In this case, what are the odds that an overseas call center would cost more than anticipated (often the case), lower the quality of service and thus the company's reputation, or actually be enough to stop the downwards spiral rather than just signaling that you're in a low value-add commodity business?
http://www.pennstatelawreview.org/116/3/116%20Penn%20St.%20L...
https://en.wikipedia.org/wiki/Revlon,_Inc._v._MacAndrews_%26....
> Accordingly, the board's actions are evaluated in a different frame of reference. In such a context, that conduct can not be judicially reviewed pursuant to the traditional business judgment rule, but instead will be scrutinized for reasonableness in relation to this discrete obligation.
lol at M&A is a "specialized edge-case".
I would imagine that a company as large as LS would have used some analysis and external/internal data to estimate the overall costs of such a move (which would include the cost of lower quality of service etc). And they must have still found the move cost-effective.
It's slightly insulting to LS employees to think that they would know less about the cost-effectiveness of this move than us. Moreover, this move seems drastic. When you're making such drastic moves, you're likely doing so to be able to survive. In such cases, lower quality of customer service and poor signals etc take a back seat.
> There's no legal concept of the oft-asserted “fiduciary duty"
... I can assure you that "fiduciary duty" is very much a legal concept.
That doesn't mean that cost shouldn't be considered, only that there's no support for the assertion that “cost is definitely a more important factor” because reasonable people can quite legitimately come to different conclusions. I might think the overseas call center is reasonable, you might think that you'll be able to offer a better customer experience by keeping it in-house or with staff who work for you rather than contractors, etc. and only time will tell how true those predictions are.