Yanni is the CEO of Butterfly, Inc., which manufactures tractors. A tornado recently destroyed one of the company’s plants which was near Farmfield, Arkansas, a town with a population of roughly 5,000 people. Farmfield is a two-hour drive from the nearest city, Little Rock. 

The good news is that insurance payout will cover the full cost of rebuilding. The bad news? Manufacturing plants are much more expensive to build and operate in the U.S. than overseas. Yanni has asked Adam and Zoe to present the pros and cons of relocating to someplace cheaper.

Adam says, “If we rebuild overseas, our employees will never find equivalent jobs. We pay $20/hour, and the other jobs in town are mostly minimum-wage. And remember how some of the guys worked right through Christmas to set up for that new model. They have been loyal to us –we owe them something in return. Going overseas is not just bad for Farmfield or Arkansas, it’s bad for the country.

Zoe responds, “That is the government’s problem, not ours. We’ll pay to retrain the workers, which h, frankly, is a generous offer. Our investors get a return of 4%; the industry average is closer to 8%. If we act like a charity to support Farmfield, we could all lose our jobs. It is our obligation to do what’s best for our shareholders – which, in this case, happens to be what’s right for us, too.” 

Questions: 

1. What ethics traps does Yanni face in this situation?

2. Do you agree with Zoe’s argument that it is the government’s responsibility to create and protect American jobs and that it is a CEO’s job to increase shareholder wealth?

3. Imagine that you personally own shares in Butterfly, Inc. Would you be upset with a decision to rebuild the manufacturing plant in the U.S?

4. If you were in Yanni’s position, would you rebuild the plant in Arkansas or relocate overseas?

5. What is your Life Principle on this issue? Would you be willing to risk your job to protect your employees?