Walt Disney's Leadership Pulls out of Bangladesh and Other Countries

It’s been two weeks since Cambodian workers at a shoe factory south of Phnom Penh died after a ceiling cave-in. In the grim game of counting casualties, it was not the kind of massive disaster that befell Bangladesh in late April when a structure housing five garment factories collapsed, killing 1,127 people.

Yet the Cambodian tragedy had an awful resonance of its own if only as a reminder that such disasters in the developing world occur with predictable regularity – and that corporations will never escape the necessity to define how or if they can do anything about it.

So far we’ve seen a variety of responses. The Walt Disney Company resolutely announced its decision to pull out of certain countries altogether, including Bangladesh, until local standards improve. Others are weighing their options, which include remaining in problematic areas but actively engaged in efforts to ensure that local suppliers improve worker safety.

Ee need only consider what The Walt Disney Company has just accomplished.

Disney’s decision to cut production in five countries – Ecuador, Venezuela, Belarus, and Pakistan as well as Bangladesh – was well-covered in the media, a not insignificant public relations coup despite reminders that, since less than 1% of the factories used by Disney contractors are in Bangladesh, the corporate sacrifice, at least on that turf, may not have been particularly painful. According to reports, companies like The Gap and Children’s Place, presumably with more at stake in Bangladesh, were still mulling what to do.

Meanwhile, Disney seems to have taken a textbook communications approach. The company announced its decision two days after dozens of other companies, including Walmart, Carrefour, and Li & Fung, met with German government officials and NGOs to advance a plan ensuring safety at garment factories in Bangladesh. Intentional or not, Disney’s timing dramatically underscored its leadership.

Disney also aggressively directed its whole supply line to cut production in the five countries and nimbly let the world know it had so directed. Disney also provided a credible basis for its selection of which countries to disallow, advising that a World Bank report had guided its decision. To complete the balancing act, Disney told licensees that its decision not to disengage until April 2014 provided a transitional period that “mitigates the impact to affected workers and business.”

At the same time, Disney is also opting to pursue the alternative strategy of staying engaged in certain other countries ranked low in the World Bank report, including Cambodia and Haiti where Disney will do business but only with factories that participate in the Better Work program co-sponsored by the International Labour Organization and the International Finance Corporation. Should countries like Pakistan also participate in that program, they could be reinstated on the approved list. In 101 other countries, Disney will allow licensees to do business only if independent monitors approve the factories.

It is a balancing act indeed, but with real teeth and the potential to do some good. Disney did not draw up this battle plan overnight. It was obviously the product of much consideration inspired by a long series of tragedies around the world. Right now, companies like Walmart are proposing their own alternatives to the Accord on Fire and Building Safety in Bangladesh. Reactions have been mixed.

They may want to look a little harder not only at what Disney did, but how that company sold its strategy to diverse stakeholders throughout the marketplace.

REad More... http://www.forbes.com/sites/richardlevick/2013/05/30/bangladesh-and-beyond-walt-disneys-leadership/