Managerial ethics - Case Study #1 Shutdown at Eastland

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Case Study #1

Shutdown at Eastland

Submitted by: Aaron Rogers

On: October 16, 2004

To: Dr. Gary Barfoot


Case 1: Shutdown at Eastland

Executive Summary

Labor lobbyists and union leaders express concern and outrage at Speedy Motor Company’s seemingly hasty decision to close down its Eastland, Michigan based auto manufacturing plant.  The lobbyists and union leaders point to the Eastland plant shutdown as a reason why there should be Federal laws regulating plant closures.

Answers to Questions

The closing of a plant when it ceases to be profitable does not violate the “moral minimum” unless:  the closure is the result of internal fraudulent action(s), the closure violates or breaks employee contracts, or the closure harms others (the phrase “harm others” is difficult to quantify and is largely subjective…but I am mostly speaking of the financial hardship levied against the employees and the greater community).  (Sollars, Lecture 5, 2001).  From the information presented in the case, we are not able to tell if conditions number one and two are true or not.  We are, however, able to show that condition number three is satisfied, therefore if we apply the question to this case, we can show that the closure of the Eastland plant does violate the “moral minimum” because of the hardship (harm) it causes to its employees and to the community.

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The affected stakeholders include all of the following:  Eastland plant employees, business that hold contracts with the Eastland plant, Eastland plant suppliers, stockholders in the Speedy Motor Company, and, to a lesser extent, businesses that profit from the Eastland plant being open (ie, the community at large).  The stakeholders interests should be evaluated and considered based upon a graduated scale of significance.  In other words, the concerns of those stakeholders that are directly involved in the company operations (employees, suppliers, contractors) should be considered above the needs or concerns of the greater community.  The considerations of stakeholders who are ...

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