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Etch-a-Sketch Ethics

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Case Study 2: Etch A Sketch Ethics
MGT 214 – Managerial Foundations
6/12/2013

1. Was it ethical of the Ohio Art Company to move production to China? What were the economic and social costs and benefits of this decision? What would have happened if production had not been moved?

In my professional opinion, I believe the Ohio Art Company’s decision to move the production of their Etch-A-Sketch product to China was ethically sound. The Ohio Art Company was losing money while manufacturing in Bryan, Ohio. Even though outsourcing resulted in layoffs in Ohio, it also saved the jobs of many other employees by keeping the company profitable. Furthermore, even though outsourcing may result in lost jobs in the USA, it does provide employment for people in other countries. If the Ohio Art Company hadn’t moved production, it may have been forced out of business due to high manufacturing costs and immense pressure from distributors to keep prices low.

2. Assuming that the description of working conditions given in The New York Times article is correct, is it ethical for the Ohio Art Company to continue using Kin Ki to manufacture Etch-A-Sketch toys?

Continuing to use Kin Ki would be highly unethical, assuming that the New York Times article is correct and that Kin Ki would not immediately resolve the issue. According to the case study, Kin Ki was misrepresenting numerous aspects of their operation. These aspects included wages, hours worked, work conditions, and living conditions. The Ohio Art Company would have to deal with bad publicity and a damaged reputation with customers and others in the manufacturing world. Not to mention, the conditions reported in the New York Times violate the legal working standards set by the Shenzhen province where Kin Ki operates in China. Violating these standards could result in legal repercussions for the Ohio Art Company.

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