A manufacturing company is faced to consider relocation to another country in the face of increasing production costs and declining profits. The primary cost drivers are those associated with labor–wages and benefits–and pollution control and safety requirements driven by stringent U.S. regulations. A consultant hired by the company has provided three relocation options with varying labor rates and environmental and safety regulations (all less stringent) which are more attractive to the bottom line than doing business in the U.S. The company, a major employer in several communities, is well aware that closing shop in the U.S. will have a major economic and social impact in those communities.
The three relocation options are Mexico—low wages, high turnover, low level of safety and environmental regulation, the Philippines—even lower wages, similar environmental and safety regulations as Mexico, or South Africa—better wages than Mexico and the Philippines, reasonable environmental and safety regulations. The Philippines would be the best choice for the company’s bottom line.
First, would you relocate? Second, if you choose to relocate where would you go and why?
The original case study can be found here:
<a href=”http://www.scu.edu/ethics/dialogue/candc/cases/relocation.htm” >The Case of the Plant Relocation</a>