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Abc Case Study

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MEMORANDUM
DATE: April 23, 2017
TO: Members of the Board of Directors of ABC Steel, Inc.
FROM: Jordan S. Rigert
SUBJECT: Recommendation Regarding Whether to Relocate ABC's Manufacturing Operations to China
With the EPA and union putting pressure on ABC Steel Incorporation, we as the Boards of Directors need to make a critical decision on whether or not we should relocate our manufacturing operations to China. We as the board must keep in mind our duty to abide by a Code of Ethics. If we decide to resolve this decision by relocating to Chine, we would significant violate our ethical requirements adopted by ABC. There are two principle components that must be addressed. First is the EPA compliance issue of water and air pollution, and the second
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However, should we stay in the Reading, it is likely any tariff placed on Chinese steel will improve our profits as the price of steel in the US will likely rise. It is also important to note that the environmental situation in China is very bad, as they have some of the worst air and water pollution in the world. In China, the current environmental regulations have loopholes to work around their strict rules. With absence of regulations in the past and loopholes, China has represented the number one polluter in the entire world. If we were to move there we would just be contributing to this already bad…show more content…
Regarding the costs we are currently dealing with in Reading, it is clear that the more ethical and economic decisions is for ABC to stay where we currently are. This will able us to pursue our fiduciary duty to the EPA, community, shareholders, customers, and employees. In order to hold to our Code of Ethics, we must comply with the EPA. If we decided to move our operations to China, our 120 years of loyalty to the community would be destroyed. With regards to my final recommendation, I recommend that we choose not to buy China's steel mills. Instead, we shawl continue to produce steel in the United States in Reading, Pennsylvania. Trump Administration intends to cut taxes and increase spending for steel related projects. As a result, the U.S. steel demand would increase and market price would go up, allowing an optimistic vision for the
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