Sustainable Management Futures - Case Study Example

Sustainable Management Futures Table of Contents Table of Contents 2 Scenario1. 3 Introduction 3 Theory 3 Application 5 Conclusion 8 Scenario 2 9 Introduction 9 Theory 9 Application 11 Conclusion 13 References 14 Scenario1. Introduction BASF is a German based oldest and leading chemical manufacturing company in the world. The organisation was founded long back in the year 1865. However, after a few years the organisation in order to expand its operations needed land and hence, selected the place known as Beaufort for the establishment of its factory. The people of Beaufort were happy because of the increased employment in the region. However, some of the resort owners had raised objection regarding the environment pollution and such establishment was anticipated to affect the business. The managers of BASF during that time were in a dilemma with regards to their expansion in Beaufort, which might create environmental pollution (BASF the Chemical Company, 2014). In this regard, the essay intends to assess the advantages and disadvantages of the theory of consequentiality and virtue ethics. Moreover, the essay intends to evaluate the decision of the manager with regards to the expansion of BASF in Beaufort through the application of the theory of Ethical Consequentiality. Theory Ethical Consequentialism is a normative theory which suggests that morality lies on the tenets of generating the right kind of consequences from an event or task. This would not only lead to the appropriate and good consequences and so also the best outcomes from the task. Thus, this theory determines the rightness or the wrongness of a task. In this regard, there is a concept of plain consequentialism, which determines the right actions. It is argued that there are only a few actions in the world that can be considered as a right action. These actions are the standard upon which the rest of the actions are determined with regards to the rightness of the action. Moreover, it is to be noted that the general people cannot determine the complete consequences of an action at the time of its execution. This lack of knowledge of the consequences leads to the wrong action and hence, the individual and the related people suffer. Thus, for an individual in order to determine the right action the individual must be logical and reasonable (Peterson, 2013; Hurley, 2011). There are certain benefits of this theory that would promote the betterment of the society and the individual that follows the theory. One of such is that the theory is morality appreciating. The theory enables to build moral and ethical values within the society. It helps individuals and groups to imbibe ethical actions in their day to day operation that would benefit them and the people directly or indirectly related to the decision. It creates a healthy environment of equality among the people of diverse groups. Moreover, it is to be noted that consequentialism solves varied range of the ethical issues that are required to be considered in decision making (Portmore, 2011). Another important aspect is that the theory can be applied to a wide range of decision making and actions. The theory can be applied in the personal lives of individuals and in the professional decision making process. It is equally important in organisational decision making and actions are subject to ethical terms (Tully, 2006). Further, consequentialism is theoretically very rich. The theory is the most accepted theories dealing with ethical decision making. The theory faces comparatively lesser amount of objections while the different logical statements of the philosophers can easily resolve the objections that question the validity of the theory. Last but not the least; the theory is considered one of the best theories so far in terms of ethical decision making. None of the theories with regard to ethical decision making has been so much effective as compared to the theory of consequentialism (Bergstrom, 1996). However, there are some different concepts regarding the ethical decision making. One of such concepts is the Utilitarian ethical theory. This theory is also a form of consequentialism theory. In this theory, the every decision should be considered on the basis of the optimum utility for the goodness of the society. Another such aspect is the non-consequentiality theories of ethics, which suggest that the rightness or the wrongness of a task can be determined by the inherent properties of the task and not through its consequences. In this regard, the ethical criteria of the decision are considered without the consequences of the decision (Carlson, 1995; Scheffler, 1988). Application The manager of BASF, who had been in a dilemma regarding the expansion of the organisation in the Beaufort region need to make decisions that rest on the principle of maximum good for all and least harm to them. BASF is a chemical manufacturing company that emits very harmful by-products capable of damaging the eco-system of the region. The by-products of the industry directly released into the river of Beaufort and hence, the water and the ecosystem of the region would significantly deteriorate. This deterioration of the ecosystem of the region would not only affect the people of the region, but also the market of the tourist agents of the region. Beaufort had been a major market for the tourist agency because of the incredible beauty of the nature in that region. The manager of BASF had found a strong objection from the tourist agents of the region. However, the people of the region were in strong support of the organisation because of the generation of employment in the poor economic condition of the region. This has led to the formation of a dilemma to the manger while considering the expansion of the organisation in the region (Scheffler, 1988). However, to resolve the issues regarding building a factory in the Beaufort region that would deteriorate the ecosystem of the region and the tourist market of the same. The issue can be resolved through the application of consequentialism theory. One of the aspects that the manager needs to consider is that the issue need to be solved through the consequences of the decision. Various alternative consequences would lead to the decision making with regards to the issue. One such alternative is a continuation of the project in the region. The consequence that would come from the undertaken alternative is that the poor people of the region would be employed and hence, the economic scenario of the region would uplift. As a result of this, the money multiplication in the region would occur and hence, would result into an economic boom. Consequently, it is to be noted that the foundation of the chemical factory in the region would also hamper its ecosystem. The by-products from the factory that would be directly released into the river would create an adverse environmental pollution in the region. This would affect the health of the people. Subsequently, the polluted environment would not attract the tourist and the hence, would significantly