MG 435 Assignment: Southern Recreation Vehicle Company

Case studies
(Author’s name)
(Institutional Affiliation)
Southern Recreation Vehicle Company
Question one
Following the huge losses that Southern Recreation Vehicle experienced while in Saint Loise Missouri, it had to relocate its operation to an area that offered it favorable inducements. Ridgecrest Mississippi provided some of greatest incentives that the company could not ignore.
First, Mississippi Power Light Company made numerous efforts in an attempt to appeal to labor intensive companies such as Southern Recreational Vehicle to set up their operations in the locality. These efforts aimed to boost the growth of the local economy. Among other inducement included municipal and county tax exemption for 5years. Water and sewerage services were offered for free. Finally, the county pledged to construct a second loading dock that offered free services to be located in the industrial park.
Question two
There are several problems that the company would experience once it had relocated from a densely populated area to a small town in Mississippi. First, the company is likely to experience shortage of labor. Although the small town offers cheaper labor compared to the densely populated industrial area, the shortage could have detrimental effects on the company’s productive capacity. Secondly, a populated industrial area has a huge customer base unlike a small town. Therefore, the company sales revenues are likely to dwindle due to diminished customer base. Finally, the company is likely to incur additional cost in recruiting and training new employees from the small town. This will not have been the case if it had remained at its previous location.
Question three
According to O’Brien, the company decided to relocate due to the continued increase in operating cost as well as the irrational demands by the company’s union. In Saint Louise Missouri, the company incurred a huge amount of production cost (labor and raw material) in spite of increased sales. The small town of Mississippi offered the company favorable terms that would help it reduce it operation cost. The company would obtain cheap labor; incur low utility cost since some of the utility services are free of charge and enjoy tax exemption. High operation cost is a justifiable reason for the company to relocate to the small town of Mississippi.
Question four
Once the Company has commenced transferring its operations, the employees have an ethical and a le...