Question

Topic: Corporate Social Responsibility

Involved Parties:

Bob, President
John, Chemical Engineer
Henry, Controller
Kirk, Assistant Controller

Kirk is a bright individual who is being groomed for the Controller’s position in a medium-sized manufacturing firm. After his first year as Assistant Controller, the officers of the firm were starting to include him in major company functions. For instance, today he was attending the monthly financial statement summary given at a prestigious consulting firm. During the meeting, Kirk was intrigued at how all the financial data he had been accumulating was transformed by the consultant into revealing charts and graphs.

Kirk was generally optimistic about the session and the company’s future until the consultant started talking about the new manufacturing plant the company was adding to the current location and the costs per unit of the chemically plated products it produced. At that time, Bob (the President) and John (the chemical engineer) started talking about waste treatment and disposal problems. John mentioned that the current waste facilities were not adequate to handle the waste products that would be created by the “ultramodern” new plant in a manner that would meet the industry's fairly high standards, although they could still comply with federal standards. Kirk’s boss, Henry, noted that the estimated cost per unit would be increased if the waste treatment facilities were upgraded according to recent industry standards.

While industry standards are presently more stringent than federal regulations, environmentalists are strongly pressuring for more stringent regulations at the federal level. Bob mentioned that since their closest competitor did not have the waste treatment facilities that already existed at their firm, he was not in favor of further expenditure in this area. Most managers at this meeting resoundingly agreed with Bob, and business continued on to another topic.

Kirk did not hear a word during the rest of the meeting. He kept wondering how the company could possibly have such a casual attitude toward the environment. Yet he did not know if, how, or when he could share his opinion. Soon he started reflecting on whether this was the right firm for him. What should Kirk do? Putting Corporate Responsibility first, but recognizing the politics at play, what is the most ethical thing to do? The most practical? What strategy would you suggest to Kirk if he came to you for advice?

Use the Instructions for Case Analyses to craft a response to this case, articulating the main issues and ethical dilemma. Review the assessment criteria below before you begin writing.

Submit a written paper which is 2-3-pages in length exclusive of reference page and that is double-spaced. You should cite relevant resources in APA format.

Papers will be assessed using the following criteria:

The Written assignment:

identifies all the relevant facts of the case
articulates all of the ethical issues including the extent of Kirk's responsibility to take action; how the interests of the firm (and stockholders) can be balanced against the environmental interests; what obligation the company has to future generations and citizens.
identifies all stakeholders
poses all possible alternatives and describes the ethical considerations attached to each
identifies all practical constraints
recommends a specific action Kirk should take (may include leaving the company)
is of high quality, writing is clear and professional
conforms to the structural requirements including APA style guidelines for References.

Answer 1

Corporate Social Responsibility - Ehtical Dilemma

As per the given case details, the comany is planning to expand by setting up a new ultra-modern manufacturing plant at the current location. For any new project to have long term viablility, revenue generation should be bigger than the costs involved including fixed costs and operational expenses. From this standpoint, it becomes necessary for Management to keep a close look at the costs involved and it shoukd be kept minimum to ensure viability is reached in lowest possible time.

But, along with cost minimization, it is the duty of Senior Management to see that Company follows Federal guidelines and Industry standards when it comes to their duty towards Environment. In this particular case, federal regulations are not stringnent and that's why Top management wants to get away with minimum cost on wast disposal. But, industry is following stringent norms though company's close competitor is not following those norms.

Additional investment will be required in setting up new waste management set up which is not favoured by the firm currently. But, they also need to think about few more parameters:-

a) What if tighter regulations are adopted as Federal guildelines sooner than the company is expecting?

b) What is the Industry body gives bad ratings to companies not following norms, which can further lead to issues like bad credit ratings, issues with top suppliers eho expect better waste management, etc

c) What will happen to the Health and safety of workers deployed in the plant and general population living nearby

These are big questions, which do not add to the cost instantaneously, but carry huge risks. Since Kirk is only 1 year old into the company, it makes sense for him to raise his concersn to his immediate seniors. He should first have a one-to-one conversation with Henry to describe what he feels about his ethical dilemma. Along with keeping his viewpoint, he should debate how it will be beneficial for the company in long-run to have a secure waste management. If Henry is convinced, it will make for a stringer case during next meeting.

After this discussion, he should ask for a meeting with John and Bob to discuss further about his reservations. This can be done during next joint meeting too. During th meeting, it might be stressed upon that, company should think about its stakeholer's return first. Kirk can point out that, in the process of ensuring good returns, it is an equal responsibility of comapny to ensure its processes do not harm nature and general population. If points are put up properly, Kirk can convince management to install better waste management facility.