The case involves a manager’s ethical dilemma regarding maximizing production, working within employee-set parameters, and adhering to government policies. George Mackee was employed by a manufacturer of plastic parts for oil refineries to manage its plant at Hondo. The problem stemmed from the smokestacks emitted by the company.
The emissions exceeded EPA guidelines and so the company was threatened with penalties should it fail to remedy the situation. However George’s superior would not approve the needed remedy until profit improvement was observed.Upon investigation, it was found out that other plants of the same company did not violate the EPA guidelines because these companies released their sub-standard emissions during the night time when walk-in EPA inspections could not be conducted. Meanwhile, George’s boss told George that emission regulations were less strict in Mexico, as EPA had no jurisdiction there, and he should considering ordering the plant to be transferred there.
However, relocating the plant would mean releasing the same level of emissions in Mexico and worse, the releasing from work of the many employees of the company.Thus, it is seen that George is faced with several ethical issues. First of all he had to decide whether or not he should evade the government policies aimed at regulating powerplant smokestack emissions. He also had to decide whether he should simply take advantage of another locality’s less stringent rules and relocate to the same.
Of course, even though the standards set for that country were less strict, the company was already aware that its smokestack emissions were no longer acceptable.It is not to be forgotten that he bore on his shoulders the key to development and growth of Hondo as the powerplant affected either its environment, thus affecting adversely the citizens of the community, or the relocation of the powerplant would devastate the source of income of many of the community’s citizens, many being employed in the same company. Finally, George had to come to terms with the moral dilemma that his decision affected his family as well. His decision could bring social stigma upon himself, his wife and two children.
He could also not discount themselves as residents of the locality where the emissions were being released and knew that if there were adverse effects of the same on the health, they too would suffer. However, his two children were growing and would soon leave for college, a fact that he needed to prepare for financially. He thus had to weigh seriously whether or not he should simply remove himself from the picture and leave the decision-making for others to do.To summarize, the main issues that arise from the situation are whether or not the company should evade EPA regulations by operating night-time in order to conceal from inspections the prohibited levels of smokestack emissions.
Also, whether or not the company should relocate to Mexico where the regulations regarding smokestack emissions are less stringent and the intended emissions of the company are within acceptable ranges. The person directly making the decisions regarding the above-mentioned ethical issues was George. However, it is apparent that his superiors also had a role to play in the decision making process.Although George was the one responsible of fleshing out a viable option to resort to in order for the plant to be able to continue operations, Bill, his boss, was in a position to approve or disprove of George’s decision.
Bill had the authority, as deemed by the company, to place limitations on the permissible decisions George could make. Thus, these two people, cloaked with the disguise of juridical identity made decisions regarding the remedy for the problem of smokestack emissions by the company. Such disguise however could not hide their identity from those to be affected by their decision.The clearest stakeholders in this case are the company and the community of Hondo.
The company’s profits would be affected either by evading the EPA regulations or following them. The community would also clearly be affected as the company was of vital importance to their infrastructure. However, the continued release of harmful levels of smokestack emissions would also affect the community’s ecology and might stretch out to its other industries. The EPA is also a stakeholder herein as it is the EPA regulation which is being contemplated herein.
The decision also affects the Mexican city to be transferred to and the employees of the company.Mexico would be affected as the relocation of the plant there would provide for more job opportunities to its citizens, thus improving the infrastructure therein. On the other hand, although not prohibited by law, the harmful level of smokestack emissions would be released in Mexico. The relocation would also affect all the present employees of the company as they would be put out of work.
Finally, the decision affected George’s family. Should he resign from his job, the future of his two children and the sustenance of his family’s needs would be compromised.Should he choose to relocate the plant, the acquaintances of his family also employed in the company, or those with close relations employed in the same, would blame them for the loss of source of income. Such scenario would be particularly true for his two children in school, scenario that could be scarring or devastating to the growing up years of the children.
Ethical Issues Whether to evade the EPA regulations by operating prohibited emissions at night The concern is validated as the operation during the night would permit the same level of profit for the company. However the operation would be a direct evasion of public policy.The resort to the same would thus be a crime as established by the EPA regulations and penalties. Also, the EPA inspection had already deemed as unfit the level of smokestack emissions thus precluding that the same was harmful for the community even if beneficial to the company.
