperates.

Rights and duties

A rights-based analysis asks what the brand owes the workers regardless of outcomes. Workers have a right to leave a job freely and to reasonable hours. The brand has a duty not to benefit from violations of those rights. Delay fails this test. Exit ends the benefit but does nothing for the rights of workers who were harmed in producing the brand's goods. Remediation addresses both.

Justice

A justice analysis asks whether costs and benefits are fairly distributed. The workers bore the cost of recruitment fees while the mill, agents and brands captured the benefit of their labor. Fairness requires that those who benefited bear the cost of repair.

What the Evidence Says About Remediation

Remediation is only as good as the monitoring behind it. Locke et al. (2007), studying Nike's supplier audits, found that monitoring alone produced limited and uneven improvement in working conditions, and that improvements were more likely where factories had better management practices and where the brand worked with suppliers collaboratively. The lesson is that audits identify problems but do not solve them; the brand must work with the mill on how it hires and plans production.

The brand's own practices also matter. Excessive overtime at suppliers often rises when brands change orders late or compress lead times. The brand's peak-season fleece orders were finalized an average of five weeks later than planned last year, which pushed overtime onto the mill.

The Stakeholder View

Leadership must also weigh the claims of stakeholders beyond the workers. Customers who pay a premium expect the brand's sourcing claims to be true. Retail partners need assurance that the goods they sell will not be detained or trigger their own codes of conduct. The mill's owners have invested in recycled fiber capacity that the brand helped create demand for, and other brands buying from the mill face the same findings, which creates an opportunity for joint action that would spread the cost of remediation and strengthen the pressure on labor agents. Employees at the brand, many of whom joined because of its values, will judge leadership by its response. A decision that satisfies the law but abandons the workers would satisfy few of these groups.

Recommendation

The leadership team should choose remediation, with conditions and a deadline. The mill must repay recruitment fees to all affected workers within six months, with the brand funding half the cost, about $280,000, and the mill funding the rest. The mill must cap hours at 60 a week, including overtime, and adopt an employer-pays policy for future recruitment. An independent organization, not the brand's usual auditor, should verify repayment through worker interviews. If the mill does not meet the conditions within six months, the brand should exit in a planned way over a season, giving notice and coordinating with other buyers to protect workers.

The brand should also change its own practices: finalize fleece orders at least ten weeks before production, extend its audits to all second-tier suppliers producing more than 10% of any material and report publicly on what it found and did.

Conclusion

The fabric mill's recruitment fees and excessive hours present forced labor indicators that expose the brand legally and threaten the trust on which its strategy rests. Consequentialist, rights-based and justice analyses all favor remediation over exit or delay. Evidence on supply chain monitoring shows remediation must be collaborative and backed by the brand's own purchasing practices. Funding half the repayment, setting conditions and preparing a responsible exit if they are not met protects workers, the brand's legal position and its strategy together.

References

International Labour Office. (2012). ILO indicators of forced labour.

Locke, R. M., Qin, F., & Brause, A. (2007). Does monitoring improve labor standards? Lessons from Nike. ILR Review, 61(1), 3-31. https://doi.org/10.1177/001979390706100101

Tariff Act of 1930, 19 U.S.C. § 1307 (2018).