Business Ethics: An Interactive Introduction Should Kare Recommend a Sit-'eatshop? Kate Bond is the CEO of Seinfeld Textiles, which manufactures clothing in a single factory in Canada. Canada has recently signed a free trade deal with Ismiristan that removes all barriers to trade on clothing between the two countries. The ST board of directors is unhappy with the prospective future protability of the ST clothing factory in Canada. Most of the nancial value in ST is in its brand, in its reputation for quality clothing, and in its contracts with retailers. If ST were to sell its brand and its goodwill to another clothing company, then its owners would receive a good price. Its owners could then easily find new, more protable investment opportunities in Canada. Kate thinks that if ST continues production in Canada, then competitors offering cheaper imported clothing will probably take away some of ST'S customers. ST provides well-paid, unionised jobs, and is the biggest employer in its community. Kate has lived all of her life in that community. Some of her family and many of her friends work for ST, and her best friend runs the local department store. ST closing its factory would be a disaster for all of them. Kate has asked her VP of production to recommend how to cut costs, and his committee has recommended that ST close the local factory, and contract with a broker to arrange for the same lines of clothing to be manufactured in garment factories in Ismiristan, where wages are much lower than in Canada. Out-sourcing clothing production to garment factories in Ismiristan could be a financial blessing for the people there. Most of the garment workers in Ismiristan are young, rural women who come to the cities, stay in dormitories, work long days in the factories, and send money home to their families. Their wages are very low in absolute terms, but higher than the wages they would receive in the countryside, if they could nd any work. They are usually very poor and would otherwise have no employment prospects or sources of income. Though they do relatively well nancially, the garment workers face other problems. They pay high rents to the companies for their dormitory accommodation, and they must buy their food at the company store. Managers often order them to work overtime at straight wages. Supervisors treat them disrespectfully, and sometimes ask for sexual favours. No laws permit them to form unions. Their culture is patriarchal, so fathers, brothers, or husbands control the money that they send to their families. Many of them are young mothers who must go long periods without seeing their children. If ST were to outsource its clothing production, its employees in Canada would receive small severance packages, as well as six months of employment insurance from the government, though at about half of their regular salaries. They would have other employment opportunities in Canada, though most such opportunities would require relocating to a different, oil-rich, province, or require a long commute every few weeks to see their families. Selling their homes would be dimcult if ST closed its factory, and their houses would lose much of their value. What should Kate recommend to the board