Module 8: Purpose of the Corporation: Stakeholder Focus Employees

Module 8: Purpose of the Corporation: Stakeholder Focus – Employees

Carol: So you went to see the plant?

Dawson: I did. One wall was partially collapsed. Another has a hole in it as big as a school bus. And the roof was just gone. Broken glass, insulation, chunks of metal everywhere.

Carol: I'm so sorry boss.

Dawson: A category four storm. What can you say? I talked to our insurance guy yesterday, and we're fully insured. He's been by the plant, too, and he agrees it's a total loss. We'll get the full one hundred million sometime this month.

Carol: That's good news.

Dawson: It's something. But anyway, what I want to start putting together today is our basic strategy for what we're going to do about our factory.

Carol: Okay.

Dawson: I want to rebuild here in Miami.

Carol: I thought you'd say that.

Dawson: The insurance money will pay for a new high tech facility. We can be running again in six months – nine months tops -- and our output will be better than before.

Carol: Right…or we could operate in China and cut our costs dramatically. Alan, this is a golden opportunity to do what most of our competitors have done already.

Dawson: Some people in the Miami team have been with me for fourteen years. They built this company. What about them? They can't relocate to China.

Carol: They'll find other jobs.

Dawson: Not equivalent other jobs. Where are our floor supervisors going to earn a six-figure salary? And the assembly line workers, most of them have a high school education. Some even less than that. Where are they going to earn twenty dollars an hour? They have families to support.

Carol: They can retrain, relocate somewhere else.

Dawson: I can’t accept that. Carol: The shareholders won't like it. They're getting a 4 percent return from us, and they want the 8 percent that most of our competitors are returning.

Dawson: I don't care.

Carol: Alan, we've gone public. This isn't your company anymore.

Dawson: I'm the Chairman of the Board and I’m CEO!

Carol: You won't be either for long if this company doesn't start making more money. The shareholders will replace you.

Dawson: I started this company!

Carol: The shareholders won't care. At least not for long.

Dawson: Are you playing devil's advocate or are you just saying what you really think?

Carol: Does it matter?

Dawson: No. No, I guess it doesn't. And I'm sorry, Carol. I'm not myself…

Carol: I know, boss. All of this is just awful.

Dawson: Yeah, it is. It's just that…I mean, my personal feelings aside, unemployment is bad. The government needs to stop losing jobs. Where does it stop? Somebody has to protect the jobs.

Carol: It's the government's job to set the rules of the game to protect American jobs…

Dawson: I disagree with that.

Carol: Well, fine. But it is absolutely your job to look out for the shareholders.

Dawson: That's true enough.

Dawson: But I'm firmly decided on this. We're rebuilding here.

Carol: 100 percent sure?

Dawson: 100 percent.

Carol: I'm glad, Alan.

Dawson: So you were playing devil's advocate.

Carol: That's what I get paid for. Part of it, anyway. Dawson: True enough. I think with expanded capacity, and tax incentives for a new, environmentally friendly plant, we can be very competitive right here.

Carol: I'm absolutely behind you, boss.

Dawson: And I want to pay our workers their wages while the plant is being rebuilt.

Carol: You're kidding.

Dawson: No. I'm not.

Carol: Okay, I'm not playing devil's advocate now. We can't do that.

Dawson: We have to do that. The majority of them live paycheck-to-paycheck, and unemployment benefits won't cover half of what they earn.

Carol: Alan! There's no work for them to do, and there won't be for months.

Dawson: Even so. These are loyal employees.

Carol: Yeah, and they’re grown-ups who need to save money for emergencies.

Dawson: Most people don't do that.

Carol: Well they certainly should.

Dawson: Maybe they should, but they don't. If we don't pay them, they'll lose their homes.

Carol: Alan, I admire your concern, but you cannot ask the shareholders to foot the bill for wages when there’s no value being added to the company.

Dawson: We pay pensions to retirees – they don’t even work for us anymore.

Carol: That's different!

Dawson: In some ways, it is, and in some ways, it isn't. And I'm going to be giving up all of my pay for the rest of the year to help foot the bill.

Carol: Great. That will cover 10 percent of the costs.

Dawson: It's a start.

Carol: The shareholders will not stand for it.

Dawson: Maybe. But maybe not. I think most of them will trust me and appreciate that we're taking care of the people who make money for them.

Carol: Alan, I have to urge you to reconsider. If you want to pay wages to a handful of irreplaceable employees, okay, I can see a benefit. But most of the assembly workers' positions could be filed by any number of people, and the new folks could be trained in a matter of weeks.

Dawson: Everybody. We have the lowest turnover in the industry, and our customers have the fewest problems in the industry because of it. A happy and stable workforce matters.

Carol: And we have the lowest profit margins in the industry. And we're going to be losing market share during our manufacturing downtime. We need to be more careful than ever with the money that we have.

Dawson: There's more to business than profits.

Carol: Not to the shareholders.

Dawson: They put me in charge of this company. I'm the coach, and I call the plays until they say otherwise. This is the right thing to do, and we're going to do it.