Applying Kant’s Categorical Imperative, the issue would be resolved in favor of adhering to the EPA standards. In Kant’s view, persons are to be viewed as ends in themselves and not merely means to an end. The end goal of the company through its operation at prohibited levels of smokestack emissions is to make the most profit.However, in the accomplishment of this end, the community’s suffering is deemed a means of achieving it.
Such should not be the case. The company then should give credence to the rights of the citizens in the community, even to its employees. For although benefit may be argued to trickle down to these same citizens it cannot be denied that in the main the rights of such citizens are abused in the name of a greater end for the company. Mills, on the other hand, contemplating the greater good in terms of the most persons benefited, would deem the night emissions as a morally correct decision.
While it is true that the EPA is cloaked with the authority of the government and thus stands in representation of the concern and welfare of all citizens, the same citizens are not affected by the emissions. Thus, the representation of EPA can be limited to the citizenry in the locality of Hondo. However, the same constituent interest can be claimed by the company in its interest to achieve maximum profit as the continued operation of the company improved the infrastructure of the community.Thus, upon closer perusal it is seen that the EPA standards affected the population of the community while optimal operation of the company affected the population of the community as well as the employees and stakeholders of the company, both those located in Hondo itself and those located elsewhere.
In the view of a rights-based ethical perspective, the regulations are presumed to have been put in place in order to protect the rights of citizens as regards the area of concern. Thus continued operation by the company, whether by day or night, would be a violation of rights.It is of no consequence that many are employed in the company and might be said to have waived such rights. The fact is that there were still citizens not employed in the company.
Even if such citizens were benefited through the economic growth of the community, the trampling of some of their rights is not to be taken for granted nor presumed waived. Therefore, EPA standards should be correctly upheld. The justice-based perspective, operating on social and economic unity for the whole as stemming from each person and each worker, would resolve this issue in favor of the night-time emission operations.Such a decision would ensure optimum economic productivity for the company and for the community.
The social unity in the community would also be maintained by opting to operate at night and choosing not to disclose to the EPA such operations. Many of the people in the community were involved or related to the company as its industry was a major source of job opportunities for the residents. Thus the penalties and fines to be imposed on the company would no longer broaden in range to affect the workers.It is to be noted that the company’s growth was also in the interest of the residents as the same directy affected the development of the community.
Looking at the issue through Kohlberg’s Levels of Moral Development would require the consideration of the differing rationalizations for the moral standards of individuals at the different levels. At the preconventional level the individual has no sense of right or wrong and views morality as something that is dictated upon them by authorities. It would thus follow that according to such perspective, the correct thing for George to do woud be to follow the EPA standards.In an almost similar manner, ethical reasoning in accordance with conventional morality, Kohlberg’s second level, would choose the adherence to EPA standards as the morally upright decision.
At this level, the individualistic sense of morality broadens into a shared morality taking into consideration the community as a whole. Given the rules and regulations set by government authorities, there is a presumption that such regulation is moral. Finally, post-conventional morality would require that George observe the EPA standards. At this level, there is a concept of contract between the individual and society.
Thus, the illegal running of a business is considered a violation of a contract with the state, therefore immoral. Whether to take advantage of lower regulations in a neighboring country. The ethical issue of concern herein is the relocation of the plant to Mexico since EPA regulations were not applicable there and local regulations permitted the present level of emissions the company was currently releasing. However, such relocation would only transfer the harmful emissions to a different locality.
Also, transferring the plant would cause numerous residents of Hondo employed in the plant to lose their jobs.On the other hand, transferring the plant to Mexico would eliminate the problem of meeting EPA regulations while operating in compliance with the laws of the new country. Kant would determine the correct decision to be remaining in Hondo. The more lenient regulations of Mexican cities regarding smokestack emissions may be reflective of the protection afforded the rights of its citizens.
Thus it could be argued that residents are not utilized as mere means to an end due to the voluntary nature of their permission to have the company operate in their vicinity.However, it is to be kept in mind that the labor in Mexico may be utilized for a lesser cost. In this manner the employees are given unfair disadvantages and are not provided the compensation actually due them. From the perspective of Mills, the relocation to Mexico would be more beneficial for although many employees would be laid off more employees could be hired in Mexico.
