 CASE QUESTIONS 

1. Do you feel that LS&C is acting

in a responsible manner in closing its North American production operations?
Explain.
Ans. When we look at the strategy according to the organization’s perspective, it is a
good decision because in order to survive the company must adapt its production
practises as well as apply new management changes, however when we examine this
from the view point of American Economy and employment rate, we can observe that due
to the company moved out of North America there has been a decline in employment rate
and also a reduction in industrial activity (deindustrialization).
But still the company claims to have establish a community Trust Fund to assist
communities affected by the plant closures and that extensive separation packages will be
issued to dismissed employees it behaves responsibly by caring for those who are harmed
by the act.
2. Do American companies like LS&C that transfer production to lower-wage
countries hurt or help the economy of the United States?
Ans. Companies like LS&C hurt the US economy by shifting production to lower wager
countries as they no longer contribute to the GDO and welfare of the US economy.
Because the manufacturing process is no longer carried out in the United State,
employment of US sourced raw materials and skills. As a result, the company’s
production process no longer contributes to the US economy and its percentage of
contribution decreases. As a result, the closure of these business and their relocation out
of the United States harms the Us economy.
3. Evaluate the soundness of the strategic shift away from production and towards
a focus on design and marketing.
Ans. The strategy changes away from production and towards a concentration on design
and marketing has been a step towards reinforcing the company’s long standing brand
name and reputation. The corporation began contracting its production manufacturing to
independent producers and ended its North American manufacturing process. LS&C will
be able to focus on products design and marketing as a result of the shift in approach,
freeing up resources that were previously allocated to manufacturing. Because the job has
now been given to independent producers, the company’s manufacturing load will be
reduced.
 4. Explain the role of FDI for the host and home country.
Ans. FDI plays the following roles for the home and host country: -
For home country:
 There will be outflow of FDI.
 The outflow will lead to decrease in the job opportunities of the residents.
 The social gaps will increase.
 Also, for the FDI the home countries need to check the availability of necessary
factors of production at the host country, so that the FDI could be beneficial.
For host Country:
 There will be inflow of FDI.
 The inflow will be helpful in job creation and others employment generation of the
country.
 It will be beneficial for the country as it will also bridge the social gap between the
countries.
 The host country needs to check the regular supply of the raw materials so that the
investors do not need to suffer for any reason.
 The host country needs to regulate the laws related to investment and give relaxations
to the investors so that they can work smoothly. Etc.