Read the case and make an ethical decision based on the previous ethical theories and business philosophies discussed in lectures and recitation classes. For example, base your decision on our discussions on Consequentialism. In addition, be sure that you view all the stakeholders and how your decision will affect them. This will be a short essay (at least two pages with probably no more than three pages) with at least one citation (APA) from one of the ethical theories that have previously been discussed. This paper will be doubled spaced, coherent, concise and written at a college level.
Case A: The Residential Construction Industry Dilemma
You are the owner of a residential construction company in South Texas that has been profitable for over 25 years. You have seen many changes within your industry and have successfully adjusted your competitive strategies to take advantage of thse changes. Within the last 5 year, the cost of building materials and skilled labor has steadily increased with the selling price per square foot for your homes remaining flat resulting in a decrease in profits for your company. However, many of your compettitors and new entries into the market have been able to produce a steady increase in profits. After doing a strategic analysis of these direct competitors, your company discovers that they have been able to reduce their labor costs significantly through hiring subcontractors that use undocumented laborers. The cost savings for these competitors has resulted in a normal cost of $80.00 a square foot reduced to $50.00 a square foot. On an average home of 2000 square feet, the cost savings is $60,000. With the average home selling for 110.00 dollars a square foot you realize your company is loosing $60,000 dollars per home. On avarage, your company is building 10 homes a year resulting in a potential annual loss of $600,000.
After having the above information in your possession, you begin to see the cost benefits of using the subcontractors with undocumented workers. However, you are having reservations because you do not know what the legal ramifications are for hiring these subcontractors but your personal feelings are that everyone should have a right to work if they are in the United States. In addition, you have recently read that the majority of the money that is paid to these undocumented workers does not stay in the local economy but is sent back to the undocumented worker's countries of origin. Lastly, you know your current employees and families will be financially devastated if you make a decision to use the cheaper subcontractors but your business education taught you that profits should be one of the key factors in making any business decision.