Strategic Decisions case study
You work for a U.S.-based textile company struggling with overseas competitors that have access to low-cost labor. While you pay your factory workers $14 an hour plus beneﬁ ts, you know that a similar tex-tile mill in Vietnam is pay-ing its employees about $0.50 an hour, and the mill does not have to comply with the same safety and environmental regulations that your company does.
Although your mill is margi nally proﬁ table, the Vietnamese factory clearly has a cost advantage. Your CEO wants to move pro-duction to Vietnam where labor and compliance costs are lower, resulting in mill closure and employee lay-offs. Your mill is the only large employer in a small community.
Many of the employees have worked there their entire working lives. What is the right ac-tion to take for stockhold-ers? What is the most ethical course of action? Is there a conﬂ ict here?