Furthermore, the relocation would benefit the company as a whole and the EPA as well. While retaining the plant and the employees in Hondo would still cause problems for the company and for the EPA.From a rights-based justice, the better decision would be to keep the plant in Hondo. A relocation would not give justice to the rights of the future Mexican employees as the wages due them would not be commensurate to that which the company would ordinarily give to a labourer in a different locality, say Hondo.
Furthermore, the right of the Hondo employees to keep their jobs would suffer if a relocation were effected. A justice-based perspective would look at the economic impacts such a relocation would have on the economy and society of both Hondo and Mexico. The relocation would cause Hondo’s local economy to suffer.While the transfer to Mexico would seem to cause the local economy to rise it would still cause local industries to suffer as more workers would opt to join the bigger American corporation.
Therefore, in accordance with justice-based ethics, the moral choice would be to remain in Hondo. Finally, Kohlberg would, in the pre-conventional level, state that the relocation would be a more correct decision as that would benefit the individual, eliminating the worries of having to contain the emissions at acceptable standards, and would be in accordance with rules spoken to the individual by the EPA.A conventional morality would hold the same decision since the authorities in Hondo prohibited the current level of smokestack emissions and the authorities in Mexico did not. However, post-conventional morality would point out that the company had existing social contracts with the employees of the company.
These contracts should be respected and upheld by the company and so relocation would be a step in the wrong direction. Corporate Social ResponsibilityAs regards the corporation’s responsibility given the ethical issue on evasion of EPA standards, given a legal perspective, the company should lower its smokestack emission levels and refrain from simply moving their operations to night-time. The law, in the guise of EPA regulations, is clear. The current acts of the company are punishable as they are deemed inappropriate.
Therefore, as a part of the society which the laws govern, the company should abide. From the economic perspective, it is the same thing. The economy of the society might benefit for the meantime due to the profit and inflow of money from the company’s business.However, the outside factors to be considered as results of the manner in which the company operates are as much a part of economic indicators as cash flow.
The pollution in the area is a deterrent to the country’s economy and so it should be stopped. As regards the ethical responsibility of the company to the community, it would be morally upright for EPA standards to prevail. Finally, with regard to philanthropic responsibilities to society, the company should meet EPA standards for the benefit of the ecology as well as the residents of Hondo. Concerning the issue regarding relocation, the company would be free of legal responsibility.
However, having had previous notice from different authorities, the company knew that, although acceptable by law, the level of emissions it intended to continue producing was at a harmful level. Therefore, the economic ramifications that were discussed in the previous issue would still be present, only now it would be applicable to a different location. To add, the unemployment that would result in Hondo would increase the economic liability of the company. As a part of society, it should ensure that its production and presence benefits the community by uplifting infrastructure and environmental potentials.
While on the ethical aspect, the company’s social responsibility would be best served if it would remain in Hondo. It is true that the company faces EPA sanctions for its operations. However, relocating would not serve to improve the situation. The same ecological damage inflicted upon Hondo would be brought into Mexico while leaving Hondo with the problem of cleaning up pollution, stabilizing its infrastructure and providing work opportunities for numerous residents finding themselves suddenly out of work.
Thus, from the perspective on the relocation’s impact on society, the ethical thing for the company to do would be to remain.Finally, as regards the matter of philanthropic responsibilities, the company should certainly remain in Hondo as the employees serving it would find themselves jobless in a community whose key source of cash flow has left. Certainly it would be more humane of the company to remain. It should be noted that for the first issue there is a clear-cut legal basis for a correct decision.
The matter of operating night-time operations where smokestack emissions would approach prohibited levels is covered by EPA standards.The very reason why such standards are set is because of the perceived abuse to the environment and to the community if company’s were to practice methods which resulted in higher levels of emissions. Such limitation is within the jurisdiction of the law as it is the concern of the people whether or not their patrimony is being protected and whether or not they’re health is being ensured. However, the issue regarding relocation is not contemplated by law.
