This article talks about how the U.S. Department of Agriculture will allow poultry slaughtered in the U.S. and Canada to be processed in China and returned to the U.S. for consumption. Also, it focuses on many concerns - safety, consumer rights, and plant inspections - that these changes bring. However, many of these concerns are viewed through the eyes of a consumer.

Please, evaluate the same changes (the U.S. Department of Agriculture will allow poultry slaughtered in the U.S. and Canada to be processed in China and returned to the U.S. for consumption) through the eyes of a firm. Imagine that you are one of the senior executives at Tyson Foods Inc.

What would you do once you receive the news about these changes in the external environment? Would you consider outsourcing some/all/none of the operations to China?

Please, make a very clear connection between your reasoning and the material we covered concerning corporate strategy.

Chicken Processed in China Triggers U.S. Food Safety ProtestsBrian Wingfield and Shruti Date Singh

September 26, 2013 6:46 PM PDT

Food-safety advocates are raising alarms over a decision by the Obama administration to permit chicken processed in China to be sold in the U.S. even after several high-profile incidents of food contamination.

The U.S. Department of Agriculture, in addressing a decade-long trade dispute over farm imports, said it will allow poultry slaughtered in the U.S. and Canada to be processed in China and returned to the U.S. for consumption. Critics are vowing to fight the decision, which they say puts consumers at risk due to lax Chinese factory oversight.

"The Chinese food-safety system has had significant failures in the enforcement of its food-safety laws and regulations," Senator Charles Schumer wrote in a Sept. 16 letter to U.S. Agriculture Secretary Tom Vilsack.

The issue is the latest flashpoint for U.S. concerns over the safety of goods from China, which since 2007 have included tainted baby formula and evidence of the chemical melamine in pet food and eggs. China in recent months has had an outbreak of avian influenza in its chicken flocks and in March, Shanghai authorities retrieved more than 11,000 dead pigs floating in a river.

"Consumers should know that any processed poultry from China will be produced under equivalent food safety standards and conditions as U.S. poultry," the Agriculture Department said in a fact sheet.

No Fear

Poultry producers say almost all the chicken eaten in the U.S. will still be produced and processed domestically. The U.S. government currently allows Canada, Chile, France and Israel to export processed poultry to the U.S.

"Ninety-nine percent of the chicken we consume here is hatched, raised and processed in the U.S.," Tom Super, a spokesman for the National Chicken Council, a Washington-based industry group, said in an e-mail. "We don't expect that to change any time soon."

Officials from the Chinese embassy in Washington didn't respond to e-mail or phone requests for comment.

The U.S. last year exported $354.1 million worth of poultry products to China, representing about 7 percent of total U.S. poultry exports, according to Census Bureau data. The U.S. doesn't currently import poultry from China.

There's a concern that this might be the first step to that," Chris Waldrop, director of the Food Policy Institute at the Consumer Federation of America in Washington, said by phone.

Tyson Foods Inc., the largest U.S. meat processor, chicken producer Sanderson Farms Inc., and McDonald's Corp., the world's largest restaurant chain, are among companies that don't plan to import processed chicken from China, according to company officials.

Stronger Safeguards

That hasn't stopped Democrats in Congress, including Senator Sherrod Brown of Ohio and Representative Rosa DeLauro of Connecticut, from seeking assurances from the USDA that food supplies will be safe. New York's Schumer has asked for additional audits of Chinese plants and more inspections of U.S. meat imports.

There is precedent for an accord for China to process U.S. food items. The U.S. currently allows shrimp to be sent to China for processing, including breading, Theresa Eisenman, a Food and Drug Administration spokeswoman, said in an e-mail.

The U.S. last year imported $1.9 billion worth of seafood from China -- far more than any other food product, according to Census Bureau data. Shrimp and prawns accounted for almost $70 million worth of the goods.

Labor Intensive

"There will probably be some company that can see some niche market" for chicken shipments from China to the U.S., Toby Moore, a spokesman for the USA Poultry & Egg Export Council based in Stone Mountain, Georgia, said in a phone interview.

Processing chicken is a labor-intensive endeavor that can't be done solely by machines and the "lower cost in China is the advantage," Chris Hurt, a professor of agricultural economics at Purdue University in West Lafayette, Indiana, said in a telephone interview. Those savings in labor costs can counterbalance the higher price tag to ship the end product, Hurt said.

Food-safety advocates have been watching China closely this year as the U.S. government reviewed the purchase of Smithfield Foods Inc., the world's largest hog and pork producer, by Hong Kong-based Shuanghui International Holdings Ltd.

China does not have a food-safety system that allows for any level of top-down management like we have in the United States," Patricia Buck, director of outreach and education for the Center for Foodborne Illness Research & Prevention in Raleigh, North Carolina, a non-profit food-safety advocate, said by phone.

Awaiting Identification

The next step is for China to identify companies that will process imported poultry, Stacy Kish, a spokeswoman for the Agriculture Department's Food Safety and Inspection Service, said by phone. Processed chicken from China must be labeled as a product of the Asian nation, according to the agency.

Food-safety advocates say that while poultry processed in China would have to be labeled, chicken that's repackaged into chicken nuggets or wings and served in restaurants wouldn't necessarily carry the designation.

Consumer Rights

Even though we're going to be shipping our poultry to China, there's no guarantee that that's what we're going to be getting back," Tony Corbo, a lobbyist with Washington-based Food & Water Watch, said in a phone interview. "There are all sorts of consumer right-to-know issues going on here."

Kish, with the Agriculture Department, said "We do not believe the product would be repackaged in the United States." If it were, it would have to be done so by Agriculture Department inspectors and labeled as a product of the U.S., she said in an e-mail.

In 2004 China asked the Agriculture Department to audit its processing plants so that poultry could be exported, according to the agency. The U.S. Congress in 2009 lifted a ban on Chinese-processed poultry, and after a final audit of China's plants in March, the U.S. agency in August agreed that China's facilities were equivalent to those in the U.S.

Under the terms of the agreement, chicken sent to China for processing must be raised and slaughtered in either the U.S. or Canada, and all poultry must be fully cooked at least 165.2 degrees Fahrenheit (74 degrees Celsius) before being sent back to the U.S. to be eaten. USDA inspections will occur at U.S. borders, and agency auditors will review.

Plant Inspections

The quality of those inspections may be subject to questioning, since the administration of President Barack Obama has yet to fully enact the 2011 Food Safety Modernization Act, aimed at being the most sweeping overhaul of U.S. food safety in 70 years. The administration this year proposed the first major regulations for domestic and imported food, which Congress called for after poisonings related to cookie dough, spinach, jalapenos and other foods killed at least nine people and sickened more than 700 in 2008 and 2009.

Food safety in China probably won't get better until consumers can freely speak out against or sue the government and corporations without fear of retribution, according to Bill Marler, a Seattle-based attorney and publisher of the trade newsletter Food Safety News.

"Until we have a real sea-change in the rule of law in China, I'd be suspect about importing food from China," he said in a phone interview.