Sustainable Strategies for the Textile Industry in Bangladesh

Abstract

Textile industry plays a dominant role in the economy of Bangladesh. It is the mother industry and the most important sector of Bangladesh in terms of production, export and employment. This sector has contributed around 12% to country’s GDP and has made 78% of total export earnings of the country. But textile mills in Bangladesh are not performing in a sustainable way. Corporate managers need to consider the social responsibility issues, economic sustainability and ecological issues in the strategic management process. Mill managers ignore the above stated issues several times and none of the strategies and policies would be long lasting and sustainable if those mills cannot effectively manage their environment and perform their social responsibility. A firm’s ultimate goal need not be just profitability; rather it should connect among society, industry and environment for its sustainable development. The present study aims at overviewing and analyzing the present scenario of social responsibility strategies of textile industry in Bangladesh. It also tries to investigate and evaluate the environment protection strategies, to examine and analyze the economic sustainability and financial strategies, to assess the strategic management practices and finally to formulate and implicate strategies for future sustainability of textile industry of Bangladesh. This research is based on both primary and secondary sources of data covering fifteen textile mills (sample mills) with 120 executives (corporate managers), 150 workers and 50 stakeholders. The data of five years have been utilized here to measure the performance of the sample mills with regard to social contribution, financial position and environmental condition and to test the hypotheses statistically. Hypotheses have been formulated to achieve the objectives of the study and major statistical tools i.e. correlation, chi-squares, multiple regression (SPSS), standard deviation have been used for testing it. Open-ended and closed ended questionnaire have been made for the purpose of data collection and in connection with the main hypothesis of the study, the thesis has been designed into six chapters. Cronbach‘s Alpha test was used to evaluate the result of the study. The result of the test shows that the value of Alpha is 0.984 which implies that the result of the test is highly reliable. The split half coefficient of the first part is 0.972 and that of second part is 0.960 which confirm the reliability of the result. The Guttman split half coefficient is 0.960 which also exhibits the same view. Actually textile industry’s approaches and choices should be sustainability friendly that means it should be socially responsible, economically viable and environmentally sound. But from the analysis, it has been seen that net profit had been increasing, on the other hand, social contribution of textile mills had been decreasing remarkably. From the analysis of stakeholders’ opinion, it has been also found that textile businesses were not responsible for the welfare of the community and the workers’ welfare also. But this ignoring tendency in discharging social responsibility of sample mills fosters labor unrests and creates unsustainable socio-economic condition of Bangladesh. In reality, sample mills’ social responsibility toward their workers, consumers, government and communities were not satisfactory during the study period. From the evaluation of social contribution of fifteen sample mills, it is revealed that net profit had been increasing during the study period but actual contribution of sample mills in the areas of heath care issues, sports, cultural issues, education support, and forestation etc. was rather going down remarkably. The social contribution by the fifteen sample mills was 0.813 percent of total net profit in 2010-11. It is also found that social responsibilities of sample mills regarding the payment of wages were not satisfactory. 53.33 percent of total sample mills pay minimum wages of Tk. 3000 to 3500 and none pays above Tk. 4000 per month during the study period for their workers. The minimum wages were not sufficient for the workers to maintain standard of livings as per market price and cost of living. This fosters labor unrest and unpleasant socio-economic condition. It is also observed that 82% of the total workers regarded cotton and fabric dust as the principal reasons behind major health problems. 44.66% of them claimed the huge sound menace, 29.33% of them defined dyeing effluent as major causes of health problems, 19.33% of total respondents claimed the lack of pure drinking water and 19.33% of them claimed the inadequate number of latrines as the principal reasons of occupational health hazards. According to the stakeholder’s opinion about sample mills’ responsibility toward consumers, it is found that 42% of total stakeholders opined that textile business discharged minimum responsibility and 20% of them told that they did not perform any responsibility to the consumers in Bangladesh. The other purpose of this study is to investigate and evaluate environmental protection strategies of sample mills. After evaluating this scenario, it is found that textile business did not discharge their environmental responsibility properly. This study reveals that only 66.66% of the total sample mills did not have any eco-tex certificate and 66.67% of the overall sample mills were not certified by OHASAS-18001 standard. It is also revealed that 93.33% of total sample mills had adopted pollution control strategy instead of taking pollution prevention strategy. Only 13.33% of total sample mills had taken initiative for product recycling strategy for sustainable use of cotton and only 80% of them did not follow cleaner production strategy. Forty percent of total stakeholders (fifty) opined that textile business discharged minimum responsibilities to the environment and 20% of them exposed that textile mills did not perform any responsibility to the environment. The purpose of the study is to examine the characteristics of social responsibility strategy, environmental strategy, and economic sustainability and financial strategies in the sample mills along with its impact on overall performance of the sample mills. Financial position and performance of the sample mills have been critically evaluated through some important financial indicators i.e. liquidity ratios, leverage ratios, activity ratios and profitability ratios. This analysis revealed that most of the sample mills had achieved the standard for fixed asset turnover ratios during the study period because they had got capability to utilize its fixed assets in generating sales. In case of inventory turnover ratios, all the sample mills had reached the reasonable norms. The sample mills’ profitability position is good. Every company should earn profits to survive and grow but the management of a company should not aim at maximizing profits only through violating the legal rights of customers, employees, suppliers or social and environmental consequences. Various industry external (uncontrollable) factors as well as industry internal (controllable) factors were analyzed. Factors of industry’s external environment have been identified through socio-cultural, political-legal, social responsibility and ecological, economic and technological factors analysis, and industry’s internal environment factors have been identified through management control, marketing, financial and accounting, production factor analysis. It is revealed from this analysis that social issues, ecological issues have had adverse impact on textile mills’ production and on the overall performance of textile industry in Bangladesh. Besides, it is also revealed that they have poor investment for their technological modernization. As a result, mechanical breakdown and problematic machinery have caused low productivity and high cost of production. It is found that strategically lackings in each step have had negative impact on sustainable development of textile industry. The success and growth of any modern organization depends mostly on its external and internal polices and strategies of management, and the importance of it, are increasing tremendously in the face of growing complexity and severe competition. In this study it is apparent that strategically lackings are main cause of multifarious problematic issues of this industry and are the major hindrances on the way of sustainable development of textile industry. So, owners and corporate level managers and government policy makers need to implement sustainable strategies. The growth of this industry entirely depends on how well the textile mills are being managed and to what extent their efficiency level can be increased. This study reveals that mills’ management can improve their efficiency through selection and implementation of sustainability friendly and environment friendly strategies.