Outline the issues the company might face

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Question - Mycroft Berhad, a furniture manufacturer has decided to close its factory in Nilai and move its operation to a country where they can employ workers at a substantially reduced cost. Closing the factory will result in the loss of 1000 jobs for local residents in Nilai but will result in an increase in profits for Mycroft Berhad.

a) Outline the issues the company might face with regards to its implied social contract. (Hint: You should explain whether there is an implied social contract, identify what groups or stakeholders are likely to be affected by the decision to close the factory in Nilai and whether the decision is likely to be seen as advantageous or disadvantageous to these groups.)

b) Briefly discuss whether it is a limitation of financial accounting that Mycroft Berhad can show an increase in profits when such an increase is a result of negatively impacting a particular group of stakeholders?

Reference no: EM133008553

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