1. The key ethical issue of American clothing company.
a) The key ethical issue of American clothing company is it has to do something to meet the losses in slack sales periods caused by too many workers such as layoffs. However, such behavior is deviated from the company’s fundamental tenet for this company take the concept that apparel manufacturing should treat worker as well as possible.
b) Reasons for such ethical issue are 1) Treating employees well is the company’s core belief. Randomly laying off workers contradicts to the values, but 2) the reality force determines that the company has to do something to avert the loss. Therefore, American Clothing Company faces the dilemma of making trade-offs between these two.

2. Two critical stakeholders of American Clothing Company and how they are affected.
a) Two critical stakeholders of American clothing company are employees and shareholders. Employees should be considered as critical stakeholders because their benefits would be undoubtedly affected if being fired. Then, shareholders’ benefits can also be affected in that the profitability of the company would be influenced by the resolution of the problem.
b) If the company chooses to lay off their employees, 1) for affected employees, they will lose their economic sources, and have to find another job for survival. 2) For shareholders, the company may lose their reputation for the layoff, which contradicts to their public image. Thus their long-term profitability may be damaged.
c) When the company does not, 1) for employees, they are contributors who still earn money for the company thus they do not have to worry about their job, their profits are guaranteed in some degree even though their salaries may be reduced because of less orders. 2) For shareholders, keeping so many employees means a direct loss for the company’s short-term benefits.

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