The Problem: The Case of the Overseas Suppliers As you begin moving forward on y

Question

The Problem: The Case of the Overseas Suppliers

As you begin moving forward on your products, you are always on the lookout for high quality, organic, inexpensive herbs to include in your product. You have found a supplier in the mountains of Northern India who can give you a good price on excellent herbs. The contract would provide that this partner would be an exclusive supplier of a wide variety of herbs which are grown in India. The supplier would contract with local farmers for the herbs, work with them to guarantee quality, and would assure the herbs were processed in accordance with your quality control standards.

The only difficulty is that you have found out that child labor is used in the cultivation, harvesting, and processing of these herbs. When you raise the question, your supplier indicates that because the farmers are very poor, having the entire family work the fields is essential for them to reach even a threshold level of sustenance. As far as the children in the processing plants, the children are never under the age of 10. The jobs are prized because working in these kinds of plants gives whole families increased wealth.

The price you will pay for these herbs under this agreement is very competitive. By accepting this contract you will be able to keep your price very low and maintain your competitive advantage.

This question explores whether American companies have any obligation to work for international labor justice. While low wages for adults are problematic, even more problematic are low wages and possible indentured servitude for children.

The Greatest Good

In three to four coherent paragraphs, compare and contrast your options using the Results Lens. In the process, consider the following questions:

Influence Factor: Given that different stakeholder groups are affected in different proportion, determine the impact that the decision will have on various groups?

Criteria for Happiness: What are the criteria for happiness for the various stakeholders? In considering the criteria, determine what options may be "deal breakers" and what factors might be "tipping points."

Units of Happiness: How many "utils" of happiness do each option provide to each stakeholder?

Greatest Good: Determine which option creates the greatest good for the greatest number of people.

Explanation / Answer

Given that different stakeholder groups are affected in different proportion, determine the impact that the decision will have on various groups?

The issue here is that the company is getting supply of raw materials i.e. herbs at a cheaper rate and this will lead to reduction of price of the final product. However, the supplier makes use of child labor in their organization. This is against the legal restrictions that have been developed in order to prevent child labor. The company has to decide whether it will get the herbs from the Indian company or not. If it takes the supply of herbs from the Indian company then it is encouraging child labor but if it does not do so, it will miss on an opportunity to earn huge profits and increase its market share.

A stakeholder is a person who is relatively involved in the business or whose interests may be affected directly or indirectly by the execution of the contract. In the given scenario, the stakeholders to be taken into consideration are the workers of the Indian company and also the company itself. The execution of the contract to take the supply of herbs from the Indian company will be beneficial to the company as it will get herbs at a cheaper rate and be able to earn more profits. It will also be beneficial to the workers of the Indian company as getting the contract will mean that they will earn more wages. However, it will also mean that the children who are working in the Indian company with their parents will be burdened with work, leading to more exploitation of children.

The cancellation of the contract will be harmful for the company as well as for the workers of the Indian company. It will be loss for the company as well as lead to lack of wages or income for the workers in the Indian company.

What are the criteria for happiness for the various stakeholders? In considering the criteria, determine what options may be "deal breakers" and what factors might be "tipping points."

The criterion for happiness for the company is profits, for the workers it is wages, for the customers it is good quality products. The deal breaker may be the fact that the company is taking raw materials from a company that is indulging in child labor. If the company takes the initiative that it will not give business to an organization that practices child labor then it will be a step towards stopping child labor. The practice of child labor cannot be justified and it needs to be stopped immediately. If the companies from developed countries like America keep given business to organizations of developing countries like India for profits and overlook the fact that they are encouraging child labor then we will never be able to overcome the hindrance called child labor. The bigger change can be brought only by taking smaller steps like this. I believe that the company should not give business to a company that uses child labor. If the child labor is removed then the business can be done between the two companies.

How many "utils" of happiness do each option provide to each stakeholder?

The profit earning aspect will give happiness to the company but there will be greater happiness in ensuring that the child labor is removed from the company with which they are doing business.

Determine which option creates the greatest good for the greatest number of people.

The option of greatest good for the greatest number of people is that the Indian company should not use child labor at all in order to supply the herbs to the company. In return the company should ensure that the children of the workers are educated properly and they get the skills that are required for them to be employed later on as adults.

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