“Business Cycles and employment practices”
Byrne, Keely and Detert, Jim. “Business Cycles and employment practices in the Garment Industry.” Business Roundtable Institute for Corporate Ethics. BRI-1002A (2005). 8 Sept 2008. http://www.corporate-ethics.org.
The case involves a small, niche company in the garment industry. The company has USA-based manufacturing operations and is recognized in the industry for responsiveness and a stylish product offering . The skill level and high engagement of the production workforce is a significant contributor to the company’s competitive advantage. The company has historically treated the associates well and has developed an unwritten set of values that includes ‘valuing all associates as partners’. The company is growing and will need to add production capacity.
Prior year company sales were $80M and the forecast for the coming year is $150M (187%). The increased output is enabled by adding 1,000 workers to a second shift. Total production employment will thereby increase to 3,000; up 50%. The initial ramp up of operations is effective and the company is over-producing to the market requirements. The management team has determined that a 33% reduction in output is required over the winter months to avoid an excess inventory situation. It is expected , however, that the volume in the spring season will rebound and that the ramped up capacity will once again be required.
The management team needs to develop a revised production plan that will support the company’s financial objectives and comply with their espoused ‘human resource’ values.
- How would you describe the ethical dilemma?
- What solutions would you offer the management team that would allow them to be true to their ‘core values’?