An Ethical Case Analysis on China Companies

The primary issue is whether to clamp down suppliers' use of cheap labor and unsafe work conditions (sweatshops) to manufacture the clothes (keeping costs low equates to high profit) versus operating an ethical business.

Stakeholders involved Their rights

Shareholders Right to company profits and to expect company to behave according to ethical standards so that brand image is maintained and profits continue to roll in

Employees Right to be treated fairly in their jobs and to be compensated appropriately for their efforts

Suppliers Right to earn profits that is expected from agreements with company

Customers Right to expect that the products they are buying does not cause harm in the production process.

Government and pressure groups Right to boost economy growth and ensure citizens of its country being taken care of and right to voice their views on what they believe, equal rights of fair treatment of workers

Potential alternatives and consequences:

1. Continue to work with suppliers that can provide manufacturing at cheap prices with no regard to the working conditions:

This will benefit shareholders and suppliers (low costs) on the expense of employees (low pay). However based on utilitarian viewpoint, the company should not take this position as the employees will suffer more from the low wages and financial difficulties on top of the potential health and safety risk. Given that these workers have no freedom of association to form trade unions and the Government carry out regular crackdowns on non-governmental labor organizations , they are in a position of being exploited. In the long run, if exposed, Raoul's brand image may be damaged and ethical-thinking customers may turn their back on the