Goodbye, Sampson Inc. Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Goodbye, Sampson Inc. Case Solution

Alternative Courses of Action with Consequences

David Dunworthy should consider the following courses of action with appropriate consequences:

Suggest that Dunworthy allow Sampson Inc. to go, but I believe that practically, Dunworthy is forced to advise the city to do everything possible to retain Sampson Corporation

Consequences

Sampson's escape will lead to a loss of thousands of dollars (as stated in the case) from wages and income taxes. Loss of projected $300,000 in municipal wages tax contributions and $92,000 in head tax contributions.
Sampson's departure from the city will have a detrimental impact on the business sector. Annual reduction of retail market in the core business area of about $1.1 million.
Other companies may argue that if the local government is unable to retain its second-largest employer; what assistance could they expect from other companies?

Suggested the idea that the state should establish a plan to retain Sampson in the city, taking into account the available funds and the federal government's involvement.

Consequence

Since Sampson Corporation has a significant effect on the Metropolis economic system, the financial impact should be addressed as well.
In intended to facilitate Sampson Inc., federal funds should be given to the Metropolis municipal government.
It will cost $32 million extra for Sampson Inc. to construct its headquarters outside of downtown.

Propose that the city create a plan to provide tax relief to retain Sampson in the metropolitan area.

Consequence

Metropolis's tax revenue will get affected.
In the long-term; the money they spent on Sampson Inc. will be repaid to them in the form of Sampson’s taxes.
Additionally, the neighborhood should be engaged. With regards to tax breaks, the city government should consider the concerns of other companies.

Conclusions

The city's main economic issue was that Sampson Corporation; the city's second-largest employer, desired to relocate to the suburban areas due to the state's individual income tax framework.
Sampson, Corporation, which originated as a divested subsidiary of the well-known and massive Clemson Chemical Company, had existed in the shadow of the large corporation for its entire existence.
Retaining Metropolis' 2nd biggest employer and remaining as self-sufficient as possible benefited the state. Because Sampson, Inc. contributed approximately $100 million annually to City.
If the government reduces the tax rates, this will affect the tax budget. Additionally, since 1950, no new non manufacturing companies had been formed, and the city's 12 largest non manufacturing firms had grown at an extremely insignificant rate during that period.
If the government decides to retain Sampson Corporation, this will affect neighborhoods, if the city administration decides not to retain Sampson Inc., this will have an impact on 10 households that would need to relocate if the headquarters were constructed on the vocational school area, and the administration should compensate neighborhoods.
Suggest that Dunworthy allow Sampson Corporation to go, but I believe that thoughtfully, Dunworthy has no option but to advise that the city do everything possible to keep Sampson Inc. Because of the loss of city wages taxes projected at $300,000 and head taxes approximately at $92,000, damage of retail trade in the central business district totaling approximately $1.1 million annually.
Propose that the city create a plan to retain Sampson in the city, including tax concessions since the city's revenue would be impacted. In the long term, the money they spent will be repaid, and the neighborhood should be engaged as well.
Suggest that the city create a plan to retain Sampson in terms of development expenses since Sampson Inc. would spend $32 million more if they construct their headquarters in the city rather than downtown.

Recommendations

Suggested the idea that the state should establish a plan to retain Sampson in the city, taking into account the available funds and the federal government's involvement.

Inform the city administration, Mayor William Williams, of the proposal (on an individual basis). "Stay informed about elected authorities.")
Before the local government implements; it should engage with the neighborhood and other business leaders. By doing so, each party will have an opportunity to voice their concerns for the two sides to reach an agreement.
The municipal administration should consider the neighborhood in every choice it makes during the development phase.
Because the city government's budget is only $30 million, the city government cannot provide financial assistance to Sampson Inc. on its own; this is why the local government is in discussions with the federal government about providing federal grants to the Metropolitan city administration, which will then facilitate Sampson Corporation.
If the federal government invests money, it will be repaid via the Sampson Corp. taxes.
Organize presentations for the media on the strategy.
Communicate the plan's objectives, execution timeline, and impact on affected parties.
Provide benefits to stakeholders, such as: families and corporations.............................

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