Question

XYZ Corporation owns a landfill that was acquired in the purchase of a small waste management company 30 years ago. During routine testing of the soil surrounding the landfill a technician of the company discovered that the soil on the west side of the landfill showed evidence of heavy metals which may be carcinogenic (cause cancer) to humans and animals. If the source of the contamination is not located and contained, the chemicals might enter the public water supply by draining into the local reservoir. The cost of cleaning up the chemical contamination could be very large. The Vice President of the company in charge of the landfill has been given the test results. When he informed the CEO of the situation he was told to ignore the results and continue operating the landfill. The Vice President is trying to determine his course of action. Pick one of the Theories of Ethics and answer the following questions:

Who are the potential stakeholders who may or may not be affected by the above situation?

What actions if any should the Vice president take or not take?

Explain your answers.

Would your answers change if you applied one of the other theories of ethics?

Answer 1

*Answer:

Environmetal factors like pollution, deforestaion, impact on climate and weather green house effects etc.,must be considered by the companies while selecting the project for implementation. Any project which adversely effects the enviroment is not taken positively by environmetalists and common public.

Potential stakeholders in a company are suppliers, creditors, employees, Government, Directors. Unions and community.

*Actions should taken by the Vice president:

Staff motivation:

Staff motivation and satisfaction is another important factor which companies might consider while choosing projects. The company should adopt a participative approach while approach while taking such decisions considering the impact it would have on the labours.

Government Regulations:

Companies must comply with relevant goverment regulations while implementing projects. However, if the profits and cashflows are generated by violating government regulations, it could be harmful in the longer run for the company and its brand. The company must ensure the all relevant laws and regualtions.

*Availability of resources:

*The evalution of any project must also consider aavailability of resources like raw material, labour, logistics, electricity etc. If there is any constraint on any of the resources at a future date, a finacially viable and excellent project will turned into a failed project.

*Availability of project site:

Site selection involves measuring the needs of a new project against the merits of potential locations. This indicates the practice of new facility locaion, keeping in mind project requirements.

*Corporate social responsibility:

*Corporate social responsibility:

Corporate social responsibilty refers to "ethical principle that an orgamisation should be resposible for how its behaviour might effect society and environment. They have a responsibilty towards the society and environment. The aspects of CSR must also be consider while deciding the project to be implemended.

Ethics

Ethics are a set off guiding moral principles for individuals and corporates. Every company has a duty of care to various stakeholders

*Conclusion:

The ultimate objective of a company is to maximize wealth maximaisation. The company must however be operate in a socially responsible manner in achieving the objective of wealth maximisation. The company has a duty of care about other stakeholders like employees, society at large etc. In some cases there may be conflict between different stakeholders objectives. For instance, a new waste treatment would be good for environment and society at large but would be adverse for shareholders as a additional cost would incurred. The company must definitely consider non-financial factors along with the financial factors while deciding on whether plant would continue or not.

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