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Business Case Study: Ridgecrest Mississippi

Decent Essays

QUESTION 1
The inducements offered to Southern Recreational Vehicle were an attempt by the community leaders of Ridgecrest Mississippi to have the company move its operations from St. Louis to their city. The inducements were as follows:
1. The company would benefit from an exemption from taxes for both the county and the municipality for five years.
2. The company will incur no charges for sewage services and water utilities.
3. Free construction provided by Ridgecrest of a second loading dock for the company at their site of operations.
4. Ridgecrest will make an investment in future expansion by issuing $500,000 in industrial bonds.
5. Ridgecrest will invest in Southern Recreational Vehicle’s employees by offering publically financed training …show more content…

Employees may have reluctance to move from a big city to a small, rural town and the prospect of breaking ties with friends and family. There is also the loss of convenience and culture found in a big city such as restaurants, museums, music venues, etc. Because of this potential loss of talent, the company must rely on local employees to fill roles that they may not have training, education, or experience to perform. While the town will invest in industrial training, the company may find itself without management and executive level employees. These voids can lead to a loss of direction and a slowdown in production, as the company must train employees at all levels. Once trained the company will still have lost productivity as new employees continue to grow in their positions. There may also be a shortage of employees of any type in the area. Depending on many employees follow the company there vacancies could remain for an indeterminable amount of time resulting in decreased productivity …show more content…

Whether his actions were justified is, of course, a subjective analysis since each side would see their best interests compromised. The company may not have explored all avenues of revenue recovery to remain profitable with the current state of their labor contracts and the unions could have made concessions on salary and benefits. Ultimately, the company must make decisions, which lead to its continued profitability and existence as a competitive entry within the market. In this, it appears that no compromise was possible and the company sought a better option for its continued manufacturing. Added to this incentive for lower costs were benefits and enticements by different regions of the country. Tax and utility discounts, investment in infrastructure, and a long-term partnership for growth added to the labor and operational costs led to the ultimate decision to move production to Ridgecrest. I believe that this decision negatively affected many of its workers in St. Louis; however, the overwhelming incentive to move its operations made this a smart business decision and the company was justified in its

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