You have been approached by a national advocacy group that has discovered that some of the jobs at Foods R Us pay less than what they consider a living wage. These are jobs in the stores and warehouses, not the headquarters. This advocacy group wants the wages of that group raised to $30 per hour. This would be a doubling of the wages of those employees. Your CFO estimated that this wage increase would have caused 2018 net income to drop from $800 million to $400 million. The 2018 net profit margin was 2.6% of total revenue and it has been consistently at that level for many years.

Another group has approached you. This group believes that the price of food in Foods R Us is too high and beyond the reach of many consumers. They want you to drop the prices so that more people can afford to shop there. This group is making an argument about the right to good nutrition. This was a fairly general proposal, so your CFO was unable to quantify the effect.

Assume that you are looking at this from a social responsibility point of view and have read the works of Milton Friedman and Archie Carroll. You are also familiar with the concept of stakeholder analysis, and you have already studied the company’s strategic analysis.

Explain what decisions you will make to address or not address the interests of each of these groups. Be sure to make a compelling argument. You have to make two decisions (the wage increase and the price drop), and don’t pick the “we need to explore this more” or “we need more information” position. Focus on the quality of your argument, not whether you think I would side with Friedman or Carroll. I could make an argument for either side in these situations.

Answer rating: 100% (QA)

Addressing the Wage Increase Considering the advocacy groups proposal to increase wages for store and warehouse employees to 30 per hour a decision ne... View the full answer