Reference no: EM133426073

Use the company created in the "Team Charter and Company Creation" assignment for your Team Projects. You will keep the same company and same group members throughout the semester for all the team assignments.Your assignment for this dilemma is to address the following business situation in a page memo to the Board of Directors for your company.

Background:

Your business has been successful for a number of years now, particularly your manufactured products. Your competitive advantage is the low cost and good quality of your products.

You have learned that one of your key suppliers located in a third-world country has been hiring laborers under age 16 and requiring them to work in their factory for more than 40 hours per week. This factory has consistently met your quality requirements and sent products on time. The ethical dilemma for your group is whether to continue with the supplier or not.

Assumptions:

You assume the country that the 16-year old works allows minors to work, in other words, it's not a legal issue.
This factory also works with other businesses - they are not exclusively working for you.
The conditions in the factory are safe, as far as you know.
Your supplier is not breaking any other laws of its country that you know of.
It is not your factory, the factory is owned by the supplier. (IOW - you can't change the factory's rules/hiring practices)

How will the public react (media, customers, investors, etc.) if they know you have a bunch of children working with your supplier?
How will quality and prices be affected from your decision?
What if your factory hires children so they can make money to provide for their family, buy an education, and stay off the streets and away from gangs?
What are your responsibilities to your customers, investors, and other stakeholders?
Do other major companies use foreign labor? Do other major companies have strict policies against foreign labor?

Assignment;

What should you do? You must make a decision either to stay with the supplier or cut them and find a new one. Once a decision is made, discuss the consequences of your decision while providing justification. "We chose to do "this", because of x, y, and z."

*Remember that the assignment is not to negotiate with the factory or come up with new company programs to counter-act the child labor that is occurring overseas. Remember that your resources are limited as a company. Simply creating a charity, scholarship fund, or cause-related marketing campaign can be extremely costly. Per the assumptions, you are not in a position to change anything about the factory. You must decide whether to continue with the supplier or not. Most of this paper will be discussing ramifications of one of those options.