Case Study to Accept Goodweave

Question 1: The CEO of this retail company that sells mid- and high-end hand-woven carpets is probably concerned about his rug suppliers because he is a forward thinking leader. He most likely realizes that the use of child labors at the production level of his company's carpets is a moral issue of international importance that affects numerous countries and individuals. Actively addressing the company's use of child laborers could positively impact its reputation, sales and competitiveness, while waiting to take action may negatively impact the company. The CEO has the opportunity to ensure no child labor is used in the production of its carpets and make his company more socially responsible.

The company's potential use of child labors may present the CEO with a personal, moral dilemma about the ethics of such a practice. Like some level 5 leaders, the CEO might have more inspired standards, making him simply unable to tolerate mediocrity in any form and utterly unwilling to accept ‘good' organizational practices or ideas as ‘good' enough for his company. He may see the chance to make a positive impact on the long-term socio-economic development of individuals affected by child labor. As argued by Collins, the CEO's ambition might be to leave behind a stronger company, and to do so, would require him to detect inappropriate methods in the company's carpet production and steer the company towards more ethical standards of conduct.

It is an organization's leader who is responsible for creating its vision and strategies, and thus by doing so, articulate practices and procedures deemed acceptable within the organization. Leadership in this situation is setting a framework and standard of conduct for the entire company. What is crucial about a vision is not its originality but how well it serves the interests of important constituencies, which include workers, customers, suppliers, and producers. The CEO most likely understands that the use of child laborers is not in the interest of the company's workers at the production level, nor of its consumers. As the majority of consumers deem the use of child labor an unacceptable practice, the CEO's more forestalling concern could be that the company's public image or reputation could be compromised if consumers were to find out that the company obtains its rugs from producers relying on the immoral and possibly illegal use of child laborers.

The function of leadership is to be able to cope with and produce change. It is important for leadership to focus on leading the company forward by approaching the situation at a global scale. Considering that the international community increasingly finds child labor an unacceptable business practice, the CEO must be able to change his company's production methods to remain competitive amidst important developments in the market and the needs of his constituencies. Thus, the company's removal and rehabilitation of child laborers from the production level could make the company attractive to a wider-range of consumers, and thus increase the company's sales by creating a level of trust in consumers toward the company's ethical standards as well as give it a more competitive position against other firms in the global marketplace. As the company's leader, the CEO is exhibiting executive-level expertise, by acting in a strategic manner, understanding the dynamics of the industry, and being future-oriented.

Question 2: I recommend that the company join Goodweave to capitalize on this opportunity of ensuring no child labor is used in the production of its carpets and promote a social good. This will not only potentially benefit the company's reputation, sales and competitive position, but also simultaneously serve to stop a detrimental cycle of exploitation/poverty, and even create an occasion for social progress.

The company is currently buying its hand-woven carpets through intermediary suppliers, of which most are not ‘transparent'; as about half of the current products purchased by the company use least some ‘child labor'. It is obvious that the company does not currently have the proper mechanisms to prevent child labors from working in its carpet production. While establishing direct links with producers and implementing our own monitoring system is a strong option as it gives our company control over production standards, it is an extremely costly option and we might not have the sufficient knowledge or expertise to achieve the desired objectives. Rugmark's experience and multifaceted system would ensure that the company's products were created according to certain ethical standards, such as not using child labor, in the most efficient and cost effective manner. For example, more than 2,000 children have been rescued from child labor by this program. Rugmark would give the