International Trade and Apparel Industry: Concepts and Challenges, Quizzes of Production and Operations Management

Download International Trade and Apparel Industry: Concepts and Challenges and more Quizzes Production and Operations Management in PDF only on Docsity! TERM 1 Chapter 4: Terms DEFINITION 1 Ethics: system/code of morals of a prticular person, group or profession and its application to decisions and/or particular problems of conductMorals: the degree of conformity with generally accepted or prescribed standards of "rightness" in character or conductCulture: everything that people have, think, and do as members of their society-objects, ideals, expected patterns of behavior, attitudes, values-broad and narrow:Broad:universal rightsILO- 1)freedom of assoc. & collective bargaining2) elimination of forced labor 3) elimination of discrimination 4) elimination of child laborNarrow:firm's decision making -Culture: shared mental programming TERM 2 Code of conduct DEFINITION 2 = statement of principles and standards by which business decisions are made. -state values and goals of the business- comes from the leader(s) of the business-is clearly communicated to contituents and employee-lessens confusion with suppliers TERM 3 Defenders of Human Rights DEFINITION 3 1) labor unions2)trade associations3)social sctivists TERM 4 Labor unions: history DEFINITION 4 History:assoc. of workers for the purpse of bargaining on behalf of workers with the employees on the terms and conditions of employment. Late 1800s: :sweatshops -unsanitary & unsafe, poor lighting:poor treatment -child labor--> long hours, low paydifficulty in establishing unions-jobber/contractor system- oversupply of workers-seasonality of production-cultural and language barriersTriangle and shortwaist company (turned things around)-fire in 1911 (workers protested and many joined unions)establishment of unions:-international ladies garment workers union (1910)-piece rates (rice paid per cuff, button, shirt, etc.)-working conditions-strike procedures-unemployment insurance-health and life insurance-working hours TERM 5 Labor unions: Unions in textile & apparel complex DEFINITION 5 Fiber and textile industries-amalgamated clothing and textile workers union (ACTWU) fiber industry -75% of artificial fiber industry(cellulosic) -20% of synthetic fiber ind. (noncellulosic) Textile industry -12-14% of yarn, thread, and weaving workers -25% of dryers and finishers Apparel Industry (20-50% particip.) - international ladies garment workers union(ILGWU) -->womens, childrens and infants wear Amalgamated clothing and textile workers union (ACTWU) -->mens and boys wear -union of needletrades, industrial and textile employees (UNITE)- 1995 -->merger of ILGWU & ACTWU-UNITEHERE! (2004) -->merger of Union of Needletrades, Inudstrial and Textile employees (UNITE) and hotel employees and restaurant employees international union (HERE!) TERM 6 Labor Unions: Role of unions in increasing wages DEFINITION 6 (graphs in notes) TERM 7 Labor unions: Current challenges DEFINITION 7 Demand for union labor is decreasing-hire non union labor-go offshoreWorking conditions-OSHAMinimum wage-department of labor(membership in US has been decreasing) TERM 8 Labor unions: Change to win federation DEFINITION 8 needs American workers, especially those whose jobs are outsourced7unions and 6 million workersworking with unions around the world TERM 9 Social Activists DEFINITION 9 =person or organization that endorses a doctrine or policy of taking positive direct action to achieve an end, especially a political or social end. -NGO's (non gov't orgs.)-Faith based orgs-Indigineous people's movements-Foundations (in our industry, 3 groups: 1- unions 2- trade associations 3- social activistsSocial activists(consumers, retail, buyers, prod. developers)-consumer citizenship: obligation of consumers to make contributions to the social good through their economic votes-->everyone who goes into shop and chooses one item over another is casting a vote in econ.ballot box-->to live measn to buy, to buy means to have power, to have power means to have duties -duty of consumers to find out under what conditions the articles they purchase are produced & distributed and to insist that these conditions shall be wholesome and consistent with a respectable existence on the part of the workers, and with the protection of the environment TERM 10 Virtuous circle DEFINITION 10 Production:Agricultural