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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41221
Experience:  Run my own successful business/contract law practice.
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Ethical and Business Standards

Customer Question

If your company plans to expand operations in a country known for human rights violations and sweatshop labor practices, what might you do to assure the media that the organization is committed to fair wages and running an honest, ethical factory? Would you consider choosing to open the factory elsewhere to prevent the media attaching the company's name to other companies that have abused and exploited the workers for cheap labor? Why would you make this choice?
Submitted: 6 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 6 years ago.
Thank you for your post.

Are you seeking an essay answer on this question?
Customer: replied 6 years ago.
No, I just need about a 250-300 word response.
Expert:  Dimitry K., Esq. replied 6 years ago.
Thank you for your follow-up.

If your company plans to expand operations in a country known for human rights violations and sweatshop labor practices, what might you do to assure the media that the organization is committed to fair wages and running an honest, ethical factory? Would you consider choosing to open the factory elsewhere to prevent the media attaching the company's name to other companies that have abused and exploited the workers for cheap labor? Why would you make this choice?

The easiest and simplest solution is to have the media actually tour the facility for themselves. Then the media itself can be assured that the factories, even if located in regions known for human rights violations, are being run in a responsible fashion.

In terms of choosing an alternative location, that is always a legitimate option. However that choice has to be analyzed based on possible cost savings in having the factory in that part of the world versus the possible loss of reputation, clientèle, and permanent brand loss stemming from the negative publicity. If the loss in revenue is fairly small, and less than the savings, it would be legitimate to keep the business and the factory in the new location.

The reason such a choice gets made is after a proper analysis of all data and metrics pertaining to the business. While in the short term, placing such a factory may cause a profit, the ultimate loss of the company brand may in the long term prove cost ineffective. Conversely, placing such a factory, if shown to actually remove the possible claims of improper utilization of workers may actually improve the brand and save money. It is all about analysis and marketing.

Good luck.

Edited by dkaplun on 11/8/2010 at 5:01 AM EST