Critical Juncture 2: Labour Rights Exposé
Context
An investigative journalist disguised as a factory helper has just released a documentary called “Threads of Deceit.” Hidden cameras show children as young as 13 sewing linings under dim lights while older workers coach them to hide during surprise inspections. The report includes forged paperwork showing falsified ages and overtime logs. An interactive map flashes across the screen, connecting Golden Needle Ltd. (a tier‑two supplier) to STG’s Gazipur factory and to a well‑known European retailer. Golden Needle Ltd. is a tier‑two subcontractor that supplies linings to STG’s Gazipur factory; STG does not directly employ Golden Needle’s workers, which complicates oversight.
Within hours, #UnravelSilkThreads trends on social media with millions of views; high‑profile activists and celebrities call for a boycott. A screenshot of the company’s share price shows it tumbling 12 % since the story broke. Simultaneously, an official from the Bangladeshi Ministry of Labour tweets that it will launch a formal investigation. The exposé not only jeopardises STG’s reputation; it opens the door to potential regulatory action, casting doubt on every link in the chain.
Adding to the pressure, the U.S. Department of Commerce has just confirmed a 15 % U.S. tariff on imported finished textiles from Bangladesh. The change threatens to upend already-fragile logistics and pricing models for STG and its partners, complicating decisions on how—and where—to rebuild trust in the supply chain.
Task
Decide how STG should respond to the child‑labour revelations, balancing worker safety, transparency, operational continuity and new 15 % U.S. tariffs while safeguarding shareholder and customer confidence and supporting underage workers.
Options
Explore the strategic response options available to STG following the Golden Needle revelations. Select a tab to read each option’s approach and trade-offs.
- Option 1
- Option 2
- Option 3
- Option 4
- Option 5
- Option 6
- Option 7
Option 1: The Clean Cut
“Slice fast, show the world the wound, then start to heal.” STG severs all ties with Golden Needle in a live-streamed board announcement. Drones film boxes of unsold linings being trucked to recycling while auditors in high-vis vests fan out across Bangladesh.
Trade-offs at a glance
- 📈 Rebuilds trust through radical transparency.
- ⏳ Delays up to 20 % of EcoLux output and increases costs via tariffs and emergency re-sourcing.
- ⚖️ Could harm workers if alternative livelihoods and education aren’t arranged.
Option 2: The Shadow Inquiry
“Fix the engine under the hood while the car keeps moving.” Golden Needle is quietly suspended; STG launches a discreet investigation under NDA. Official statements are calm, but encrypted group chats buzz deep into the night.
Trade-offs at a glance
- 🤫 Buys time and allows due diligence without a public panic.
- 🕳️ Strict NDAs reduce leaks but any leak could destroy trust.
- 👷 Suspending Golden Needle should include continued wage payments while facts are gathered.
Option 3: The Deflection Play (Coalition Call)
“It’s not just us—child labour is endemic in the industry and requires collective action.” STG issues a polished op-ed blaming systemic problems and pledges collective action. Behind closed doors, the design team keeps the sewing machines running.
Trade-offs at a glance
- 🛡️ Protects the short-term timeline and deflects some scrutiny across the industry.
- 🔥 High risk of social-media backlash and retailer suspensions.
- 🎯 Could engage regulators and peers on broader reforms, but lost U.S. sales under the 15 % tariff will hit harder.
Option 4: The Partnership Pledge
“Stay, repair, transform.” STG invites Fair Wear Foundation and Global March to co-design a corrective-action roadmap. Mr Karim signs a public letter; child workers are enrolled in nearby schools.
Trade-offs at a glance
- 🤝 Positions STG as an industry reformer through co-designed corrective action.
- 🐢 Slow remediation means violations could persist during rollout.
- 🔓 Partnerships may unlock vetted suppliers and training programmes to offset future compliance costs.
Option 5: The Human Dividend
“Pay the debt, empower the future.” STG announces a €1.5 million education fund for the affected families while keeping Golden Needle on probation. The fund is paired with a transition plan to move children into school and provide jobs or training for adults.
Trade-offs at a glance
- ❤️ Directly aids victims and creates positive emotional resonance.
- ❓ Risk of being seen as hush money if not accompanied by structural change.
- 💸 Scholarships plus tariffs strain liquidity; pair the fund with a transition plan for affected families so children enter school and adults receive training.
Option 6: The Ledger Lens
“Turn every seam into a data point.” STG partners with a blockchain start-up; QR codes reveal each garment’s origin in real time. Orders pause for six weeks while factories install scanners. The roll-out could start with high-risk suppliers first to reduce the six-week pause, gradually expanding to all factories.
Trade-offs at a glance
- 🔍 Sets a new bar for traceability; appeals to digital-native consumers.
- 🕑 Roll-out can start with high-risk suppliers, but overall downtime and learning curve remain significant.
- 🪙 Up-front tech spend deepens the tariff-driven cash crunch.
Option 7: The Takeover Gambit
“If the house is on fire, buy it and rebuild.” STG acquires Golden Needle, swaps the management team, and erects glass-walled classrooms beside the production floor. Headlines read ‘From Sweatshop to Flagship.’
Trade-offs at a glance
- 🏗️ Full control over labour standards and potential integration of ethical training and compliance.
- 🚧 High capital expenditure and integration risk; leverage and covenants tighten.
- 🎓 Acquisition includes support and training for workers and families but spooks the board’s risk committee due to cost.
Decision
After carefully reviewing the options above, your team must now choose the response strategy that best aligns with STG’s objectives and values. Select one option below to record your decision.