Question

You are the owner of WC Progressive Products a manufacturing facility located in the Midwest. Your grandfather started the company in the early 1930’s. Your family has owned the company since its inception. WC Progressive Products has survived the Great Depression, Two World Wars, and several downturns in the economy. Throughout the various business cycles and hardships, you have been able to keep all your employees on-the-job without resorting to permanent or temporary layoffs. You employ between 500 – 700 people from the local area, depending upon the season and the demand for your product [fyi: at this time, you can identify the type of product]. WCPP has had a significant impact on the local economy. The general population in the surrounding area has been very loyal and supportive of the company during good and bad times.

Throughout the years your family has made an effort to invest a good portion of the profits into the maintenance of the structure. However, it seems that the amount of investment was not enough. You just learned that the facility does not meet contemporary safety and environmental codes. Your accountant informed you that bringing the facility up-to-code would mean that you would have to spend your entire projected profit margin for the next ten years. You would have the necessary funds to operate the business and employ the workers at their current salaries, but the expense of updating the facility would prevent you from investing in research and development of new products or offering your employees any raises during the coming decade. What you are facing is a very serious challenge, not only for you as a business owner, but also for the surrounding community.

Recently, your company attorney has made you aware of a proposal from the country of Valhalla. The Prime Minister of Valhalla wants to discuss the possibility of moving your operations to a specific location in their country in order to help boost the economy of that region. The Prime Minister has promised the following benefits:

Valhalla will assist in the cost of construction of the new facility.

There are no environmental rules and regulations that you must follow.

The local population is eager to work; however, you learned that they have no experience in your specific industry.

The cost of labor is equal to 30% of the labor cost in the U.S.

The offer is very tempting, but you are torn. What is bothering you is the potential devastating effect that the loss of WCPP will have on the local economy and the people who live in the area.

The Prime Minister of Valhalla requests an answer within 30 days. WHAT WILL YOU DO?

Make a list of all the reasons you should go (be very thorough and detailed).

2) Make a list of the reasons you should stay (be very thorough and detailed).

3) Are there other options beside going or staying?

4) Based on chapter and lecture content covered to date, discuss the issues that you need to consider if you go and if you stay.

5) Decide what you will do, and explain your decision in detail.

6) Explain how you will notify the employees.

7) What will you say if you stay? What will you say if you decide to move the facility? Write a clear statement directed to the employees explaining your decision.

Answer 1

Answering the first 4 questions as per Chegg Guidelines:

1. The reasons why the proposal of moving to Valhalla can be considered are:

• Cost of developing the facility can be easily managed: The Government of Valhalla has proposed that the country will assist the company in construction of the facility.
• Labor cost is quite cost effective: The labor cost at Valhalla is 30% of the total labor cost of US
• No environmental rules and regulations to be adhered to, hence no extra overhead involved
• Easy availability of labor: At Valhalla, the local people are easily available and can be employed at the facility

2. The reasons why the proposal of moving to Valhalla must not be considered are:

• Lack of skilled labor: Though there is abundant labor at Valhalla, the labor lacks the skilled expertise. Hence the company will have to afford extra overhead for training the employees.
• No environmental rules and regulations may lead to ineffective business processes in the region. The environment may degrade and hence the company will suffer in the long term.
• Leaving the existing facility and labor may prove detrimental for the overall performance of the company.

3. The company may opt for opening a unit in Valhalla. The skilled labor from US facility can go and train the available labor of Valhalla. The company can also maintain its legal and ethical compliances at Valhalla. This can be considered as a viable and favorable option for the company.

4. The issues which must be taken into consideration before considering the option of staying or going to Valhalla are as follows:

• The government regulations
• The expenses of moving business to Valhalla
• The cost involved in conducting the legal formalities of business
• The damage of employer branding and goodwill of the company, when the company decides to move to Valhalla