The freedom of the individuals composing the juridical entity which was the company to open and close businesses or plants for that matter, was certainly beyond the contemplation of the law.To prohibit a company to relocate its operations to another locality, particularly another country, would be to impede upon right to liberty. Certainly, it should be out of the control of the government where plants are to be set up and for what purpose. Such decisions are protected by law itself as provided by a person’s right to be let alone, the right to liberty.
Stakeholder Management: The Employee With regard to the issue of evading EPA regulations, the employee as stakeholder has several functions.The employee would thus hold interest for the situation since the operations would mean more productivity required of night-time workers as well as higher level of confidentiality required of the latter. With illegal operations being conducted during the night, it would thus be the responsibility of the employee to ensure that EPA inspectors would not find out about the operations. They would also be responsible for the information divulged by their relations.
In this regard ethical issues on whether or not to report the activity would be entertained by employees.As regards the issue on relocating the plant, the employee’s interest is increased as his or her position and occupation is put at risk. Should the company opt to relocate, the employee would find himself jobless. However, if the company should choose to remain and lower its smokestack emissions, it is probable that the employee would still suffer as the lowering of smokestack emissions would mean increased expenses for the company which might result in the laying off of several employees or the cutting back on benefits enjoyed by the same.
Therefore, the employee is responsible for working in sterling condition in order to merit recognition and sympathy from his superiors. The employee could further petition the company to remain in Hondo. In either scenario, the stakeholder should place himself in such a position so that he becomes indispensable to the company, even if that should mean being indispensable at the lowest levels of production. Stakeholder Management: The EnvironmentIn both issues brought out by the situation, the environment is concerned since the emissions polluted the atmosphere affecting not just the air but even the cleanness of the plant life, the health of the animals, and the health of the residents as well.
The continued emission at the levels that were being made by the company showed to be dangerous and unhealthy to the living organisms taking in the air in the area. Thus, the interest of the environment as a stakeholder is seen to be far-reaching and broad, covering the entire community and possibly even affecting the future of the community.Should the company choose to operate at night but still emit the same level of smoke, the environment would suffer. Should the company choose to relocate to Mexico, the emissions would stop.
However the effect of past emissions would still be sustained as the damages it rendered in the vicinity of the plant would not have been corrected. Stakeholder Management: The Community The community cannot be denied as a stakeholder in the controversy it being the primary recipient of both the positive and negative effects of the company’s operations.As regards the issue of evading EPA regulations in order to persist in its level of smokestack emissions, the community is concerned since it is both interested in the profits garnered by the company and the work opportunities the same opens up to its residents as well as in the upholding of the laws and regulations imposed by it unto its citizens. The community is thus responsible for implementing the laws that have been passed in order to ensure the protection of its citizens and its nation.
However, such responsibility should be considered in light of the community’s responsibility to provide means of livelihood for citizens and to ensure the growth of its infrastructure. Therefore, evasion of penalties by the company would cause degradation in the dignity and honor of the community’s laws and law enforcers causing a decline in societal order. The respect due to the law of the land would be demeaned and the process of penalization circumvented. However, should the company decide to relocate to Mexico the community would suffer in the form of the loss of jobs of its residents.
Relocation to Mexico would entail the withdrawing of the biggest investor in the community and thus lead to a decline in its economic backbone and even the devastation of its infrastructure. Stakeholder Management: The Shareholder The shareholder’s interest is limited to the productivity of the company. The shareholder is interested in avoiding the need to pay penalties and to settle fees detracting from the financial store of its operations. The shareholder is also interested in optimizing productivity in order to optimize profits.
This entails opting to reject from the budget materials and machinery not engaged in directly boosting output. The responsibility of a shareholder is to invest in the corporation and to fund the operation of its plants. The shareholder should also ensure that the company’s operations are kept within the parameters of the legal system. Should the company choose to operate illegally during the night-time to evade EPA regulations, shareholders will be benefited as their income from their investment will not suffer.
However, they also bear the risk of liability for the illegal operations.As shareholders, each person is liable jointly with all the others for acts committed by their employees and subordinates in relation to their line of work and according to the instructions of the company supervisors and managers. Should the company choose to relocate to Mexico however the shareholder would benefit tremendously as the expenses incurred in constructing a plant in Hondo would be relieved by the cheaper labor to be used in Mexico. Furthermore, the company could continue to operate at the same level of productivity without fear of violating the law.
