I think CACAO would have gone bankrupt with the amount of overhead they were paying. It also provided Jobs and opportunity to people who were less fortunate that an Americans. With that said it does take away Jobs from Americans who worked there for a number of years. So some may see that CACAO took an unethical approach to the solving the problem. Also the company did not follow up with the working conditions of the factory in China until there was a strike, therefore making the company look unethical. What were the economic and social costs and benefits of this decision?

With moving to another country and lowering cost, this allowed the company to stay competitive. Also, with lowering overhead, this allowed CACAO to sell their product to the customer at a lower price. The social cost would be the destruction on the company’s “family’ and the bad look of encouragement of inexcusable conditions of company’s employee across seas. If CACAO did not move the production to China, they would have gone bankrupt or lose a majority of their customer base to cheaper toys. It was unfortunate for the workers, but CACAO had to make a decision because they could not find a better way to stay completive and lower cost.

Assuming that the NET reporting was accurate, is it ethical for the CACAO to continue working with Kin Kiwi? Yes, I believe the only way for CACAO to keep working with the company is to make sure the factory is complying with the laws so that there won’t be future problems. They must find a way to please everyone and still make a profit. Is it possible that the CACAO did not know about the labor problems? No, there are so many group and organizations out there that look for this kind of behavior and I am sure there numerous attempts f employees trying to reach out to CACAO about the conditions.

And those employees were either let go or the attempts were brushed under the carpet. What steps can the CEO of CACAO take to ensure that the CACAO will not appear in the NET again as an enterprise that benefits from sweatshop labor? CACAO needs to make it clear that factory understand the labor condition laws and that there will be repercussions for the mangers of Kin Kiwi who do not comply such as leaving, and that they will be monitored. Etch-a-Sketch By Backtracker