A Case Study in Sri Lanka : Problems and Possibilities for Sri Lankas Textile Industry

Abstract: The competitive advantages of Sri Lanka's garment industry, and how these can lead to increased trade with Swedish companies, were examined through a study divided in two main parts. The research was carried out with a focus on the labour force and the social aspects of CSR. It was initiated in Sweden, where the goal was to investigate how Swedish companies select suppliers and what their requirements are in terms of code of conduct and social responsibility. In the following part of the study we examined the corresponding parts of Sri Lanka's garment industry. To identify the competitive advantages and potential problems, we conducted a study on three different factories in the country, where the owners, managers and workers were interviewed. To further expand the survey results we also interviewed additional stakeholders to the industry. In this case a trade union and an organization working in the garment industry. The collected data were analysed using selected parts of Porter's diamond and Carroll's CSR pyramid, as well as the Swedish companies' demands on the social aspects of CSR. In order to identify these requirements, interviews were conducted with four different people at the Swedish companies. We were also given access to documents with their code of conduct. Through our analysis we are able to identify the competitive advantages that exist within the industry. In addition to that we are able to identify the areas of the industry where problems exist today, but where Sri Lanka has the opportunity to strengthen its competitive advantages in order to become a more attractive partner for Swedish companies.