Please read the case study and answer questions below:

Case Study

Rafa is the CEO of Ares, a multi-national enterprise that designs, manufactures and markets sportswear.In 2015, Rafa brokered a deal to outsource the production of sportswear to a factory located in Central Asia ('the factory'), where the hourly rate for production line workers is one quarter of the cost of Australian workers.Rafa's decision was purely a financial one - by reducing labour costs, he could increase the profitability of the company and protect and enhance shareholder value.

Roger, the Australian born production manager, has just returned from visiting the factory in Central Asia, and has some disturbing issues to report.Roger tells Rafa that he witnessed children as young as 12 years of age working on the production line.He also informs Rafa that the average working day of the production line workers is 15 hours, and they only receive 10-minute breaks every three hours.The factory manager has been known to fire employees because they were members of the local labour union, and does not allow union representatives in the workplace at any time.

Roger also has evidence that the factory is causing environmental damage. He shows Rafa videos of employees dumping rubbish from the factory into the local neighbourhood, and of toxic wastewater being pumped into a nearby waterway.Roger explains that there are no laws prohibiting the use of child labour, the dumping of rubbish or pollution of waterways in this region of Central Asia.In addition, local employment regulations do not regulate working hours and there are no laws protecting the rights of workers to join labour unions.

Rafa feels uneasy when he learns this news, but then decides to renew the contract with the factory for another 5 years.Roger is angered by Rafa's decision, and provides the evidence he collected to social media.The story results in negative publicity for Ares, with the company being accused of using 'sweatshop labour'.Many of the leading international sports players boycott the company and refuse to wear its apparel.In an interview with a major Australian current affairs program, Rafa defends his decision, explaining that the factory is operating within local central Asian laws, and that his (Rafa) primary responsibility is to maximise shareholder return. Moreover, he argues that the standard of living of the Asian factory workers and their families has improved considerably because of Ares' relationship with the factory.

Questions:

1. What is the issue of this case study and identify the issue of company facing? Define meaning of individualism and identify the concerns of the local Central Asia community regarding the factory operations there. (Support answer with a example)

2. Identify meaning of collectivism and what would happen Rafa renew contract? (Support answer with a example)

3. What is utilitarianism? Describe and identify Ethics and social responsibility issue of company? (Support answer with a example)

4. What are the different types of ethical principles and concepts that need to considered in any strategic decision making process that a CEO may incorporate into their determination of making and standing by a resource profit decision that within an international entity or operations? (Support answer with a example)

5. Which culture would be more likely to focus on external controls? Which cultures would you consider direct controls to be more important than indirect controls?

6. Rafa is the CEO of Ares, a multi-national enterprise that designs, manufactures and markets sportswear.In 2015, Rafa brokered a deal to outsource the production of sportswear to a factory located in Central Asia ('the factory'), where the hourly rate for production line workers is one quarter of the cost of Australian workers.What are two likely differences in the way these two Ares carry out the decision making process? Use Hofstede's cultural dimensions.