One of the biggest advantages of globalization is that many different companies are able to receive cheap labor to produce a wide variety of products that are sold at numerous retail stores in the United States. However, an ugly facet to what has been happening, is that there are a number of different sweat shops in a host of regions around the world and in some cases within the U.S. itself. Evidence of this can be seen with an investigation that was conducted by the Department of Labor. They found that over half of the companies they were looking at, were breaking numerous labor laws by operating 10,000 of these kinds of facilities illegally inside the nation. At the same time, they discovered that a variety of governments around the world were encouraging these kinds of factories. (Elliot, 2009)
In the case of Kathie Lee Gifford, her clothing line was placed into the spotlight. Once it was revealed that her entire product line was being manufactured at these locations inside and outside of the U.S. At which point, there was a tremendous amount of public outrage. As, there were numerous factories in: Honduras and within a few blocks of her studio that were in operation. This is problematic, because it is illustrating how the lack of ethics inside these kinds of organizations is allowing this to take place. To fully understand what is happening requires: examining the current situation, how the issue compares to following the law vs. maximizing their profit margins, the role of company leadership, what individuals / groups have a stake in the outcome, what options are available, if the decision is more damaging to a particular individual or group, what is the best option for addressing this situation, how a remedy could be implemented that will take into account the views of different stakeholders and what can stakeholders learn from these kinds of situations. Once this occurs, it will provide the greatest insights as to the underlying challenges and how these issues can be effectively rectified over the long-term. (Elliot, 2009)
What are the relevant facts of the case? What facts are not known? Do you know enough to draw a conclusion? What, if any, additional information would you seek?
In 2008, Kathie Lee Gifford was shocked to learn that her entire clothing line that was being produced in various sweatshops around the world. This follows a 1996 scandal, where her company and clothing line wrestled with similar kinds of issues. What happened was Charles Kernhagan and the National Labor Committee revealed that many of her different clothes were being manufactured at sweat shops throughout Honduras. At the time, these factories were closed down and the scandal began to quickly run its course. Then, in 2008 the National Labor Committee revealed that nearly all of the clothes that were being produced by the Kathy Lee Gifford clothing line were: manufactured in sweatshops throughout Honduras and within the United States. This same situation took place, involving a company that was publically humiliated and it had tarnished the reputation of Gifford once again. (Elliot, 2009) ("National Labor Committee," 2000)
The different kinds of facts that are not known about the case are how involved she was prior to the second scandal breaking. Where, it is obvious that some kind of ethical issues existed in the company. However, the overall scope and level of her knowing about this is unclear due to the way she reacted publically. Obviously, several different conclusions can be drawn. Most notably: that there was a lack of ethics inside her company, executives were knowingly engaging these activities after having seen the organization going through a similar situation and that the overall scope of the scandal become even worse with the revelation of these kinds of factories inside the United States (which is a violation of a host of different labor laws). As a result, the kinds of information that needs to be sought out are: the involvement of Gifford in what was happening. As, there needs to be some kind of examination as to: the overall length that company executives went in hiding what was happening. This will reveal depth and steps that were taken within the organization to encourage this kind of behavior. ("National Labor Committee," 2000)
Is this issue about more than what is legal or what is most efficient? If so, how?
This is about both what is legal and efficient. The reason why, is because these kinds of issues are interconnected. Where, the scandal involving Kathie Lee Gifford has revealed that there were sweatshops operating just a few blocks from the studio that she worked at. This is a violation of the Fair Labor Standards Act. ("Youth and Labor," 2011) At the same time, the fact that there were factories operating in Honduras is a sign that her company was engaging in the same kind of unethical behavior. In this aspect, one could argue that company executives were knowingly violating the law by: allowing these factories to operate in the United States and in the same region where they had these problems as before. Therefore, one could effectively argue that this issue is based on illegal activity that executives were knowingly engaged in. Yet, the overall scope and involvement of Gifford is unknown.
At the same time, this is a matter of the organization maximizing their profit margins and increasing productivity as much as possible. In this aspect, the overall scope of these sweatshops in different locations around the world is a sign that there was a concentrated effort by executives to achieve these overall objectives. Where, they have taken the concept and they have expanded what was happening to produce the final product for the lowest costs possible. These different elements are important because, they are illustrating that the scandal involving Kathie Lee Gifford's company is both a matter of legality and efficiency. As, the two different aspects are interconnected to help her company increase their overall bottom line as much as possible regardless of what is taking place inside the organization itself.
What was the role of company leadership in this case? How did they impact the case in both the positive and negative way?
The role of company leadership in this case, is that there was a strategy that was designed to help them produce a wide variety of products for the clothing line as cheaply as possible. Where, the highest levels of the organization were involved in the decision. The reason why, is because this case is not just an isolated incident at one particular factory. Instead, it was a number of different locations around the world to include one that was located within New York City. This is an indication that executives from the very top of the organization knew what was taking place and they were knowingly ignoring what was happening.
The way that these decisions impacted the case positively was based on: the fact that the organization was able to maximize their profit margins and productivity. This allowed executives to be able to sell their clothing line to Wal Mart at the lowest costs possible. At which point, they were able to attract a national chain and ensure that there would be consistency in helping them maintain the highest bottom line numbers. The negatives of this kind of case, is that once the facts were revealed, the company was enduring a second public relations nightmare. The only difference is that the overall scope of what was occurring was more severe with the actions that were being taken clearly violating the law.
What individuals and groups have an important stake in the outcome? Are some concerns more important than others? Why do these groups take precedence? Do you agree with this precedence?
There are a number of different individuals and groups that have an important stake in the outcome. A few of the most notable include: Kathie Lee Gifford, company executives, shareholders, regulators, customers and the workers. These different elements are significant, because they are illustrating how the overall interests of stakeholders will vary from one group to the next. As a result, the clashing of these interests is the heart of the underlying ethical dilemma itself.
This means that are some concerns that are placed over that of others. The biggest ones was that company executives wanted to increase their profit margins at all costs. This meant that they would knowingly become involved in activities that were unethical. As, they engaged in behavior that had given the company a black eye one decade earlier and taken them to a new low. In this aspect, the concerns of the company were placed above that of the image of Gifford and the interests of regulators along with workers. The reason why the interests of the company were taking precedence was that executives wanted to ensure that they were able to achieve their long-term goals at all costs. Obviously, I do not agree…