A Must or a Will? A study of the motives behind fashion retailers’ engagement in welfare projects in Bangladesh

Abstract

Fashion retailers operate in an industry characterized by outsourced production in countries with poor living and working conditions. The low control that consequently follows, is a challenge for fashion retailers to handle. In the past decade, awareness of the prevailing circumstances in the production countries has increased. Engaging in local welfare projects has thus become a common response to mitigate negative outcomes and contribute to development in local communities affected by production. This thesis aims to investigate the motives behind why fashion retailers engage in welfare projects in Bangladesh, one of the world’s largest readymade garment (RMG) exporters, by examining KappAhl, Lindex, and Bik Bok. The thesis was conducted through a qualitative approach, using both primary and secondary data to provide a holistic view of the situation. The conclusion is that the motives for implementing CSR practices can be traced back to external push factors and internal pull factors. Push factors are of results of societal pressure due to poor conditions and inadequate enforcement of codes of conduct in producing countries. By transparently engaging in welfare projects, corporations can accommodate societal pressure, gain legitimacy and improve corporate reputation at once. Pull factors are corporate desires to create value for the fashion retailers’ stakeholders by giving back to local communities affected by their production, and moreover create value for customers and employees. An additional motive is that it increases efficiency and creates goodwill for the company itself. Push and pull factors thus motivates fashion retailers to engage in welfare projects, as it is a tool to meet societal demands, gain legitimacy, improve corporate reputation, and create value for stakeholders - simultaneously.