This proposition is a compromise that allows the business deal to continue while addressing the ethical concerns around child labor. By requiring training for the girls, it provides them education and skills while still employing them, as is customary locally. This avoids breaking the contract completely while promoting positive change.

1. INTERNATIONAL CARPET WHOLESALERS
Chloé Avanzini
Justine Fahmi
Nadia Mendes

2. PRESENTATION
Characters:
 Mr. James McHenry, buyer for International
Carpet Wholesalers, New York
 Mr. Abdelhadi Hachad, managing director of
Societe Maroc Tapis (SOMARTA)
 Ms. Paula Feldman, president of Intenational
Carpet Wholesalers
 Janice, wife of Mr. McHenry

3. EXHIBITS
 Dialogue between Mr. McHenry and Mr.
Hachad
 Fax from Mr. McHenry to Ms. Paula Feldman
 Telex from Ms. Feldman to Mr. McHenry
 Portion of a letter sent by Mr. McHenry to his
wife
 Note sent from Mr. McHenry to Mr. Hachad

4. DIALOGUE: MR. MCHENRY IS MEETING WITH MR. HACHAD IN MR. HACHAD'S
OFFICE TO FINALIZE THE AGREEMENT DISCUSSED THE DAY BEFORE
 Hachad Mr. McHenry, I had a long discussion with my brother last night. He is a co-owner of the business, you know, and I'm pleased to tell you that we
will be able to meet your demand. I should tell you though, that since we'll have to increase our present production capacity a bit, there will be some delay in
sending the first shipments.
 McHenry: How much of a delay?
 Hachad: About ninety days. That's forty-five days longer than you originally specified.
 McHenry: Could you send anything in forty-five days?
 Hachad: Of course, but not in the quantity you asked for yesterday. Right now, our present capacity is 5,000 square meters a month; 4,000 square meters
is already exported to Germany, and your demand of 2,000 square meters a month in different sizes, shapes, and styles will necessitate not only boosting
production but also making some modification in manufacturing.
 McHenry: Is that possible? Your factory looks like it's already working to capacity. I can't see how you'd install more looms; they're already so close
together.
 Hachad: That's no problem. We can simply put more workers to a loom. Also, we do have another small factory in Sale that can take up some of the slack.
We also have another workshop where we spin and dye the raw rug wool.
 McHenry: Well, I guess how you do it isn't really my business. I take your word that you'll figure it out. By the way, I noticed that a lot of workers in your
factory are young girls. Is that customary?
 Hachad: Yes. All the factories employ young girls. Does that surprise you?
 McHenry: Well, not really. When I bought carpets from Iran, it was much the same, but I don't remember so many young girls.
 Hachad: Do you know what the working age for apprentices was in Iran?
 McHenry: I believe it was fourteen.
 Hachad: In Morocco, it's just twelve. Actually, though, those girls don't work for me. We have what's called a maalema system here.
 McHenry: What's that?
 Hachad: Do you remember the older women who were supervising the work teams?
 McHenry: Yes.
 Hachad: Well, they are called maalema. The maalema are experienced craftswomen, and they hire their own crews. We only pay the
maalema. Even the state factories have maalema. It's an old tradition here, and one that works quite well. But now, back to business.
 McHenry: Sure.
 Hachad: About the wool, the question is, when can we begin receiving shipments? As I said yesterday, we could use 80,000 to 100,000
kilos a month.
 McHenry: Within forty-five days, providing I can get everything arranged with the Australian supplier within a week or two.
 Hachad: That soon?
 McHenry: I think so.
 Hachad: Well, the sooner we receive it the better. Until it arrives we won't be able to discount the prices as we talked about yesterday.
We'll have to keep using the more expensive French wool.
 McHenry: Right. I understand that.
 Hachad: Regarding the wool and prices, my brother suggested that it might be to both of our advantages to work out a barter
agreement. In other words, we will deduct the price of the wool from our finished rugs instead of making a separate transaction for the importing of wool and
the exporting of carpets.
 McHenry: You mean we charge you nothing for the wool and in turn get a substantial break on the price.
 Hachad: Exactly. In that way we both save on all the foreign exchange expenses.
 McHenry: That's a possibility. The problem is we still have to use foreign exchange to pay for the wool since it comes from Australia. I'd
definitely have to run that one by my boss in New York.
 Hachad: Well, think about it. How soon can you get an answer on that?
 McHenry: Well, I sent her a fax last evening about the terms. She’ll get that today. I'll call her this evening to see what I can do about the
wool. If I call at 6:00 P.M., it will be 12:00 noon in New York. I might be able to get an answer for you then.
The two businessmen
discuss about amount
of deliverables, delivery
date, the payment
Many young girls work in his factory.
Customary : the Moroccan factories employ
young girls and the legal working age for
apprentices is just twelve.
System of maalema: experienced
craftwomen and actually those who employ,
supervise and pay the girls.

