Share
Explore BrainMass

Evaluate the course of action taken by Day-O-Shoes. Was day-o shoes required to stop producing in Hattie? Is the US government saying that the embargo worked too well?

TextZ: international business law and its enviorment 6th/e isbn 0-324-26102-0

Question from page 280

1. evaluate the course of action taken by Day-o- shoes. How did Day-O-shoes balance its responisbility under us law to conply with the embargo with its need to remain competitive in the industry? What could it have done differently? evaulute the ethics of Day-O-Shoes actions.

2. was day-o shoes required to stop producing in Hati? were its competitiors violating US law by continuing to produce and stockpile their inventories? were they violating any moral code or even the spirit of the law by continuing to produce there? evaluate the risks taken by competitors in their continuing operations in Hati during the embargo

3. The embargo was intended to put economic pressure on hati so as to encourage political reform. Is the US government saying that the embargo worked too well? Do you think the embargo was lifted because of its impact on the Hatian workers or on the US firms doing business there? critics argue that the US governments atempts to use trade policy as a means of conducting foregin policy lead to confusion and uncertainity and are counterproductive evaluate this argument.

------DETAILS-------
Case

Your firm Day-O-Shoes manufactures deck shoes in the Caribbean island country of Hattie - the poorest nation in the western hemisphere. You plant there employs more than 400 workers and has always considered itself a good citizen of both Hattie and the US. Most of the shoes are imported for sale into the US where you maintain a 30 percent share of a competitive market. In 1991 the freely elected president of Hattie is removed from office by military officers who install a dictator of their choice in response the president of the US exercise authority under the international economic emergency powers act an issues executive order imposing a complete embargo on trade with Hattie. The Treasury department s office of foreign assets control is charged with enforcing the embargo you firm shuts down its production operations there one week prior to the date set for the embargo feeling some obligation to the unemployed works your company chief executive officer ships over ten ton of food and clothing for the people who have lost their jobs.
Believing that the US is serious about the embargo and that it would remain in effect until the rightful president was returned to Hattie you firm ships its US made raw materials such as rubber and soles and leather uppers, from Hattie to another factory is Costa Rica but you soon discover much to your surprise that your competitors are continuing to produce and stockpile their shoes in Hattie in the belief that the embargo would soon be lifted. Three months after you ceased operations, the US government decides to lift the embargo because it has resulted in the loss of 50,000 Haitian jobs. With no inventory of finished shoes and your raw material enroute to Costa Rica, your firm is unable to fill existing orders. Your competitors are ready however, to their shoes from Haiti immediately,

Solution Preview

1. Evaluate the course of action taken by Day-O-Shoes. How did Day-O-Shoes balance its responsibility under us law to comply with the embargo with its need to remain competitive in the industry? What could it have done differently? Evaluate the ethics of Day-O-Shoes' actions.

The U.S. Trade Embargo Regulations clearly prohibit U.S. firms and their foreign subsidiaries from entering into transactions with countries with which the U.S. government maintains a trade embargo, as well as with entities that are owned or controlled by those countries. Since Day-O-Shoes involved in overseas operations, it was expected to maintain an awareness of, and comply with, the requirements of these regulations. The company shut down its operations even before the date set for embargo.
This was unnecessary because the embargo restricted the sales of goods or services, not the manufacturing operations. As long as the company do not deal in or assist the sales of goods or commodities there was no problem. Day-O-Shoes made a ...

Solution Summary

You will find the answer to this puzzling question inside...

$2.19