Unit V Case Study: Textile Manufacturer Is Closing It

Unit V Case Study A Textile Manufacturer Is Closing Its North Carolina

A textile manufacturer is relocating its production from North Carolina to a developing nation in Southeast Asia primarily to capitalize on lower labor costs. Supporters claim the move optimizes market efficiency by leveraging competitive advantages associated with free-market economies and cost reduction strategies. Conversely, critics argue that the decision breaches ethical trust with employees and highlights problematic labor practices, including the use of child labor and substandard working conditions in the destination country. Local officials in Southeast Asia justify child labor by emphasizing the economic necessity for families facing extreme poverty, asserting that removing children from work could worsen their hardship.

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The decision of the textile manufacturer to relocate its production involves complex ethical considerations, rooted in the perspectives of deontological and teleological frameworks. The proponents who support this move are likely to lean on a teleological (consequentialist) perspective. Teleology emphasizes outcomes, and from this standpoint, proponents argue that the decision results in increased profitability, economic growth, and competitive advantage for the company. The potential for job creation in the developing country, along with lower prices for consumers, constitutes positive consequences that justify the move in their view (Singer, 2011). They believe that maximizing overall benefits—such as shareholder returns and global market efficiency—aligns with utilitarian principles, which assess ethical actions based on their net positive outcomes (Mill, 1863/2002). Furthermore, supporters may argue that economic development in Southeast Asia can lead to broader social improvements over time, aligning with consequentialist reasoning that considers long-term benefits.

Opponents, on the other hand, would be more aligned with a deontological (duty-based) framework. Deontology, as articulated by Immanuel Kant, emphasizes adherence to moral duties and principles regardless of outcomes (Kant, 1785/2002). Critics contend that the decision violates fundamental ethical duties such as honesty, trustworthiness, and respect for human rights. The use of child labor and poor working conditions in Southeast Asia contravene universally accepted ethical standards and laws safeguarding worker rights, making the move inherently unethical from a deontological perspective. Critics argue that a corporation has a duty to uphold moral principles and respect human dignity, regardless of economic gains or competitive pressures. They emphasize that exploiting vulnerable populations for profit violates duties owed to employees, consumers, and society (Crane & Matten, 2016).

The leadership style reflected in this decision appears to be primarily transactional, focusing on productivity, efficiency, and short-term profits. It underscores a results-oriented approach where organizational success is measured by immediate financial outcomes rather than ethical considerations. Such leadership may prioritize shareholder interests over stakeholder well-being, illustrating a utilitarian calculation that discounts the broader social implications. This decision could be perceived as a laissez-faire approach to ethics—where economic motivations override corporate social responsibility—potentially undermining organizational trust and reputation (Bass & Avolio, 1994).

In terms of organizational and leadership evaluation, this move could be viewed as a pragmatic response to competitive pressures. However, it risks damaging the company's long-term reputation and stakeholder trust if unethical practices—like child labor—are exposed publicly. A leadership committed to ethical standards and corporate responsibility would likely pursue strategies that balance profit motives with social accountability, fostering trust and sustainability. Therefore, while the immediate financial gains may seem favorable, the decision’s ethical implications might tarnish organizational reputation and stakeholder loyalty over time, affecting overall performance negatively (Schneider & Ingram, 2019).

The decision exemplifies a low to moderate level of corporate responsibility, primarily driven by economic considerations—maximizing shareholder value—without sufficient regard for social or environmental impacts. Corporate responsibility entails balancing profit-making activities with ethical obligations toward employees, communities, and global societies (Carroll, 1999). Moving production to exploit cheaper labor markets without ensuring ethical labor practices reflects a minimal effort toward social responsibility. A truly responsible corporation would implement stricter oversight and ensure fair labor practices, even in developing countries, thereby aligning business operations with broader societal values (Harvey, 2020).

References

• Bass, B. M., & Avolio, B. J. (1994). Improving organizational effectiveness through transformational leadership. Sage Publications.
• Carroll, A. B. (1999). Corporate social responsibility: Evolution of a definitional framework. Business & Society, 38(3), 268-295.
• Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
• Harvey, T. (2020). Ethical leadership and corporate responsibility in global supply chains. Journal of Business Ethics, 162(4), 711-726.
• Kant, I. (2002). Groundwork of the metaphysics of morals (H. J. Paton, Trans.). Harper & Row. (Original work published 1785)
• Mill, J. S. (2002). Utilitarianism (J. Bennet, Ed.). Hackett Publishing. (Original work published 1863)
• Singer, P. (2011). Practical ethics (3rd ed.). Cambridge University Press.
• Schneider, S. L., & Ingram, H. (2019). Ethical leadership in global organizations. Journal of Business Ethics, 155(2), 377-387.