Mgt 300 Chapter 4

Chapter Four

After the passage of NAFTA. many U.S. companies shifted production operations to Mexico to take advantage of lower labor costs and lower standards for environmental and worker protection. As a result, they cut their costs and were better able to survive in an increasingly competitive global environment. Was their behavior ethical-that is, did the ends justify the means?

I do not believe that these companies are in the wrong for moving operations to Mexico due to the passage of NAFTA. As a manager of an organization, it is your responsibility to first act within the ethical standards of the law, and second to create profits for the stockholders. Management is not supposed to make decisions regarding the ethical decisions outside of the law that could affect the profits of the company because they are not owners of the company. If moving operations to Mexico will lower costs and raise profits, unless the stockholders are opposed to the idea, it is in the best interest for the operations to be moved.

Although the ethical standards are different in Mexico, the organization is not breaking any laws as long as they stay within the ethical standards put forth by the Mexican government. Many may argue that it is more ethical to stay in the United States and abide by our standards even though it will cost the company more money, but I do not believe that this is necessarily the best decision. Ethical standards are always changing and evolving, as we have seen in the United States, and the fact that a less-developed country like Mexico doesn’t possess the same standards as the United States doesn’t mean that they are not working to boost their economy and therefore also boost their residents’ standard of living. For a country like Mexico to set standards similar to ours at this point in time, they would not be able to financially grow as they do not have the same resources as the United States. They are actively working to...