International Business: Competing in the Global Marketplace
International Business: Competing in the Global Marketplace
11th Edition
ISBN: 9781259578113
Author: Charles W. L. Hill Dr, G. Tomas M. Hult
Publisher: McGraw-Hill Education
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Chapter 5, Problem 1CTD
Summary Introduction

To explain: The possible course of action for the American executive.

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Explanation of Solution

The possible course of action for the American executive:

The situation of child labor is not uncommon in most of the underdeveloped countries. While the manager is right about the possible consequences of removing the girl from the job, allowing the girl to operate as a child labor is not the right thing to do. The notion of the manager is right but the course of action is wrong.

The American executive must look into developing a corporate social responsibility fund to provide free education and livelihood to underprivileged children like her in the area they operate. Regardless of what is the situation admitting the girl as a child labor is wrong. The American executive must take the steps to ensure all these children get the minimum education possible so that they can create their own life.

The actions of the American executive will also bring goodwill among the employees, consumers and other stakeholders. It will also make a strong statement that the company cares about the people apart from generating profits.

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An employee contributes $15,000 to a 401(k) plan each year, and the company matches 10 percent of this annually, or $1,500. The employee can allocate the contributions among equities (earning 12 percent annually), bonds (earning 5 percent annually), and money market securities (earning 3 percent annually). The employee expects to work at the company 20 years. The employee can contribute annually along one of the three following patterns: Equities Bonds Option 1 60% Option 2 Option 3 50% 40% 40 45 50 Money market securities 0 100% 5 100% 10 100% Calculate the terminal value of the 401(k) plan for each of the 3 options, assuming all returns and contributions remain constant over the 20 years. Note: Do not round intermediate calculations. Round your answers to the nearest whole number. (e.g., 32) × Answer is complete but not entirely correct. Option 1 Option 2 $ 915,588 X $ 100,785 x Option 3 $ 88,548 x
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