CASE STUDY
SOUTHERN RECREATIONAL VEHICLE COMPANY
1. The inducements offered Southern Recreational Vehicle
Company are not unusual. Such inducements are offered in
anticipation of the benefits to be derived from the relocation
decision. Among the more common financial inducements is an
arrangement under which a community development firm will
purchase a plant facility and lease it to a company on a longterm basis. Whenever financial inducements are extraordinary,
management should realize that there must be something
undesirable about locating in that community.
LO 8.1: Identify and explain seven major factors that affect location decisions
AACSB: Application of knowledge
2. A major problem in relocation decisions is the reluctance of
executives to move from industrialized, heavily populated
areas to small, rural towns. Often, the educational, recreational, and cultural opportunities are lacking. In addition,
residential housing, shopping facilities, medical facilities,
and adequate police and fire protection play an important
role in the decision of executives to relocate.
LO 8.1: Identify and explain seven major factors that affect location decisions
AACSB: Ethical understanding and reasoning
3. Matters of economics are certainly justifiable reasons to
relocate. If a firm can generate more revenue, operate more
efficiently, and experience lower costs at another site, reloca
tion should certainly be considered. However, the allegation
that the union forced unreasonable demands on the company
should be seriously questioned. Concessions and provisions
are bargained; they are not forced on either the company or
the union.
LO 8.1: Identify and explain seven major factors that affect loca
tion decisions
AACSB: Ethical understanding and reasoning
4. Whenever the management of a firm decides to cease opera
tions in a given location, it has the responsibility to aid its
employees in finding suitable employment in that communi
ty. Such assistance can take various forms, including
personal contacts with other employers and personal recom
mendations. In addition, the employer has a responsibility to
notify its employees of the decision as soon as it has been
finalized in order to give each worker ample time to find
employment elsewhere. Finally, severance pay should be
considered in an attempt to alleviate financial hardships on
workers who have been unsuccessful in their attempts to find
employment elsewhere. If the company has more than 500
employees, closing to avoid unionization is illegal.
LO 8.1: Identify and explain seven major factors that affect location
decisions
AACSB: Ethical understanding and reasoning
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Operations Management: Sustainability and Supply Chain Management, 12th Edition (Free Ebooks Download)
Jay Heizer, Texas Lutheran University
Barry Render, Graduate School of Business, Rollins College
Chuck Munson, Carson College of Business, Washington State University
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