entities----->Government----- >Universities----->Consumers----->Retailers------>Union leaders------>Factory Owners.... TERM 21 Apparel industry response to trade competition DEFINITION 21 Types of sourcing (manufacturers, private label retailers)-Foreign production of garments made of US fabrics and cut in the US, 9802 -Goods are not subjected to quota restrictions if fabrics both made and cut on US -Projecting textiles - Intimate apparel and swimwear -Light weight shipped at lower costs-Domestic production foreign fabric -Purchase runs of fabric -Short runs of fabrics-Foreign production made of yarns fabrics produced in mexico, US, canada (NAFTA) -yarn forward ruleForeign contractor, foreign fabric -Lower costs -Hidden costs, less control, specifications should be supploed -70% of apparel produced this wayForeign contractor, domestic fabric -More control over the quality -Better for coordinated lineOwned production overseas -least common option -risk -gov, economy, $$$ -Less flexibility -Investment may be impossible -Combinations TERM 22 Illegal and unethical trade activity DEFINITION 22 Effects of tree global trade on illegal and unethical trade activity -To reduce costs, business may search for -Capitalixation -Privatization - Fewer regulations - Benefits all countries -Fewest regulations for labor, enviornment, business practices -Lease enforcement of laws -Lowest wages -Lowest enviornmental regulations -Docile desperate workersEconomic systems<-----Centrally planned---- --Mixed market------Market directed------>1. Market directed- Buyers and sellers interact in order to exchange goods and services- very little government involvement Ex: Hong Kong -SAR (special administrated region) a. Price pays important rile -Accurate information on cost and retail prices -Incentives (produce goods demanded; innovation) b. quality of life may suffer -environment - distribution of wealth -layoffs2. Centrally Planned a. Goals of the government dominated b. Price not central force- lack of rewards3. Mixed economy -China - Ingage in illegal practices- ignored laws in order to attract competitors - Manipulating the yuan -Counterfit product -Cheating to grow economy -Use prison workers to produce goods TERM 23 Results of "Race to the bottom" or " vicious competition DEFINITION 23 1. Seek lowest price production in developing countries to be price competitive2. To maintain business, governments look the other way to keep low costs3. Low wages, poor coordinates, no benefits4. Workers and countries oppressed and impoverishedVicious circle: Uniwue characteristics of textile/apparel industry- Lack of transparency -Use of subtractors -Home work-Contracting system- Centrally planned economies (covernment supporters the industry) -Exports are critical to countries economies depending on apparel production -SR perceived to decrease competitors of textile and apparel industries -Lack of enforcement and monitoringEx: 80% of exports from bang, haiti and camb. are clothing and textiles -Economy depends on industry-People lack freedom and power to influence policyResult: about 50% of textile export and 75% of apparel exports are being produced in developing countries -China, bang, mexico, cambodia, pakistan TERM 24 UN global impact DEFINITION 24 -Serves as a guideline for businesses throughout the supply chain -Outlines principles for companies to follow-In order to allign businesses to policies and practices with a set of internationally accepted valuesAddresses issues of human right, labor standards, the enviornment and anti-coruptionHuman rights--Support human rights and not be complacent in violationsLabor Standards-Support freedom of association and collective bargaining-Eliminate forced and compulsory labor-Eliminate child labor-Eliminate discrimination in employment and occupationEnvoirnment-Precautionary approach to environment challenges- Promote greater environmental responsibility-Support environmentally friendly development and diffusionAnti curruption-Work against corruption, including extortion and bribery. TERM 25 Human rights and labor standards DEFINITION 25 Undocumented immigrant workers-estimated 8 million in US, end up in sweatshopsHuman traffickingFacilitation the immigration of people, to go to another country for momentary gain -Forced labor, can be indebted to those who brought them illegally TERM 26 Anti-corruption DEFINITION 26 Illegal transshipment- Shipping through a third country which has new/no quota/tariff restrictions. Produce counterfeit production documents