Etch-a-Sketch Ethics

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Case Study 2: Etch A Sketch Ethics
MGT 214 – Managerial Foundations

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
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Do you think the company executives had any knowledge of the working conditions?

At first glance, I had a hard time believing that the Ohio Art Company and Mr. Killgallon had no knowledge of the labor issues at Kin Ki. According to an Article from The Wall Street Journal, published a few months prior to the damaging New York Times article on Kin Ki, Ohio Art’s vice president of manufacturing made “quarterly visits to China” (Hymowitz 2003) to meet with suppliers. This fact, partnered with the labor strikes at Kin Ki prior to 2003, made me believe that Ohio Art must have had some idea of what was going on with the labor conditions at Kin Ki. However, the same New York Times article that publicized the poor conditions at Kin Ki also explained why Ohio Art and its executives may have been clueless to the situation during the quarterly visits. The New York Times describes “crib sheets” or “the official working conditions at Kin Ki as described on paper.” (Kahn 2003) These “crib sheets” were issued by Kin Ki management to all Kin Ki employees prior to any visits from outside companies or inspectors. (Kahn 2003) Kin Ki managers were intentionally hiding the poor conditions from anyone visiting their manufacturing operations.

4. What steps can executives at the Ohio Art Company take to make sure they do not find the company profiled in The New York Times again as an enterprise that benefits from sweatshop labor?

Obviously, Ohio Art must take steps to

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