Question

CNK International is a mining business whose mission is to maximise profits for shareholders whilst recognizing its responsibilities to society.

It is considering a mining opportunity abroad in a remote country area where there is widespread poverty.

The mining work will destroy local vegetation and may pollute the immediate water supply for some years to come.

The company directors believe that permission for the mining work is likely to be granted by the government as there are few people or animals living in the area and the company will be providing much-needed jobs.

1 Identify the likely stakeholders in the company's decision

2 Explain the possible objectives of these stakeholders.

3 Describe three likely conflicts in those objectives.

Answer 1

1)

Let us first define what stakeholders are.

Stakeholder is a person who has interest in a comany and its business.

Stakeholders in the given case study are shareholders, owners, employees, mining workers, residents of the area where mining will take place(Community), Government and Enviormentalists .

2)

Objectives

Shareholders- Increase in their wealth by increase in share price

Directors- To increase the profits of the company and maximize shareholders wealth

Employees- To acheive their personal goals i.e which may include monetary benefits( like salary) and non monetary benefits (like promotions)

Mining workers- To earn wages and safety and security while mining

Community- To be provided with employment and improvement in standard of living.

Goverment- To provide employment to the citizens and earn revenue by way of taxes and license costs.

Environmentalist - To protect the environment and prevent depletion of resources

3)

Conflicts

1) Owners v/s Employess/workers : Owners are oriented towards achieving higher profits and therefore may not be willing to pay higher wages to the workers in order to reduce costs which may in turn may demotivate the workers and can adversely affect the quality of work.

2) Environmentalists v/s Owners : Owners tend to ignore environmental imapcts and may take decisions which are good for the business but harmful for the environment. This will not sit well will the environmentalists and thus may oppose such actions in order to protect environment.

3)Governments v/s Environmentalists : Government may grant mining license to create employment and earn revenue at the cost of environment delpetion while protection of environment is the key objective of environmentalists leadiing to conflict of interest.