Corporate Social Responsibility

Abstract

Kirk’s firm wants to build another manufacturing plant that would not have state of the art waste management facility and that means, it is will be harmful to the environment, although it will comply with federal regulations. Kirk is not happy with that and we will see what Kirk can do given the situation where he has some responsibilities towards his employer and his employer has other priorities, we will discuss those points in the paper.

Keywords: ethics

Relevant Facts –        Following are the facts we get from the information available to us –

Kirk is an assistant controller for one year and he is being groomed for a midsized manufacturing firm. Kirk accumulated financial data which is used by the firm to make decisions.

Chemical engineer John mentioned that the current waste facilities were not adequate to handle the waste products to meet current industry standards. Although it would meet federal standards.

Kirk’s boss Henry mentioned the cost per unit will go up if the waste treatment facilities were upgraded to meet the current industry standard. The president, Bob mentioned, that the closest competitor does not have the waste management facilities that they have, so he was not ready to upgrade from their current waste treatment facilities.

Current industry standards for waste treatment are stringent than federal requirements, but environmentalists are pushing for stronger laws at the federal level. So, Kirk’s firm is not breaking any federal law right now, but in future in federal requirements change, then the firm might need to upgrade their system.

Kirk did not pay attention to rest of the meeting and kept thinking about what he heard, seemed like Kirk is very serious about the environment.

Ethical Issues –

            Kirk seemed like a person who cares about the environment and wants to work for a firm that has the same values and ethics as he does. The ethical issue, in this case, is mainly, president of the Firm declared that they are not going to install the best possible waste treatment facilities, just because their competitor does not have any better waste treatment facilities, and the other reason is, they will meet federal requirements with whatever they have at the moment. But, Bob was not ready to spend more money to do whatever best was possible to protect the environment. And Kirk has an issue with the mindset or approach his firm was going to take.

Stakeholders –

One vital point is the environment in danger because manufacturing firms do not want to install better waste treatment plants. The direct stakeholders are of course Kirks employer, the manufacturing firm, their competitors, federal government – since they can make the stricter regulations to force these corporations to upgrade the waste treatment plants, the environmentalists, because there is the group who are trying to push federal government to bring in stricter regulations and since these waste treatment plants are environmental threats, so anyone who is living nearby are stakeholders, along with the customers and shareholder and leadership of this corporation ( kirk’s employer and their competitions).

Possible Alternatives –

            Kirk has few options here-

Kirk can find out exactly how much it would cost to build a state of art waste management facility that could be industry standard, better than any competitor and federal requirements. He can present that information to Henry, his manager and try to explain how it will improve the brand. And with all the real numbers, the corporation can actually understand how much it will impact the input cost.

Kirk can find out, when Federal requirements go up, what environmentalists are pushing for, what it would cost the corporation to upgrade, most probably the downtime and scrap the current waste management facility would cost them more. He should highlight that.

Kirk always has the option to walk away from the situation doing nothing, but that will solve any problem, so it is not ethical.

Kirk can decide the environmentalist group after quitting the job and tries to stop the firm from building the plant or pushes the federal government to bring in tighter regulations. But there is no evidence that if one more person joins the environmentalist group it will succeed.

Ethics of the Alternatives –

If Kirk joins the environmentalists after quitting his job and pushes Feds for new regulations of waste management that may or may not work. But, that would be an ethical option for Kirk. But, that might not be a practical option for Kirk, because currently, he has a good career which he can continue and explore other ways to stop his firm from destroying the environment.

            If Kirk just ignores or quits his job that will not change anything until federal regulations make the manufacturing companies have better waste management facilities. So, this is not an ethical option for Kirk.

            Kirk should take the “utilitarian” perspective and show the cost and benefits. Kirk needs to find out the cost if the federal regulations change as expected, how it will impact the firm, he can present to the management, how installing best waste management facility will help them. They will be able to set an example, avoid future downtime and expenses.

Every stakeholder, in this case, has a right to pollution free environment, and the firm should absolutely take every possible measure and try not to harm the environment. Moreover, if the firm violets the future regulations it might be fined by the government, but having a better than expected waste management facility will ensure that they do not violet any environmental laws. For example, in the last 3 years, the Chinese government has punished 33 multinational companies for not complying with environmental regulations (Worldwatch Institute, n.d.).

Practical Constraints

            Kirk might care for the environment but Bob cares for more profit and the rest of the people in meeting agrees with him. So, it is not going to be easy. First of all, they are already complying with federal regulations, and Bob and the management would know with a change in the president, environmental deregulations might take place to boost business, regardless of what environmentalists want. One example would be, the current administration has loosened regulations to make it easier for sectors to do business, and the idea behind this is to boost jobs. According to the New York Times, the US administrations have sought to reverse more than 0 environmental laws (Popovich, 2018).

And the next constraint is the additional fund required to build the waste management facility, Kirk does not know if the firm has the capital or if they will have to borrow and how much.

3rd point would, if they install the waste facility, then the input cost will be increased for the product and that will make the firm less competitive, Kirk will need to figure out if there is any way to keep their product still competitively priced.

Specific Action –

Kirk should try to get the necessary numbers to find out how much an ideal waste management facility would cost and in case the firm goes with the current waste management facility and federal regulation comes in later, how much that would cost the firm. Once he does the calculation, he needs to figure out how to offset the increased input cost and how to keep their product competitive. One way to keep product competitive would sell their product in special or premium product segment and stores such as Whole foods. Kirk’s employer is a for-profit corporation and it has responsibilities and accountabilities towards its shareholders, employees and customers to mention the least, so not going ahead with the project or making a loss on the project/product is not practical and desirable. Kirk needs a plan that will make the project viable and keep the product profitable, so this would be my suggestions to Kirk.

References

Popovich, N , Albeck, L. Pierre, K(July,2018). 76 Environmental Rules on the Way Out Under Trump. Retrieved from https://www.nytimes.com/interactive/2017/10/05/climate/trump-environment-rules-reversed.html

WORLDWATCH Institute (n,d). Multinational Corporations Violating China’s Environmental Laws and Regulations. Retrieved from http://worldwatch.org/node/4764

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