Stakeholder Management: The Customer Finally, the customer’s interest is to avail of up-to-standard products. The customer is interested in availing of low-cost high-quality products made easily available in the market. It should not be neglected however that the customer should also make sure that the products availed of are not fruits of illegal operations. It is the customer’s sole responsibility to discourage illegal and disgraceful operations by choosing not to patronize the products of corporations operating in the said manner.
To continue to purchase products of said corporations would be to condone the harmful acts committed. If the plant operated at night to evade EPA regulations, the customer would be affected little in terms of quality of product. In fact, the customer would little know the difference. However, the effects of the pollution in the environment would still ripple out to effect the customer, particularly so since the practice was becoming more prevalent among corporations.
If the plant should choose to relocate to Mexico, the product would once again be affected little and its availability would neither be affected.However, the unequal treatment of workers in the different countries would be encouraged and the abandonment of the harmful effects inflicted upon Hondo condoned. Conclusion and Recommendations In conclusion, the options open to George result in major negative consequences to key stakeholders of the corporation. Therefore, the best alternative for George is to seek assistance from the employees of the company and the community at large to aid in petitioning for the relaxation of EPA standards.
Should the petition fail, George should order the plant to be moved to Mexico. However, given that he was only instructed not to increase expenses and not told to decrease the same, George should hire Mexican employees at the same wage and salary offered to their Hondo counterparts. The strongest argument against relocation was the devastation of the community’s infrastructure. Such an argument to be taken against the corporation should be premised on the corporation’s lack of concern for the laying off of its employees and of the loss of investment in the community.
The appeal to be made by the employees and the community at large coupled with the dissemination of the consequence of a failed petition would partially relieve the corporation of such presumption and the liability for economic loss or regress. Given that the EPA, as alterego of the State, is acting in the interest of the community, a rejection of the appeal would only mean an acceptance of the economic impacts of the same. The EPA’s responsibility in the controversy was to adequately balance its role in implementing regulations as well as upholding the local community’s concern.To approve the petition would be to prioritize the economic situation of the community while to reject the petition would be to prioritize the environmental situation.
It may be said that the corporation should still choose to produce at levels where smokestack emissions are acceptable. However, as has been established, the shareholders of the corporation also stand to suffer should sales decrease and profits be adversely affected. The shareholders too had rights which needed to be addressed and their social contract with the corporation involved and understanding for optimal profits.A secondary argument against relocation was the pollution to be transferred to such locality and the abuse of the lax regulations and cheap labor offered by Mexico.
It can be argued that the lax regulations of the country were thoroughly studied by the same and the corporation, in not transgressing the acceptable standards set, was not violating any law. It is true that the corporation already knew that it was operating at a level of harmful pollution but certainly Mexican official could easily obtain the laws of other countries and compare their standards with the same.Having made its standards lower than other countries was beyond the scope of responsibility of the corporation. Finally, the abuse of cheap labor need not be practiced by the corporation.
Having been able to satisfy itself with the profits obtained at past levels of production, it should be able to satisfy itself still without a change in the wages offered its employees. In such a manner the residents of the community to be transferred to would also benefit economically from the presence of the corporation. A concern that is not addressed however, is the pollution abandoned by the corporation in Hondo.Certainly it cannot be said that the community should now be responsible for the cleaning.
It can only be said that in Kohlberg’s model of morality the corporation would be free from liability of the pollution. The liability of the corporation was imposed upon it by the EPA warning that should further emissions at such levels be observed the company would be penalized. Seeing as the appeal had been made by the company, its employees, and the community-at-large and no observations of violations had yet to be reported by the EPA, the company had yet to be wrong in its continued emissions.However, should the appeal be disapproved then the continued emissions in Hondo would be deemed immoral.
Whereas if the plant was relocated to Mexico then it would be entirely in accordance with the social contract observed with the community and with EPA. The pollution left behind was not contemplated in any law, as evidenced by the warning issued by the EPA covering only future observed violations and the social contract only covering the desistance from continued emissions at the time of the contract’s perfection, when the EPA released its decision on the appeal made by the company and the community.
