Posted: November 27th, 2013


Question 1

Ohio Art Company moved their production to China on business basis rather than on an ethical basis. They were making loses and they did not want to lose the company entirely. For this reason, they had to find ways of minimizing the costs as much as possible in order to maximize on the profits. It was not ethical at all for the company to move its production to China. They aimed at making as much savings as possible. The labor costs in China were much lower than the costs in Ohio, U.S.A. as the workers in China made $75 a month while those in Ohio made $1500 within the same period. On top of that, health cover and pension was not provided for most of the workers in China as for workers in Ohio. The company was not interested in the interests of the workers but rather it was more interested in saving the company no matter the price or consequences.

However, the company benefited in terms of saving on the production costs and other overheads. As Killgallon put it, the main savings were gotten from the lower overhead costs rather than the lower wages. These included electricity, maintenance, plant, and payroll costs. They also saved as they were under no obligation of providing health benefits to the workers. Although the workers in Ohio were expecting the closure of the company since the company had slowly moved some things to China, they still felt the pain and the sorrow when it was finally closed down. They had come to know the company as their family and now it had finally been closed down. Many of the workers were from Ohio town and so they were like family to the company. Unfortunately, the closure of the company led to the loss of their jobs, which caused both emotional and financial distress.

On the other hand, it was beneficial to the company and the workers of China. Although they were not working under the recommended working conditions, they were accorded employment. The company also got to save on the costs and the whole company in general under the leadership of Kin Ki. Although it was not any easier, the closing down of the company in Ohio was not done based on an abrupt decision and it did not come as a surprise to the employees. The company had prepared the workers psychologically by making a few changes at a time. Although it was unfair to the workers, something had to be done in order to save the company and the management made a decision of taking the business to China.

There was a possibility of the company completely closing down if production could not have been moved. This is because the production cost was the same but the income was not enough to compensate the costs. On the other hand, the company could still have looked for other strategies of reducing the production costs or raising the sales. For example, they could have incorporated more advertising techniques in order to increase the sales. If the company was completely down, they could have merged with another company or asked another company to cover it before it got back on its “feet”. After all, it was under Kin Ki in China and not as Ohio Art Company. Indeed, not all options were reviewed. The people of Ohio did not have to lose their jobs.

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