Assigned: May 27, 2015

Recent economic conditions have caused business leaders to make hard decisions regarding their companies so they may remain competitive or become competitive in light of our global economy and in light of current world events. Sometimes the decisions are not easy and may also affect employees, stockholders, suppliers, and people in the community.
You have recently inherited 52% of a small textile company in Snowville, Vermont, from Uncle Fred who much admired you because of your MBA and law degrees. Snowville is a small town of approximately 25,000 people located about 75 miles from the state capital. The company, Bird’s Unlimited, sells men’s shirts to upscale stores and employees about 2,500 people.
Upon attending your first board meeting, you learn competition and the U.S. economy has seriously affected Bird’s profits and there is a possibility the company might have to “go in a different direction” – layoffs, closing, relocation, sale, selling cheaper goods, cutting salaries, diversifying, and/or other avenues, all to be determined. The employees are non-unionized and very loyal to the company, many of whom have worked their entire lives for Bird’s Unlimited.
Your company manager, Andrea Bocelli, indicates the company can increase its profit margin by importing shirts from China where you can hire women and children for $200.00 a month. (It is a possibility that some of these foreign factories may “ignore” the rights of their workers, although you are unsure of this information.) Snowville is a very patriotic area and this action will not be well received in the community. Further, you might be accused of engaging in exploitative labor practices – although $200.00 per month might be significantly better than what the average Chinese employee earns in other towns or cities, or even in other impoverished countries. You are aware, of course, that doing business in a foreign country requires following their local customs, laws, and policies.
Finally, Andrea informs you importing products from China may necessitate laying off about 30% – 35% of your work force on either a temporary or permanent basis, depending on future sales. See partial conversation between Andrea and yourself stated below:
Andrea: “What I propose (by reducing the workforce by 30 – 35%) is downsizing. Downsizing is our decision to reduce the work force for reasons other than poor performance, criminal conduct, or unethical behavior on the part of those being let go. There is nothing wrong with making a difficult task easier to bear. In fact, there are good reasons for doing so. It is not an ethical decision – just a good business decision.
Yes, downsizing has legal implications, and it is understandable that we may want to minimize our liability when we downsize. Yes, there are also economic matters to consider, which makes downsizing a management issue. But at its core, downsizing is not an ethical issue as a good manager is concerned with protecting the company’s financial and legal interests. Therefore, we will tell our employees we are just downsizing in these difficult economic times.”

After hearing Andrea’s comments, you decide to take a trip to Shanghai, China to see if the idea of importing goods from another country has merit for your company. You are met by Mr. Olsen, an American who lives in that country, who informs you:
“You can seriously increase your profits by doing business here. However, you should not inquire as to the standards or hours worked in their factories and you may need to give some money to certain officials to avoid government involvement in your contracts or business.”

You are shocked at his comments, but do not inquire further. You tour a local factory and observe nothing wrong nor do the working conditions appear unusual. (You observe men, women, and some children working, but the legal minimum age for employment in China is sixteen years.) You return to Snowville.
You have the ultimate decision. What should you do? Discuss fully. Use your every day experiences, the textbook and other resources, if necessary. What factors should Bird’s Unlimited consider? What obligation does the company have to its stockholders, board, community, employees, suppliers, global market and to its bottom line? Are there other solutions, which could alleviate some of these problems?
Write a paper giving your opinions, thoughts and solutions. Be logical and organized. The paper must be typed with an appropriate font, doubled spaced, and one-sided. A bibliography, including cited cases (if any), newspaper articles, books or other publications, indicating sources, must be included. Do not directly cite the Internet. The paper must be six (6) to nine (9) pages with a minimum of six pages, plus the bibliography. The paper is due no later than the last day of class. There will be no extensions on the due date!
Please note there is no specific right answer to the issues raised. You may see solutions different then I do; that does not mean you are incorrect. Look for concepts, such as contracts, business-relationships, business entities, legal and/or moral obligations, governmental regulations, common law and civil law systems, global conditions, international law, which are covered in the textbook or in other sources. Explain why you choose a particular path or solution so the reader is aware you considered the alternatives. Where necessary, provide specific solutions in your paper.
Additional suggestions: I will also provide business ethics’ materials (see Chapter 2 in our textbook). As a starting point, choose a major international corporation such as Dell or HP and go to their website. These corporations (and many others) will have mission statements, policies and other materials as to employee conduct, international conduct, and ethical business procedures. Do not assume because these two global corporations have specific policies, they are applicable to our paper or that they have the right solution. It is, however, a starting point. Also, recent articles have suggested market forces have dramatically increased employee salaries in China (and other foreign countries) and the notion that all foreign factories are low-tech sweat shops and/or operate under oppressive working conditions may not be acurate.
Remember, I have to read your paper. I do not need to read your first novel. For example, if you can provide the proper solutions in six pages versus ten pages, please go for the lower number. If you have any problems or concerns, please contact me.
You may wish (it’s your choice) to determine what the “average” factory worker makes in your state. Consider minimum wage beginning employees, custodial, clerical, factory line workers, supervisors, and administration. I will accept any reasonable figures you may use. Then, you can estimate what the average worker will make in China. Also, as indicated above, salaries have significantly increased in China. Try to be creative in your final decision. I have referred to the salary of the Chinese worker in U.S. currency; it is more likely the employee will be paid in Chinese currency which may not equal $200.00 per month. You may determine the currency amount.
As a separate issue assume you have been told a Chinese company that desires to form a joint venture with your company and “run the business”, has a reputation for bribing local officials to ignore labor and environmental problems. These “problems” consist of long work hours and the release of chemicals used in the dying of cloth into local rivers. The company admits to the bribes, but promises it will comply with local labor and environmental laws. it states bribes are necessary and expected by the officials otherwise the business will be “harassed by the local government”.
Your paper should present a Business Plan (there are numerous business plans online). Choose a simple free business plan. Do not pay for it! Adapt it to your solution(s). We will discuss the specifics in more detail in class. Also, I suggest we meet or communicate about your paper at an earlier date as to your progress on this important assignment.
Due: Business Ethics Paper due by Wednesday, August 6, 2015 by 8:00 p.m.