question archive The Operations: To be or not to be outsourced, that is the question? Platinum Industrial Enterprises ("PIE"), a manufacturing company headquartered in Florida, was faced with a critical decision that affected its long-term survivability
The Operations: To be or not to be outsourced, that is the question? Platinum Industrial Enterprises ("PIE"), a manufacturing company headquartered in Florida, was faced with a critical decision that affected its long-term survivability
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The Operations: To be or not to be outsourced, that is the question?
Platinum Industrial Enterprises ("PIE"), a manufacturing company headquartered in Florida, was faced with a critical decision that affected its long-term survivability. The decision was necessitated by a recent rules promulgation by the EPA which lowered the amount of acceptable discharge in public waterways. The change was the result of enormous political pressure and compelling evidence linking certain discharges to significant health problems for citizens residing near PIE's plant. Taking effect in 6 months, the new regulations would substantially increase PIE's operating costs.
Joe Schmo, the CEO, was in deep thought in his office about how he would deliver the bad news to his board of directors when in walked Jerry Easyrider, the executive VP who had just returned from a business trip to MoLand, a country off the coast of Africa. Hearing the news from Joe Schmo caused Jerry to remember that while he was visiting MoLand, he had passed a boarded-up plant and when he asked his driver what it was, he was told it was formerly the home of Spirits Galore, which had closed its operations because of financial difficulties. Based on his previous business travels to MoLand, Jerry understood that the country, particularly in the more depressed areas, had few if any environmental safeguards in place and companies were largely free to operate as they pleased with respect to environmental concerns.
Joe and Jerry agreed that it would be worthwhile for Jerry, along with a team of experts, to return immediately to MoLand to check out the plant firsthand. Upon his return to Florida, Jerry briefed Joe and informed him that with minimal expenditures, the plant would be a good location for the company's Tavor operations, the division affected by the EPA change, and further that it could be staffed quickly using the displaced workers from the former owner.
When asked about the environmental issues, Jerry indicated that he had been assured by officials at the highest level of the government that if PIE brought jobs to the country, it could do whatever it wanted environmentally. This seemed too good to be true, and Joe asked Jerry if he were sure on the environmental issues because he noticed a bit of uneasiness. Jerry indicated that he was sure about the environmental issues and was only hesitating because the most cost-effective operations would have the plant discharges flowing into waterways that primarily affected nearby impoverished and minority communities.
Joe Schmo is now torn and does not know what to do. If Joe Schmo consulted you for advice, what would you advise him regarding the move? In your advice to him, identify and discuss the ethical dilemma, related ethical issues, and relevant stakeholders. Would you recommend the move and why or why not?
