1. The key ethical issue of American clothing company.
a) The key ethical issue of American clothing company is it has to do something to meet the losses in slack sales periods caused by too many workers such as layoff. However, such behavior is deviate from the company’s fundamental tenet for this company take the concept that apparel manufacturing should treat worker as well as possible.
b) Reasons for such ethical issue are 1) it is the company’s inception that it should treat employees well, so it is intolerable for the behavior of layoff, but 2) the reality force has to do something to cover the loss. Therefore, American clothing companies must make a balance between such conditions.
2. Two critical stakeholders of American clothing companies and how they are affected.
a) Two critical stakeholders of American clothing company are employees and shareholders. Employees should be considered as critical stakeholders because their profits can be affected no matter American clothing company lay off them or not. At the same time, shareholders’ profits can also be affected as well; hence it is considerable that shareholders are also the stakeholders of American clothing company.
b) When the company lays off their employees, 1) for employees, which means employees lose their economic sources, and have to find another job for survival. 2) For shareholders, if the company loses its reputation for layoff, their potential profits can be affected because the next year’s order may reduce for such behavior.
When the company do not layoff, 1) For employees, their can still get money for the company and do not have to worry about losing job, their profits are guaranteed in some degree even though their salaries may be reduced because of less orders. 2) For shareholders, keep so many employees means loss for the company, therefore, the shareholders’ profits absolutely reduced.
3. Top 5 facts in the case and how they impact the ethical issue.
a) Top 5 facts here are: 1) it is normal that apparel companies will lay off their employees when in the period of slack sales. 2) American clothing company shares high reputation in the aspect of its employee polices for its tenet is profit should not established on the basis of exploit. 3) American clothing company cannot afford so many employees between October and March if it does not lay off their employees. 4) American clothing company will lose its reputation if it chooses lay off their employees. 5) American clothing company has no time to guarantee the train next year if it lay off their previous employees.
b) The impact of such facts can be list as following: 1) for the popular activities in apparel industry, American clothing will be affected by such industry standard therefore 2) their reputation may be damaged even its tried best to keep pace with employees’ right, 3) however, if American clothing company still hire so many employees at the slack sales period, it is hard for this company to operate normally, 4) the sales as well as the profit will be effected by such scale laying off workers when unnecessary, 5) and it is hard for American clothing company training so many workers at a short time. Based on such facts, American clothing company sink into an ethical dilemma for the activity of layoffs is deviate from their operation concept, but they have to do it for the reasons of profits.
4. 2 options, which will solve the ethical dilemma.
There are two options I can choose to solve the ethical dilemma:
1) a) Lay off part of employees between October and March. Since 1/3 of products are exceeded, the company should layoff more than 1/3 of worker. Since some worker’s productivity is high than others, we can decide to layoff workers who have the lowest productivity, and the quantity is anticipate to 2/5 of workers, about 1200 people.
B) Reasons for option 1 is it can maximum keep the shareholders’ profit. Layoff employees…