George is a hard-working individual that has two children and a wife for which he is responsible for. He provides financially through the means of employment with Ardnak Plastics Inc., where he is a manger of a plant located in Hondo, Tx. At his plant, George has had issues with the smokestacks producing too much emissions and received fines from the EPA because of this. When discussing this issue with his boss, Bill, he told him that he had tried to get headquarters to replace these smokestacks but was unlucky in his efforts. This was responded to, by Bill, that the company did not have the margin needed to replace the instruments and that there were plants that needed more help than his but always passed the EPA inspections. They did this by producing bigger emissions at night, so that during the day, when the inspections occurred, there would not be as much as emissions. After another month of incurring fines, George was presented with a dilemma by Bill. This was that George could move his plant into Mexico, where the EPA does not exist. But, he would have to employ only Mexican nationals, thus leaving all the current employees without a job. In this assignment, we will be discussing what George should do, along with the stakeholders involved, laws that apply to this situation, the ethics that should be considered, and a recommendation for him.
There are countless amounts of stakeholders involved in this situation, ranging from the owner of the company, to George and Bill, to all the employees that rely on their employment to feed themselves. An external stakeholder to consider in this case is the community of Hondo, Tx. (Chen, 2018) This is because a good majority of these individuals reside in this town and if they were to lose their jobs, they would have to relocate to find gainful employment again. While this would be a huge ramification for the community, the biggest impacted stakeholder would be George himself.
The main interest of most of these stakeholders is solely based on financial reasons. This is true for George as well, but his morals play a bigger role than the other stakeholders. Because his decision will impact so many people, he must take that into account. If he was to decide to move his plant to Mexico, this would hurt the community, but if he stayed and was unable to fix the problem, he would lose his interest of employment.
In this case, George’s plant has been fined by the EPA for producing too many emissions. The power to levy fines for this violation, by the EPA, was granted through the passage of the Clean Air Act in 1970. (Halbert & Ingulli, 2015) Under this act, the EPA was given the power to regulate the emission of pollutants to a limited number. This was further backed up by the decision in Massachusetts v. Environmental Protection Agency (2007) when the Supreme Court decided that the EPA could regulate Greenhouse Gases. (Halbert & Ingulli, 2015) The legality of this corporation acting in this manner, obviously leads to fines, but could also lead to lawsuits if this information became public. If it could be proven that this high production of emissions leads to sickness or disease, then this corporation could be paying out a lot more than it would have cost to fix the problem initially.
From the perspective of the public, the ethics Ardnak is practicing could be viewed as lackluster to say the least. Any individual or corporation that chooses to allow the problems to persist instead of investing in new equipment to solve it, are usually viewed as profit hungry and that they do not care about the environment. This kind of public opinion of a company can deter people from using their product or lead to individuals not investing in the business. But not only does this equate to a negative opinion of the business, it also makes people believe that governmental regulations are essentially a “pay to play” system.
Often in this type of system, regulations and rules overlooked in favor of overall profitability, even if there are fines incurred because of this behavior, as long as the margin of profit is not extremely affected. Using these ethics to base business decisions off can create a negative perspective, not only from the public, but also from the employees of the respective business. Ultimately, employees that know their company is not following ethical guidelines act in the same manner, which leads to issues and troubles for the company. And for the employees following the ethics, it can make them feel that they are less valuable, thus making them less productive. (Zeiger, 2019)
Ethical responsibility should always be used no matter where the location of the business is. Just because a company relocates to a less restrictive jurisdiction, does not mean that their ethic should change as well. Instead, the corporation should use this as an opportunity to show other businesses that ethics matter and try to invoke some changes in that area. Also, by portraying that your business cares about other things than profit, it can help create a positive image of the company, which in return can lead to more sales and profit. Being interactive and proactive as a company also helps the image of the business as it shows that they act responsible and are prepared for any issues that may arise. (The Sustainable Business Case Book, 2012)
The next question to be addressed is the central dilemma that George is facing, that being does his responsibility to his family outweigh his commitment to his employer? When facing such a circumstance, many people have rationalized that they must work to support their families, ultimately choosing their commitment to their employer. (Morgan, 2014) But in this situation, George is not only choosing his family or his employer, he is choosing to uphold his morals or let them lie. If he was to make the decision that he is moving the plant to Mexico, it would exemplify to his family that he is not the person they that thought he was and could even lead to his children thinking that morals are not important. But on the other hand, if he was to choose that his commitment to his family is more important, it could end up with him not having employment to support them. Before he makes this decision, he should consider two factors, the availability of another job and how much money is saved. If the answers to these factors are positive, then he should choose his family. But if no money is saved and there are no other jobs available, he should stay employed and try to fix the problem before just relocating to Mexico.
The best decision-making theory that George could use is Utilitarianism. Under the guidelines set by this theory, decisions should made with the interest of the greatest amount of people playing the biggest role (Halbert & Ingulli, 2015) Using this theory ensures that most individuals receive the best news possible. In this situation, that would be that all the employees are able to keep their jobs and continue to support their families.
My recommendation for George would be just that, to choose his family and community over relocation to Mexico. Not only would this decision be for the greater good of the residents of the town, it would also show that he has morals and that he will fight for those morals. Another thing I would recommend to George would be to find a solution to the problem, so that he does not have to find other employment. This could be done in many manners, including fundraisers or by simply telling the employees what is going and how it will affect them, while trying to gather the funds to fix the issue. For example, if the new equipment needed was 5,000 dollars, they could raise the money collectively by every employee donating a few bucks. While I understand that this is not normal operations for any company, it would ensure that they could keep their jobs and that the plant remained in their community.
Chen, J. (2018) Stakeholder. Retrieved from https://www.investopedia.com/terms/s/stakeholder.asp
Halbert, T., Ingulli, E. (2015) Law and Ethics in the Business Environment. Retrieved from https://purdueuniversityglobal.vitalsource.com/#/books/9781305483125/cfi/6/2!/4/2@0:0
Morgan, J. (2014) What Comes First, Work or Family? Retrieved from https://www.forbes.com/sites/jacobmorgan/2014/07/10/what-comes-first-work-or-family/#4b10bd0f49b4
The Sustainable Business Case Book (2012) Retrieved from https://saylordotorg.github.io/text_the-sustainable-business-case-book/index.html
Zeiger, S. (2019) Effects of a Lack of Ethics on a Business Environment. Retrieved from https://smallbusiness.chron.com/effects-lack-ethics-business-environment-23332.html
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