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One  of the ways a firm can improve its profit picture is by reconsidering  its location. Different locations affect the cost of labor, the  regulatory environment in which the firm must function, the tax burden  imposed as a cost of doing business in a particular locale, and  consequently, the value of the firm to existing and prospective owners.

One  of the ways a firm can improve its profit picture is by reconsidering  its location. Different locations affect the cost of labor, the  regulatory environment in which the firm must function, the tax burden  imposed as a cost of doing business in a particular locale, and  consequently, the value of the firm to existing and prospective owners.

CONCEPT REVIEW:   Having a clear resource that spelled out the correct  ethical behaviors for a business would be ideal. Unfortunately, no such  guide exists for the hypothetical tire company, Smooth Ride. Instead, we  need a practical method for thinking carefully about business ethics.  Study the WH framework for business ethics, focusing especially on the  role of values and the classical ethical guidelines that activate this  framework.

Mini-Case:   Use the decision making process taught in this  chapter to create a socially responsible ethical decision for Smooth  Ride. They know that whatever they do, they will displease people they  do not wish to disappoint. Yet as with all tough ethical decisions, they  have little choice but to make a decision that will allow them to  thrive, while being true to their ethical vision.

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Smooth Ride Tires is experiencing economic hard times. Their current  revenue stream is simply not covering their costs. Although the  management of Smooth Ride has not made a definite commitment yet, they  are leaning toward moving their facilities to Honduras. The reasons are  many. The labor force in Honduras, while not as well-trained as the  American workforce, is almost half as expensive. In addition, the  Honduran government has promised that soldiers will be used to stop any  effort by the Honduran workforce to organize a union. Finally, the weak  environmental protection laws in Honduras will provide a much friendlier  production environment for a manufacturing process that is often  “dirty.” The daughter of a major stockholder is threatening to go to the  press to “expose” the motivations of management. How should management  respond if it is going to live up to its image as “one of the most  ethical firms in the modern marketplace?”

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