Complexities of reputation management and policy making in a globalized world: Bangladesh after Rana Plaza

The World Bank
Sonia Jawaid Shaikh



On April 24, 2013, a building called Rana Plaza in Dhaka came crashing down on thousands of workers, killing more than 1,100 and injuring more than 2,500 individuals. Unlike any other building collapse, this received widespread international attention - and continues to do so - because the building housed factories that sewed garments for many European and American clothing brands. As a result, a chunk of blame for the collapse and deaths was placed on retailers and brands that outsourced their work to Bangladesh, and particularly Rana Plaza.

Since the tragedy, these retailers and companies, both big and small, utilized several brand reputation management strategies. This, in turn, impacted the policies of the garment industry in Bangladesh. Primarily, two retailer blocs, The Accord and The Alliance, emerged which have created their own local and international dynamics.

The Accord is a legally binding agreement that has been signed by many European and North American companies and allows for factories to be vetted and shut down in case of non-compliance with safety standards. The Alliance, signed by North American groups such as Walmart and JC Penny, however, does not guarantee any such protections and allows companies to use their own rules with any legal requirements.

Interestingly, many companies who are either part of The Alliance or The Accord, choose not to publicise their participation in such agreements. This allows them minimize any attention that could turn into criticism while still taking part in initiatives in case there ever is an inquiry from media, regulators, or other interested parties.

With the emergence of such retailer blocs, the role of state has transformed. The retailer blocs in Bangladesh suggests that all not workers employed in the garment industry can expect the same level of care, policies or safety rules – which is peculiar and not necessarily beneficial to those employed in the sector. This creates a particular problem for the state of Bangladesh because the “agreements” created by companies actually pertain to its citizens – and yet governmental institutions do not play an active role in ensuring worker safety. Instead, the state appears to be arbitrating between different groups and reneging its huge responsibility to ensure that local safety standards apply. This is something that policy makers and representatives of countries in which work is regularly outsourced should be careful of and devise ways to prevent such scenarios that do not guarantee equal policies for all. At the end of the day, regardless of the strategy or the agreement signed, it is the workers who remain most affected.

A case study is presented here which details these retailer blocs and other strategies that companies used post-disaster in Bangladesh.