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Etch a-sketch

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  • 1. Etch-A-Sketch Ethics
  • 2. The Ohio Art Company
    • Founded in 1908, to manufacture metal oval frames
    • Incorporated in 1930, making metal toys
    • Located in Bryan, Ohio
    • One of the oldest toy companies in the business
    • Manufactures games, toys, children’s vehicles
  • 3.  
  • 4.  
  • 5.  
  • 6. L’Ecran Magique
    • In 1959 Ohio Art visits national toy fair in Germany
    • Discovers L’Ecran Magique, invented by a Frenchman
    • Ohio Art not interested
    • Visits fair again in 1960, decides to buy
    • Changes name to Etch-A-Sketch
    • Becomes one of the top-selling toys of all time
  • 7. Etch-A-Sketch
  • 8. Inside Etch-A-Sketch
  • 9. Background to Case
    • Late 1990s, toy sales sluggish
    • December 2000, strategic decision to outsource production of E-A-S to Kin Ki Industrial
    • Rationale was cost saving
      • Lower wages: Chinese factory workers make $75/mo versus $1,500 month for US factory workers
      • Lower overhead: plant, maintenance, electricity, health benefits
  • 10. Death of a Community
    • Lay off 100 US workers
    • Home foreclosures
    • Tax base eroded in Bryan
  • 11. New York Times, 12/07/03
    • Reports dismal picture of working conditions
      • 7:30 am to 10:00 pm
        • 84 hrs/week versus 40 hrs/week set by local authorities
      • 24 cents/hr versus 33 cents/hr minimum wage
      • No pensions, medical benefits
      • Poor dormitory and food conditions
  • 12. What to do…
    • Senior executive at Chinese plant acknowledges low wages, says they will be raised
    • Ohio Art CEO claims no knowledge of labor problems, but will visit China soon to make sure expectations are met
  • 13. Case Question #1
    • Was it ethical of the Ohio Art Co 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 moved?
  • 14. Case Question #2
    • Assuming that the description of working conditions given in The New York Times is correct, is it ethical for the Ohio Art Co to continue using Kin Ki to manufacture Etch-A-Sketch toys?
  • 15. Case Question #3
    • Is it possible, as Mr. Killgallon claims, that the Ohio Art Co had no knowledge of labor problems at Kin Ki?
    • Do you think company executives had any knowledge of the working conditions?
  • 16. Case Question #4
    • What steps can executives at the Ohio Art Co 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?
  • 17. Part I Review
  • 18. Globalization
    • Globalization of markets and production
    • Drivers of globalization
      • lower trade barriers, technological innovation, and human aspirations
    • Emergence of global institutions
    • Changing nature of multinational corporations
    • The pros and cons of globalization
  • 19. National Differences
    • Political economy
      • The interactions of a nations political, economic and legal systems
    • Placing nations along three continua
      • Individualistic vs. collectivistic
      • Democratic vs. totalitarian
      • Free-market vs. command economies
    • Legal systems
      • Based on common law, civil law or theocratic law
    • Defining economic development
    • Political and economic transitions
  • 20. Cultural Differences
    • Definitions of culture
    • Components of culture
      • Values, norms, and society
      • Distinctions between cultures, societies (ethnies), nations, and states
    • Social structures
      • Individual vs. group orientations
      • Social stratification and social mobility
    • Religious and ethical systems
    • Implications for management
      • Importance of cross-cultural literacy
      • Culture as a source of competitive advantage
  • 21. Business Ethics
    • Business ethics as accepted principles or right and wrong
    • Ethical issues in international business
      • Corruption: Emergence of international laws to control corruption
      • Environmental pollution: Differences in regulatory regimes
      • Human rights: Working in countries that lack effective human rights protections
      • Employment practices: Working conditions, wages and forced or child labor
    • Ethnical dilemmas and ethical decision making
  • 22. Exam 1 Sample Questions
  • 23.
    • The world’s largest 100 multinationals are dominated by
    • A. firms from developed economies
    • B. firms from China
    • C. firms from Mexico
    • D. firms from developing countries
  • 24.
    • Drinking alcohol in Saudi Arabia would be considered a violation of local
    • A. folkways.
    • B. rituals.
    • C. rites.
    • D. mores.
  • 25.
    • Which of the following is not a determinant of ethical behavior?
    • A. realistic performance goals
    • B. organization culture
    • C. leadership
    • D. decision-making processes

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