Business,society and policy - Case Study Example

Harris Kamran Business 11 September 2007 Business, Society and Policy- Analysis of Case Introduction: this report is concerning the business perspective of Panther Sports, who have outsourced the soccer balls manufacturing in Pakistan, and are now faced with an ethical problem that is putting their sales, credibility and stronghold in the Asian sports market at jeopardy (Rammal 2002). The Issue: Child labor is defined as any kind of work done by children under the age of 15, and any work that is performed by children under the age of 18 that might affect their education, or otherwise might put them at a risk of physical, emotional, or psychological stress and impairment, making it an illegal practice (Rammal 2002). Conflict: Panther Sports, after a decline in its sales due to increasing economic pressure and limited manufacturing schemes, decided to follow the example of other companies in outsourcing the manufacturing market in the developing countries where labor intensive jobs are cheaply done. This would ensure that the product is made on the same quality and standards as those made through domestic manufacturing, but the cost of production would be considerably cut. Outsourcing in the Asian countries would also open the doors to Asian market to them where they had a good chance of developing their stronghold. Hence, they developed their soccer manufacturing market in Pakistan, and contracted with Faisal Sports in Sialkot. However, in this region, that is India, Pakistan, and Bangladesh, there have been extensive cases of child labor. Faisal Sports was discovered to be involved in this act, and so Panther Sports terminated its contract with this contractor. Given the nature and gravity of this illegal act, Panther Sports is at risk of losing its future consumers, and its hold in the Asian Market (Rammal 2002). Business Perspective: before a conclusion can be drawn about the involvement of Panther sports in this conflict, and recommendations can be given to solve this problem, the business perspective has to studied. This involves discussing the structure and infrastructure of multinational companies, their responsibilities and duties as set by many codes and instructions by authorities, the methods of their operations concerning outsourcing in other countries, a look at the stakeholders theory and the risks that Panther Sports runs. Business organizations and companies are viewed as independent entities and virtual citizens of a state. These organizations are held independent of their staff, and hence, the staff, on any level, will not be charged of any crime if the organization fails to fulfill its duties or violates any code of conduct. The organization itself will face the consequences, and the owners themselves will not be held responsible. Whereas the companies are not entitled to solve every problem faced by the communities in which they have their plants, they are demanded to make sure that any issues created as a direct or indirect influence of the company, whether primary or secondary, be solved by that company, and that their business procedures do not violate the norms of business ethics and the standard set regulations (Freeman 2002). When companies outsource their manufacturing business in other countries, they, though still holding the right to the name and label of the company, do not own the factories and industries locally set in those countries that are manufacturing their products. Hence, legally, these companies are not directly held responsible for any misconduct on the part of the outsourced market. They give out their company logo through a contract with contractors to the locally established industry. The contractors have sub-contractors that are a link between the stitchers and the company. Hence, as is evident from the whole setup, the companies are themselves not involved when it comes to cases like child labor, but because it is their brand name that the child-workers are working on, in the end it is the companies that suffer. This is established by the stakeholders theory. This theory states that the company has to ensure the well-being and interests of all the parties that are related with the company in a way that they have something to gain or to lose by the actions of the company. These parties include the staff, the consumers, the management, the shareholders, and the community in which the company is operating (Freeman 2002). As involvement with child labor affects the community, the sales of the company that fall and hence put an economic strain on the management, maligns the name of the company and the management, and reduces the prospect of business with future clients, it is ultimately the company itself that is at a liability for any business related damage or unethical issues concerning the goods that they produce. Measures and recommendations: when this problem first surfaced, other companies that had their businesses outsourced in Pakistan adopted certain measures to curb any future occurrences of this problem. These measures included drafting codes of conduct for their businesses and ensuring that they were followed by external and internal monitoring, and labeling their products as child labor free so that the costumers were guaranteed about the nature of their products (Rammal 2002). Panther sports, on the other hand, took neither of the actions, and simply terminated their business dealings with Faisal Sports. This will invariably affect their future deals with their clients drastically as their industry that was manufacturing their products at low costs is closed down, they would not be able to provide for the Soccer World Cup in Korea and hence will lose their sales in the Asian market. To solve this problem, the company needs to find a reliable contractor in Pakistan, preferably in the same region of Sialkot as this would minimize the costs of production and manufacturing as compared to setting up new plants elsewhere, especially now that the company's financial well- being is at stake, develop a code of conduct to be followed by the staff at all levels in the company, make sure the internal and external monitoring is carried out regularly and through a foolproof system, and develop labels for their products which should ensure the clients that they are produced in a child labor free environment. In fact, costumers are ready to pay more for products that do not include child labor practices than for those that have such involvements, and so the company need not worry for any decline in their sales if they adopt these measures. If nothing else, these steps would increase their sales, establish the company as responsible and reliable, and maintain and increase its stronghold in the Asian and the international world market. Works Cited Donaldson, T.D. Werhane, P.I. 2002. Introduction to Ethical Reasoning. Module 1. Freeman, R.E. 2002. Business Social Performance and Social Responsibility. Module 2. Freeman, R.E. 2002. Stakeholder Theory of the Modern Corporation. Module 2. Rammal, H.R. 2002. Panther Sports and the Pakistani Soccer Ball Industry. Module 2. Werhane, P.I. 2002. Globalization (Sociology: Themes and Perspectives). Module 1. Read More