- Mr. McHenry, a carpet buyer for an international wholesaler, is finalizing a major contract with a Moroccan carpet manufacturer, SOMARTA, managed by Mr. Hachad. - However, Mr. McHenry saw pictures of the plant showing girls as young as 12 working, which presents ethical issues. There are also delays and price/wool supply problems. - Mr. McHenry faces a dilemma of whether to ignore the child labor conditions to preserve the deal, or address the issues. Options include auditing the factory, finding a new supplier, changing production countries, or replacing Mr. McHenry. - The best option is to audit the factory to verify the ages of

1. International carpet wholesaler
CASE STUDY
Chloé LE GENTIL
Audrey MARAIS

2. Overview: Names & Position
 Mr. James McHenry: buyer for International Carpet
Wholesalers, located in New York
 Ms. Paula Feldman: President of International Carpet
Wholesalers, located in New York

3. Overview: Names & Position
 Mr Abdelhadi Hachad: Managing Director of Societe
Maroc Tapis (SOMARTA)

4. Overview: dialogue and exhibits
 Dialogue : between Mr. McHenry and Mr. Hachad in his
office to finalize the agreement. negociation about the
delays, questions about the employees conditions,
manufacturing improvement ..
 Exhibit 1: Fax from Mc Henry to Ms. Paula Feldman (her
boss)
 Exhibit 2: Fax from Feldman to McHenry
 Exhibit 3: Portion of a Letter send by McHenry to his wife
 Exhibit 4: Note sent from McHenry to Mr. Hachad

5. Dialogue

6. Dialogue

7. Exhibit 1: Fax from McHenry to Ms. Paula Feldman,
President of International Carpet Wholesalers

8. Exhibit 2: Telex from Feldman to McHenry

9. Exhibit 3: Portion of a Letter Sent by
McHenry to His Wife

10. Exhibit 4: Note Sent from McHenry to
Hachad

11. Note on the Moroccan Carpet Industry

12. Business Overview
 Mr McHenry, a buyer in a large import carpet company,
has nearly completed a major contract with a
manufacturing company Moroccan carpet, SOMARTA.
Mr McHenry provides wool at a great price to Mr
Hachad.
 Both parties are delighted, especially since a large order
is scheduled for next year. However, Mr McHenry has just
seen pictures of the plant, which despite impeccable
maintains, shows girls as young as 12 years working. There
are also some problems with the necessary quantity of
wool and the price and their delays.

13. Problems
 Employment of children
 Delay for the wool import
 Delay for the fabrication of rugs
 Price of the rugs

14. Existing situation: Communication
Strengths Weaknessess
- Mr Hachad has a fluent English.
- Good reactivity in International
Carpet Wholesalers.
- Good relation with Mr Hachad
and with his boss, Paula
Feldman.
- System of maalema, Mr
Hachad didn’t know the crew
of the maalemas.
- Importer of wool in Australia,
difficulty to contact him.

15. Existing situation: intercultural
differences
Americans Moroccans
- Spirit of business, always find
the lower price.
- Contradiction for McHenry.
- Legislation on the minimum
age for work.
- Very young population, half of
the population is under 20.
- System of maalema.
- Legislation for the wool import.

16. Existing situation: Ethics
Strengths Weaknessess
- The Government tries to make
efforts to increase educational
opportunities for girls.
- The reaction of McHenry, he
can’t contribute to the
exploitation of children.
- Factory is very clean.
- Mr Hachad doesn’t control the
maalemas’ employees.
- The age minimum is 12 years
old.
- Every companies practice the
same system.

17. Existing situation: management
Strengths Weaknessess
- McHenry is very independent
in his work.
- Mr Hachad is ready to make
many changes in his company
to follow the command.
- Hierarchy problem with the
system of maalema.
- McHenry failed lie to his boss
rather than tell her the
problem.

18. Statement of problems
 McHenry is facing a dilemma:
Whether to turn a blind eye to the way of working of his
suppliers in Marocco, or to oppose himself to these
conditions.

19. # Option 1: Nothing change
Advantages Inconvenients
- Not time or money consuming
- Avoid a disagreement
between Mr McHenry and Mr
Hachad
- Allows to keep producing the
carpet at lower price ->
increase margin for Mc Henry
- Avoid Mc Henry to disappoint
her boss with the deal
- Encourage young girl to work
in factories according to the
maalema system
- Mc Henry will be filled with
remorse if he doesn’t act
- In an ethical point of view: bad
for the image of the company

20. # Option 2: Audit the factory
Advantages Inconvenients
- Ease McHenry’s conscience
about the young working girls
- Allows the company to know if
the girls really are 12 years old
or younger so that they can
make a clear decision
- Ethical point of view: good for
the company
- Cost money and time
- May lead to disagreements
with Mr Hachad
- The deal might be canceled

21. # Option 3: Look for an other supplier
Advantages Inconvenients
- Allow them to find a new
supplier without involving
young girl
- Resolve ethical issues of the
problem: company’s image
not in danger
- They may find a deal even
more interesting
- Time consuming
- They may not find an other
supplier
- They may find a supplier with
expensive prices or bad quality
- They may find suppliers with
even younger girls or worst
working condition -> more
ethical issues

22. # Option 4: Change the production’s country
Advantages Inconvenients
- Resolve the issue with
Morroco’s policy about the
child labour
- They may found a country with
prices even more interesting
- They loose Morroco’s
opportunities: free tax with
import on whool when they
export rugs
- Prices will certainly rise in an
other country
- The rugs quality may not be the
same

23. # Option 5: Fire McHenry
Advantages Inconvenients
- He will not worry anymore
about the young child working
- Time saving (they will not have
to search for an other factory
or audit one)
- Mc Henry has good relations
with her boss and Mr Hachad
- Time consuming to find
someone to replace him
- Hard to find someone as
qualified as him

24. Recommendation : Audit the factory
 The best thing seems to audit the factory in order to know
if the young girl are twelve or not as Mr Hachad claims.
 Analyze the working conditions of the employees, and
reduce the bad habits. (force the factory to establish
some break during the labour time)

25. THANK YOU FOR YOUR ATTENTION