Real-Life Decision Making -- Solution
You recommend the company not go ahead with the expansion.
You carefully analyze the risks involved and decide there are no reliable solutions for the very real risk problems on your list. Earthquakes are so prevalent in the region that even an earthquake-proof building can't guarantee against massive losses. Fire safety guidelines are too difficult to enforce in foreign locales.
Fluctuations in currency exchange would be too much of a costly headache to juggle. There's no way to control or predict the civil unrest that could seriously stall operations. Child labor is too rampant in Asia to monitor from a distance. You deem it to be too risky, and recommend against the move.
Your company stays home and continues operating with its North American plants alone. You've avoided the stigma of using Asian resources, but you've also set yourself up for taking a back seat to the many companies who took that risk.
You can't compete with their output and bottom line savings. Profit is pitiful, and by the time the year's earnings are announced, you wonder if it was perhaps a worse risk to keep business grounded.
"You're getting a chance to help people get things done safely," says risk manager Ruth Unks. "If they want to implement a program and someone's told them they can't do it because it's too risky, I get the chance to say you know what, we can do this if we first manage it, if we sit down and work through it together. That gives us all a real sense of accomplishment."