Dynamic Textiles is a foreign owned multinational corporation operating in Malaysia for the past 10 years. This corporation hires female and handicapped workers who are qualified and skillful to produce trendy blouses for export to the U.S and EU.

Currently the corporation earns normal profits. After analyzing its long-term business returns, in view of maximizing profits, the management decided in a meeting to close down its operation in Malaysia and start a new business in China. The justification behind the closure is to reduce the costs of operations as the Corporate Planning Department has done a study and found that labour cost in China is comparatively lower. In addition, there will be cost savings die to lower costs of raw materials to produce the final products. With the closure however, the corporation would have no choice but to retrench its Malaysia employees.

The decision was made without consulting the in-house workers union, since the management is of the view that it has the right and power to make such strategic decisions for the business sustainability. Moreover, it strongly believes that its shareholders interest should be given priority over the interests of other stakeholders. The decision to close down operation was thus announced to all employees a day after the managements meeting. The in-house workers union immediately arranged for a protest in front of the managements office to prompt public attention.

1. If you were the CEO of Dynamic Textiles, would you close down the Malaysian operation? Explain your reasons.

2. In your opinion, what would be a better business strategy for Dynamic Textiles? Justify your answer