Mega Food Ethic Case

1. Ethical issues are problems or situations involving systems of morality and principles that requires people to choose between alternatives that must be evaluated as right or wrong. In the case, there are at least 3 following ethical issues would encounter in the process of formulating my recommendation.

1. What will happen to the current employees if the company will be relocating to the different country? This is the first ethical issue we have to consider if the facility in Orchard is closed. There are 125 employees are working in this facility, they will have to face with unemployment and have to find another new job as soon as possible to deal with livelihood issues. Additionally, although the average tenure with the company is over 10 years, but several of the employees have worked for the company over 20 years and are nearing retirement. This is so unethical if we fire them at this time. This issue relates to Utilitarianism theory, which is the best moral action that maximizes the well-being of sentient entities. According to this theory, the first duty of Mega Food should be to provide job for those employees, thing that they cannot provide for themselves.
2. Raw material and other ingredients in Country of Frostburg that are used to manufacture are less expensive to achieve than in Orchard Facility, but they do not undergo regular inspections. Cheaper materials and ingredients is one of the main reason for Mega Food considering move its facility to Country of Frostburg. However, due to the loose of environmental laws in this country, those raw materials are not inspected carefully. If Mega Food uses those local material in manufacturing, it could lower the quality of the product. More dangerous, there might be a potential of food poisoning for customer. The company has to consider between the product quality and the health of customer with the cheaper price material.
3. Will Mega Food tell the public the truth of the goal to increase this level of profitability or they will make up another reasonable excuse? This is one of the five executive integrity, “tell the truth”. Mega Food has to consider between two above options, because each one will lead to a different scenario. If the company tell the truth, it is more likely that its image and reputation will be negatively and significantly affected. However, Mage Food can choose to lie about that to maintain its stand in the market, but this action is untruthful and unethical.

1. Corporate social responsibility, often abbreviated "CSR,", is the commitment of corporation for business ethics and contribute to sustainable economic development, improve the quality of life for employees and their families, local communities and society in general. Applied in the case, there are at least three following issues related to CRS that would encounter in the process of formulating my recommendation.

1. Current employees and local farmer will lose their means of subsistence (Nurturing community). As the case mentioned, if Mega Food move its facility to Frostburg, not only 125 current employees lose their jobs but also other local farmers who supply several of the raw products and materials have to face this issue. Additionally, the Orchard facility is the only large employer remaining in the area, thus, it is even more difficult for people to find other means of living quickly. According to CSR, Mega Food have the responsibility to generate employment and other benefits to society, and offering job is one of that.
2. Ethical labor practices in Frostburg is weaker than in the U.S. A company can demonstrate their CSR by treating employees fairly and ethically. But unfortunately, labor laws and regulations related to human resource management are not well developed in Frostburg. This is an important issue related to CSR that Mega Food has to consider, because according to the case, employees in Frostburg have far fewer protections that can affect directly to their safety and health than US workers. If Mega Food decide to move its facility, it has to guarantee that the employees there will be treated fairly and ethically.
3. Environmental laws are less formal in Frostburg. This issue is not only affect to customer but also affect to the environment in general. When the laws are less formal, companies might have the trend to neglect this responsibility. Any businesses, both large and small, have a large carbon footprint. Thus, it is the duty of the company to ensure that it take any steps to a carry out those footprints are considered both good for the company and society as a whole.

1. Global trend is a general development or change in a situation that affects many countries of the world. In the case of Mega Food, there are at least 3 following global trend that are specifically influencing Mega Food to consider relocating operations of the Orchard facility to the country of Frostburg. WHY AND HOW

1. Companies are more and more seeking for economies of scale. In order to maximize profit as well as to become sustainable in the long-term, many companies have to achieve the economies of scale. Going globally could be considered one of the easiest way. Compare to the U.S., developing countries has cheaper labor force, cheaper raw material, low cost facility, and the law and regulation is looser. Thus, Mega Food want to relocate its operations to achieve this thing.
2. Companies are expanding to reach new markets and to acquire new customer. The ultimate goal of Mega Food is to increase overall profitability of the company, hence, moving facility to Frostburg is a stepping stone to enter global market. When Mega Food move its operation to a new country, it will help the company be easier to reach that local market, and from that, it can acquire more customers. Consequently, the overall revenue of the company also can be in crease to meet the goal.
3. Multinational brands are increasing significantly. By relocating its operation to a new country and reaching new market, Mega Food can become a multinational brand. A multinational brand will easier to be recognized by consumer throughout the world. From that, the image and reputation of Mega Food also can be increased, hence, it will lead to the increasing of overall profit.

1. If Mega Food choose to relocate the operation, there are at least 3 following challenges they might have to encounter.

1. Compliance with the new laws and regulation in the new country. When entering any foreign market, Mega Food first has to deal with the government of that country. It might consume an amount of time and money for the company to adapt to the new laws, and this might lead to reduction in production.
2. Struggling to fit with different culture. Besides the law and regulation, culture different could be a problem for Mega Food. If the company doesn’t do the research carefully before entering Frostburg, the current marketing strategy (such as problem with name, norm, word), and maybe the product itself (people in Frostburg don’t eat that kind of food) could kill Mega Food if any cultural conflict appears. This might lead to drop in sales.
3. Relationship with current customers might become worse. If the facility in Orchard is closed and moved to Frostburg, there is a potential that the current customers who are working with Orchard facility might don’t like this. The closed Orchard facility means that they have to work with other new further facility of Mega Food. Even worst, they might switch to other company, and as a result, Mega Food will lose its own customer.

1. What would be your official recommendation to Mega Food?  Please support your answer by providing a rationale that incorporates appropriate concepts covered in your business courses.

In my opinion, I would recommend Mega Food to move its facility from Orchard to Country of Frostburg. This decision may not ethically correct but it would make business sense. Mega Food could “show concern” for the current employees as well as demonstrate its corporate social responsibility by taking them along in the relocation process. If people are not willing to come along then the company should offer them relevant severance payment. However, if the situation is considered from utilitarianism perspective, I think the best alternative to the situation is to put forward the situation in front of the upper Management. This will help in getting the justice and rights theory fall in shape one by one in this case. Since most of these facilities were privately owned by the founder or members of the founders’ families and managed locally prior to being acquired by Mega Food, this will assure equal and fair treatment for all his employees. Management has to decide whether to put business ethics forward in front of the business sense decision.