5. EXHIBIT 1: FAX FROM MCHENRY TO MS. PAULA FELDMAN, PRESIDENT OF
INTERNATIONAL CARPET WHOLESALERS
FEB 13, 1994
TO: P. FELDMAN
FM: J. McHENRY
RE: RUG AGREEMENT
MET TODAY WITH A. HACHAD, RABAT MANUFACTURER OF HANDMADE CARPETS.
HACHAD AGREES TO SUPPLY 2, 000 SQ. M. /MONTH. BREAKDOWN AS FOLLOWS:
1,000 SQ.M./MTH MOYEN ATLAS (15/15*) @ 140 DH/SQ.M.;
300 SQ.M./MTH RABAT (30/30) @ 300 DH;
400 SQ. M. /MTH CHICHAOUA (30/30) @ 300 DH/SQ.M.;
150 SQ .M./MTH PLAIN ( PLIED WOOL) 127 DH/SQ. M.;
150 SQ. M. /MTH SIMPLE DESIGN (2-COLOR 15/15) @ 135 DH/SQ. M. ROUNDS OR OVALS AT NO EXTRA COST.
ALL PRICES F 0 B
ALSO WORKED OUT AGREEMEMT FOR IMPORT OF AUSTRALIAN RAW WOOL FROM HEATHERSTONE.
HACHAD WILL TAKE 80,000-100,000 KILOS/MTH.
CAN YOU CONFIRM PER HEATHERSTONE?
RUG QUALITY IS HIGH. HACHAD WELL ESTABLISHED AND IS CURRENTLY DOING BUSINESS WITH
GERMANS.
PLEASE ADVISE ASAP
*15/15: fifteen horizontal knots and fifteen vertical knots per 10 square centimeters. The more tightly packed (30/30,
40/40), the better the carpet.
8.0 DH (Dirham) = 1 U.S. dollar.
All the terms for the agreement: the
amount of carpets in detail and the
prices, details about SOMATRA.
Purpose of this email : ask for advice to
confirm agreement.

6. EXHIBIT 2: TELEX FROM FELDMAN TO MCHENRY
FEB 14, 1994
TO: J. McHENRY
FM: P. FELDMAN
RE: RUGS
AGREEMEMT SOUNDS BASICALLY OK, BUT PLAIN @ 127 DH/SQ.M. AND
SIMPLE @ 135 DH/SQ.M. IS HIGH. ALSO NEED QUANTITY BREAKDOWN
ROUNDS/OVALS.
HEATHERSTONE CAN 'T CONFIRM 80,000 KILOS/MTH. 50,000 KILOS/MTH
MAX TILL APR, THEN 80,000 KILOS: O.K.
WHAT IS ADVANTAGE OF EXPORTING WOOL? ARE PRICES FOR MOROCCAN
OR HEATHERSTONE WOOL?
CALL ME TOMORROW A.M. ALL BEST
Response to the fax mentioned before.
Ms Feldman basically agrees with the
terms, even if she finds some prices quite
high. She asks for more details on the
exportation of the wool.

