NuComp Company

 

 

 

 

 

NuComp Company operates in a state where corporate taxes and workers’ compensation insurance rates have recently doubled. NuComp’s president has just assigned you the task of preparing an economic analysis and making a recommendation relative to moving the entire operation to Missouri. The president is slightly in favor of such a move because Missouri is his boyhood home and he also owns a fishing lodge there.

You have just completed building your dream house, moved in, and sodded the lawn. Your children are all doing well in school and sports and, along with your spouse, want no part of a move to Missouri. If the company does move, so will you because the town is a one-industry community and you and your spouse will have to move to have employment. Moving when everyone else does will cause you to take a big loss on the sale of your house. The same hardships will be suffered by your coworkers, and the town will be devastated.

In compiling the costs of moving versus not moving, you have latitude in the assumptions you make, the estimates you compute, and the discount rates and time periods you project. You are in a position to influence the decision singlehandedly.

Instructions

 

Who are the stakeholders in this situation?

What are the ethical issues in this situation?

What would you do in this situation?

Sample Solution

The stakeholders in this situation are:

  • The company: NuComp Company is the primary stakeholder in this situation. The company is facing increased costs and is considering moving to Missouri in order to save money.
  • The employees: The employees of NuComp Company are also stakeholders in this situation. If the company moves, the employees will have to move as well, which will disrupt their lives and cost them money.
  • The town: The town where NuComp Company is currently located is also a stakeholder in this situation. If the company moves, the town will lose its largest employer and suffer economically.
  • The environment: The environment is also a stakeholder in this situation. If the company moves to Missouri, it may have a negative impact on the environment, such as increasing pollution or deforestation.

The ethical issues in this situation are:

  • Fairness: Is it fair to the employees to move them to a new state when they have just built their dream homes and their children are settled in their schools? Is it fair to the town to lose its largest employer and suffer economically?
  • Responsibility: Does the company have a responsibility to its employees and the town to stay in its current location, even if it means losing money? Does the company have a responsibility to the environment to minimize its impact?
  • Transparency: Is the company being transparent with its employees and the town about the reasons for considering a move? Is the company providing accurate information about the costs and benefits of moving?
  • Accountability: Who will be held accountable if the move goes wrong? Will the company be held accountable to its employees, the town, or the environment?

The decision of whether or not to move the company is a complex one with no easy answers. The company must weigh the economic benefits of moving against the ethical costs. It must also consider the impact of its decision on its employees, the town, and the environment.

If I were in the position of the person preparing the economic analysis, I would carefully consider all of the stakeholders and ethical issues involved. I would make sure to gather accurate information and be transparent with all of the stakeholders about the decision-making process. Ultimately, I would make a recommendation to the company that I believe is in the best interests of all stakeholders.

Here are some additional factors that the company should consider when making its decision:

  • The impact of the move on the company’s long-term profitability.
  • The availability of skilled labor in Missouri.
  • The cost of living in Missouri.
  • The tax climate in Missouri.
  • The company’s corporate culture and values.

The company should also consult with its employees, the town, and other stakeholders to get their input on the decision. By taking all of these factors into account, the company can make an informed decision that is in the best interests of all stakeholders.

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