Southern Recreational Vehicle Company

SOUTHERN RECREATIONAL VEHICLE COMPANY

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INTRODUCTION

Like all the other businesses, southern recreational vehicle company is aimed at making profits and minimizing costs of operations. This case study explores the various issues attributed to relocation and also explores the various benefits attributed to relocation. Many factors contributed to the decision of the company to relocate. Such issues included high operating costs, high taxes, and also the transportation costs.

Taxes paid by businesses in the different states of the USA are different. For instance, some cities and states such as Mississippi give tax breaks to businesses for the purpose of attracting new enterprises and businesses to their community (Harger & Ross, 2016). This was one of the reasons behind the company’s relocation because taxes are a key determinant of the profits to be made by the business.

Question 1.

Communities often issue inducements to businesses wishing to relocate to their community. These incentives are aimed at attracting more and more businesses to come to their community (Skutsch, Vickers, Georgiadou, & McCall, 2011). Both parties benefit because businesses find another market, while also being socially responsible for the community.

The financial inducements offered by the company are for the purpose of bringing development to the community of Mississippi. Such inducements are normal in the world of today because communities anticipate that they will benefit from the relocation of the business.

One of the benefits the community may get from offering the inducements include agreements that the community will buy the plant facility in the future and will lease it to another business or enterprise, thereby earning profits.

Question 2.

Relocation has some challenges, especially when businesses relocate to a rural area with a small population. Rural areas, such as Mississippi do not have improved educational and recreational facilities, and as such, the executives and managers of the company may be hesitant and reluctant to move to the new area.

Unlike in the developed cities where life is smooth because of the availability of these facilities, relocating to a new rural area may lower the morale and motivation of the executives (Papendiek, Ende, Steinhardt, & Wiggering, 2012). Secondly, there is the issue of housing and medical care facilities. These aspects also play an important part in the relocation decisions by the executives and may hinder their relocation.