7. EXHIBIT 3: PORTION OF A LETTER SENT BY MCHENRY TO HIS WIFE
As I mentioned, Morocco is fascinating, and I have been quite successful arranging a deal here. The
problem, though, is that I feel terrible about it, and really don't know what to do. This probably
sounds like a contradiction, but I wish I could somehow undo what I've done. Why? Because I
realize that by getting these rugs at such a good price, I'm directly contributing to the exploitation
of children.
Janice, you should see this factory! Little girls, no older than ten or eleven, some maybe even
younger, are working forty-eight hours a week for 50 cents a day making these rugs. They sit four
or five to a loom, tying knots hour after hour. The owner doesn't even "see" them. The only people
he "employs" are their supervisors, older women called maalema. The maalema hire their own
crews and barely pay these kids.
I've tried to maintain an attitude that this is Morocco and this is the way it's done. At the same time, it
really bothers me knowing that I'm perpetuating this situation. From what I hear, most of the
factories are the same way, so I just can't go to another. I suppose I could ignore it — I'm
supposed to be a businessman after all, not a humanitarian—but I can't. I'm even thinking of
telling Paula that I can't get a good deal, but that’s nearly impossible since I've already faxed to
her the details.
As you can see, I'm in a quandary. The part of me that is a good businessman says that I should get
the best deal I can; the part of me that is a human being says that I should have nothing to do with
this exploitation. Of course, if I don't go through with this deal, I better start looking for another job.
I‘ll let you know what happens. I’ll probably leave for Turkey next week.
Dilemma: great deal / Contribute to the
exploitation of children.

8. EXHIBIT 4: NOTE SENT FROM MCHENRY TO HACHAD
HOTEL RABAT
Dear Mr. Hachad,
I just got a telex from my boss. She says that the wool import deal is going to be
hard to arrange. Also, she thinks your prices on plain and simple design (two-
color) rugs are too high, so we'll have to do some renegotiation. Please call me
when you return from Tangier.
Sincerely,
James McHenry
Renegotiate the agreement in terms of
import and price

9. EXISTING SITUATION
Strenghts Weaknesses
Working condition:
« they sit four or five to a
loom »
Boosting production Not enough space to work
Intercultural differences:
Employ a young workforce
Cheap labor for the
Moroccan society
Moral problem: they are
children
Management:
Use maalema system
Hierarchy of the work, he
delegates his work
The children are almost
paid nothing
Finance:
Opportunity to make an
agreement
For both firms, it’s a good
deal
Mr. McHenry does not
want to contribute to the
expoitation of children

10. PROBLEM
Mr McHenry is a businessman but this
agreement brings out his humanitarian side.
We are faced to a social problem: the
exploitation of child labor.

11. PROPOSITIONS
1) Status quo: Mr. McHenry makes the
agreement ignoring the way that the Moroccan
company works.
2) Mr. McHenry accepts the deal and tries to
convince Mr. Hachad not to employ young girls
(even indirectly).
3) Mr. McHenry accepts the deal only under the
condition of not employing young girls.
4) Mr. McHenry confirms the agreement solely if
Mr. Hachad offer them a training
5) Mr. McHenry breaks the contract

12. STATUS QUO: HE MAKES THE AGREEMENT
IGNORING THE WAY THAT THE MOROCCAN
COMPANY WORKS.
+
The company can earn money and
make profits
-
It causes a personal problem to Mr.
McHenry

13. 2) HE ACCEPTS THE DEAL AND TRY TO
CONVINCE MR. HACHAD NOT TO EMPLOY
YOUNG GIRLS (EVEN INDIRECTLY).
+
We do not compromise the
business and try to find a solution
-
Mr. Hachad may not accept because
all companies work this way

14. 3) HE ACCEPTS THE DEAL ONLY UNDER THE
CONDITION OF NOT EMPLOYING YOUNG
GIRLS.
+
Mr. McHenry does not encourage
the exploitation of children
-
Employ adult it is more expensive
to the company

15. 4) HE CONFIRMS THE AGREEMENT
SOLELY IF MR. HACHAD OFFERS THEM A
TRAINING
+
Children can have an education
-
There is still child labor

16. 5) HE BREAKS THE CONTRACT
+
Mr. McHenry will have an easy
conscience
-
Loose an opportunity to earn money
Not stop the exploitation of children

17. THE BEST PROPOSITION
Number 4:
He confirms the agreement solely if Mr.
Hachad offers them a training

18. WHY IS THIS THE BEST PROPOSITION?
 Good international image for SOMARTA
 The girls can have a diploma
 M. McHenry does not contribute to the child
exploitation
 The agreement is saved.