You are CEO of SUNSUP Corporation, a major innovator and manufacturer of solar panels. As part...

You are CEO of SUNSUP Corporation, a major innovator and manufacturer of solar panels. As part of SUNSUPS’s commitment to social responsibility, you initiated and led, between 2013 and 2018, the financing of startup solar panel companies in 3rd world countries (with loans forgiven if the startup did not succeed).

By the end of 2018, about 2/3s of the startups have failed, but the other 1/3 appear to be commercially viable. Your Chief Financial Officer has advised you that, whatever its successes, this goodwill program has cut your company’s profit margin by about 15%. What are your ethical responsibilities under these circumstances?

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Expert Solution

The ethical responsibilities goes not only to preserve the profit margin of the company to become a responsible company towards its investors, owners and employees, but also to be committed to its plan of financing these startups unless we come up with the new plans. So, there is a trade off between preserving profit margin and supporting startups. Hence, in the given scenario, I would come up with following initiatives to execute my ethical responsibilities.

1. To come up with new plan that will ask all the startups to show their work strategy in the next 1 - 2 years and the past performance records with financials. It will make commercially viable company as well as a failed company to be given an opportunity to claim for the support. Besides, it will bring disclosure and information that can make our support to them as ethical. Here, the company that is becoming commercially viable, will be encouraged to show good performance and become strategic partners. It is ethical approach as per deontological approach where the intention of the action is morally high in nature.

2. The company will make the support initiative to be a strategic one and will allocate funds for it, so that it does not affect the profit margin in the future. It will continue to increase and the level of support to the startups. It will strengthen the commitment towards investors as well as towards the startups.

Above initiatives will help implement ethical responsibilities in an organized way to take care of the different stakeholders.

Rahul Sunny answered 3 months ago

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