Case Questions:
You are an international manager for a U.S apparel designer that sells to major U.S department stores and retails. Several years ago, your firm decided to have clothing sewn in India and Pakistan, which resulted in tremendous cost saving over having the work done in the United States. In making the decision, the firm considered its impact on U.S families who depend on the income from these jobs. It opted for the cost savings, seeing its responsibilities to produce a profit for shareholders as more important than its responsibility to provide jobs in the United Stated. Now, however, it finds that its contractor in India is overworking and abusing child labor in violation of internationally accepted standards for the treatment of children in the workplace. The Indian government shows little interest in policing its own labor practices. The sad story of the Indian national press.
What course of action should you take?
If you decide to discontinue working with sewing contractor in India, do you do so to protect Indian children, because of the adverse publicity in the United States, or for both reasons?
What do you expect the reaction would be from shareholders? From consumers?