Yogo Apparel, a manufacturer of women's athletic wear, has seen explosive growth in

the sales of its most popular yoga pant over the past two months, thanks to some very

flattering publicity. Sales are so strong, in fact, that the company's US$-$based supplier cannot

keep up with demand. The company's president, Susan Keough, receives a bid from an offshore

supplier that promises to make the pants in its own facilities at $10$ times the capacity of the US

supplier and at two$-$thirds of the cost.

Keough asks one of her managers, Steven Little, to investigate the offshore suppliers'

history of workers'$-$rights complaints. The news is not good; Little reports that the supplier has

been accused of multiple instances of worker abuse, including forced overtime, sexual

harassment, and suppression of organized labor. Keough and Little approach several other

vendors, but none can produce the quantity Yogo needs at the price it is able to pay.

Imagine that you are in Keough's situation. Apparel stores and Yogo's own website are

inundated with orders for the yoga pants. Yogo cannot keep up with the demand without

looking elsewhere. Yogo's stock has risen dramatically as a result of the surge in sales, and

shareholders expect the growth to continue. What are the possible ramifications for Yogo if

Keough chooses to use this supplier? What type of exposure does Yogo have$-$legally, in terms

of potential damage to its reputation, and in terms of risk to profit?

What if you are in Little's position and Keough chooses to move forward with the

offshore supplier? What would you do$?$