Etch a Sketch case

Etch a Sketch case - BUS3 187 Section 7 Kepple...

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BUS3 187 Section 7 Kepple 9/15/10 Etch-A-Sketch Ethics Case 1. According to the Friedman Doctrine, it was ethical for the Ohio Art Company to move to production to China. Friedman believed that a firm should maximize their profits by making working conditions to the level required by law, and not beyond. If there was money left over, stockholders may make the decision to improve conditions. It was also ethical according to the utilitarian approach, where the action is determine by its consequences. In this case, by moving, there was a possibility for the company to have more good consequences than bad ones. The main reason for moving was to produce the Etch-A-Sketch toy at a substantially lower cost. The company was losing money because their sales were slow, so they had to decrease their prices. In order to gain a profit, they needed to lower overhead costs such as maintenance, plant, electricity, payroll, and to get out of paying for health benefits to US employees. They also were able to lower wages by a significant amount. Because of lower costs, the company was able to stay competitive with their product. Consumers could attain the product at a lower price. Also, by moving to China, it provided jobs for the Chinese. However, this move came with high social costs in Bryan, Ohio, where the most of the manufacturing took place. One hundred US workers
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This note was uploaded on 12/11/2011 for the course BUS 187 at San Jose State.

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Etch a Sketch case - BUS3 187 Section 7 Kepple...

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