in order to get them into importing country -Prior to 1996, country of origin was where the fabric was cut, after 1996; where the garment was assembled -CHina primary transgressor** -Primary areas theyre cominy through: Africa (GOA), caribbean (9802), S. America -After WTO, trade rules put in to protect intellectual property (creative work) -Owner of work has right to keep others from using it without permissionCopy right law-Patents: grants monopoly for limited time to firm as a reward for investment, in research/development -eliminates competition - encourages to continue developmentsTrade mark law-symbols used to distinguish 1 product one product from competition -very difficult to protect apparel designLicensing- pay to use a brand/ logo, ect. -licensor- gets % of whole sale price; gets royaltyCounterfeiting- Copying/imitating products with purpose of deceiving the consumer -making look a likes -globalization has increase amount of counterfeitsGrey market: original goods not sold by brand (informal black market)**Calvin Klein not part of counterfeits TERM 27 Capitalistic economy DEFINITION 27 -Private ownership of property exsists-Income from business opperations acute to individuals who won it-Indivudials and firms are freww to compete for economic gain-Profit motive is basiv fo economic life TERM 28 Democracy DEFINITION 28 -The people hold the ruling power either directly of by elected officials-India most populus country with democratic system TERM 29 Socialism DEFINITION 29 -Ownership, production and distribution are operated by people of the community rather than individuals in the government TERM 30 Communism DEFINITION 30 -The resources are cooperatively or state owned-Classless society where there is an equal distribution15.6% population western capitalist -77% of worlds GDPAsain countries are moving towards capitalism-Need to move to capitalism to become power houses- even china embrases capitalism with communist government- India- a democracy but more socialist than capitalist TERM 31 Protecting the domestic apparel industry DEFINITION 31 Period of adjustments-Mergers and consolidations- To become more efficient-acquisitions of smaller firms by later firms -allowed companies to use economies of scale-Vertical integration- to have better control over businesses and bbe more efficient-new technology- more efficient and more quality-Marketing orientation TERM 32 Enforcement of Trade Laws DEFINITION 32 1. Customs-Monitor assesing, keep records-Only 1% are examined (homeland security issues)2. TRIPS (trade related aspects of intelectial property rights)3. New technology-Laster imprinted fabrics-Electronic tags and holographs-Online monitoring firms for the webVisious circle-Members of the supplu chain that share the sale values -Circles of positive influence-Doing the right thing - Sphere of influence TERM 33 Generic def. of social responsibility from industry organizations DEFINITION 33 Achieving commercial success in ways that nonethical values and respect people, communities, and the natural enviornmentTripple bottom line -People -Planet - EarthComprehensive set of policies, practices and programs that are integrated into business operations, supply chains and decision making processes throughout the company. TERM 34 Political response to competition DEFINITION 34 Agreements by industry and labor for special trade protection- Maintaining employment-Slowing the pace of adjustment Ex. auto industry with the bailout-Maintaining the incomes of certain groups-Protecting domestic labor from cheap foreign labor (violates competitive advantage- economic principle)-Presenting key industries that are of strategic importance -Medical textiles are made in US -Military uniforms made in US-Quest for a level playing field TERM 35 Barriers to fair trade (unfair competition) DEFINITION 35 Subsidies- financial benefits given to a firm or industry by the government (production, export, price support) -governments give to nurture an indstrty of to precent socail unrest -Lower production costs - Support ineffecient firms -Counter veiling duties: may be used by importing countries -safeguardsExport sub: firm receives payment from government in order to grow domestic product for export and increase inflow of stable foreign currency ex: chinaSell goods at less than cost of productionPrice support system: government purchases and spres argil. products in order to increase price of product on world market ex: US active in this--- Cotton