Inditex: Outsourcing in Tanger The case solution
Question 3
Yes inditex should continue its operationsin Moroccan. The reason for it is that now the Moroccangovernment has realized the importance of fabric and this industry will also create jobs and has the tendency to increase the Moroccan exports as well.Also, as now the government is interested in textile industry; it will provide resources to the company.The government might also help the company in clearing its image and helping it in dismissing all the allegations legally and formally. Also inditex is the largest textile sector in Morocco and if it lays off, then Morocco would lose a significant portion of its profit generating resources. Along with that,the criticism by SETEM would also be offset in sometime due to the government's-support and as the company has been awarded; it would help it in falsifying the accusations made by the NGO.
Question 4
The alternatives that I can use to convince the social council are:
- Providing good products to the customers.
- Fair prices would be charged from the customers.
- Would follow a fair recruitment process.
- Will be good to employees and consider their suggestions regarding work and ethics.
- Will provide fair financial record in the annual report.
Companies now need to be aware of CSR responsibilities because it has now become necessary for the businesses. Many companies are interested in protecting the rights of their employees, customers and stakeholders.
Question 5
To protect its reputation, the company has already implemented the code of conducts and is continuously trying to convince SETEM.Along with that, the company should try to make more investment in social welfare programs,because the company is continuously accused by the NGO, so to offset the accusations; the company should try to win audience by doing something which will create a good image of the company among the public.
Such as: Arvind Mills, a textile company in India, has established rural development funds to benefit the society.Social welfare programs like charities and volunteering programs that promote the company, can also be a way for the companymaintain its good reputation. This also helps in attracting the new customers who are not aware of the company, and builds a good image in customers’ mind.Any of the aforementioned actions would not impact like this the company’s competitiveness because they do not affect any of the company’s procedures.
Question 6
Based on the company’s financial performance from1997-2005; it has significantly improved from year to year. The company has excelled in all the factors, i.e. profitability,reduction of the turnover rate and the number of stores.All of this data proves that the company is good in its CSR activities, which is why it is able to generate sufficient profits. Had the company been in competitive; it would have succumbed to a major downfall. If we look at the increase in the number of-employees; it indicates that the company’s employees are satisfied and it is managing the employees’ engagement efficiently, resulting in a good workforce. In addition to this, the company has also expanded its operations, and if a company expands, it means that it is getting good responses and generating profitable revenues.....................
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