damage the tourist market in the region. This would result in an economic loss for the region. Hence, by sighting at the consequences of this alternative decision, it cannot be regarded as an ethical. This is because at the cost of the profit of the organisation, the ecosystem of the region would deteriorate and this would affect the health of the people of the region. Moreover, the decision would hinder the market of another sector, i.e. tourist (Peterson, 2013). Other alternative decision that is available to the manager of BASF is to discontinue the project. The consequence that would arrive after undergoing the step is the preservation of the ecosystem of the region and so the promotion of the tourist industry in the region. Consequently, the health of the people of the region would not be hampered. However, one of the fact that comes up through this step is the discouragement of the industry, and hence, the people will remain unemployed. This step also cannot be considered as ethical because the decision is not in favour of the poor people of the region who need employment (Peterson, 2013). The other alternative can be the application of technologies that would recycle the by-products of the factory. The consequence that would arrive from the decision is that the ecosystem of the region will have little impact while the health of the people will not have to bear the adverse impact of the eco-system disturbances. Subsequently, through the preservation of the ecosystem the tourist industry would not be under threat. Further, for the people of the region the employment generation would occur. Consequently, this would result into the economic boom of the region. Hence, this decision can be regarded as the most ethical. This is because through determining the consequences of the decision all the aspects are ethical and hence, the decision can be regarded as an ethical (Jarman, 2014; Peterson, 2013). Conclusion The chemical manufacturing company BASF had been facing a dilemma in introducing a factory in the Beaufort region. There were concerns for hampering the tourist industry in the region and the ecosystem. In this concern, the theory of consequentialism has been applied. This had let to a holistic solution of the issue considering the ethical issues through the consequences of the decision. The decision that is undertaken in this issue is the use recycling technology to the by-products of the factory. This would consequently lead to employment and economic boom. Subsequently, it would also lead to the boom in the tourist industry. Moreover, it is to be noted that the application of the consequentialism theory is not only limited to BASF, but can be applied in organisations in other industries. Scenario 2 Introduction The essay intends to resolve a certain issue of a financial organisation. The issues deal with the higher rate of interest from the clients who are engaged in offering loans. The financial organisation did not provide any prior knowledge to the client regarding the shift in the loan collecting body. Moreover, the financial organisation is generating a higher possibility of bad debt which may affect the debt collecting organisation and the clients. In this regard, the theory of corporate citizenship is considered an ideal solution. The issue is intended to be resolved through the application of the corporate citizenship, which considers the betterment of the society in terms of ethics and moral values. Theory Corporate citizenship is the responsibility of a corporate organisation to the society on the grounds of ethics and moral concerns. Corporate citizenship is also known as Corporate Social Responsibility (CSR). Thus, corporate citizenship denotes the responsibility of the organisation to profit and simultaneously, denotes the responsibility of the organisation to contribute to the community in terms of ethical and moral values. The objective of the organisation with regards to the corporate citizenship is that the standard of living of the people of the society is improved. Corporate citizenship also implies supporting the society during the period of crisis. The crisis of the society can be of the economical, natural disaster, wars, riots, and many more. Corporate citizenship influences an organisation to support the society during the circumstances of the miserable condition (Schwartz, 2011). As per the theory of the corporate citizenship four obligations are required to be followed by corporate entity. One of such obligation is that the corporate entity should consider measures to improve the economy of the respective nation. It should consider their responsibility in promoting the employment in the community. The corporate houses are those entities which provide the largest number of employment in the country. Hence, it is also the responsibility for them to promote the economy of the nation. Other obligation includes the responsibility in incorporating with the legal environment of the nation. The corporate entities should adhere to the rules and regulations of the nations. It should also adhere to the laws that are laid down by the supreme authority of the nation and so the various financial policies lay down by the central bank of the nation. This obligation would promote a healthy environment in the work place and would benefit the citizens and the nation (Grunewalder, 2008). Moreover, another decisive responsibility of the corporate entities is to consider the ethical responsibilities. The consideration of the ethical and moral values by the organisation is related with valuing the right and appropriate action that are required to be performed by the organisation. The consideration of ethical reasons in performing any action by the organisation would also lead to the betterment of the employees, the stakeholders and all the individuals that are engaged with the organisation. The ethical decision making by the organisation would also benefit the community, as the organisation would consider every aspect of decision making that would not cause any issue to the society (Mullerat, 2011). Furthermore, another obligation of the corporate entities with regards to the corporate citizenship is the consideration of philanthropic responsibility. Philanthropic responsibility of a corporate entity is the responsibility towards the community, which are not in any relation to the business process. The organisation providing support to the community and the country during the period of natural disasters like the floods, draughts, earthquake, and many more is a part of the philanthropic responsibility. This responsibility also includes contribution and support to the society and the nation during the period of economic crisis like recession, inflation, unemployment and political crisis during war, terrorist attack, and many more (Garriaga & Mele, 2004). There are also some other form of corporate citizenship. One of them is known as the Triple Bottom Line. There are three aspects of Triple Bottom Line. One of them is the social factor, where the organisation considers some of the measures to benefit the society. Another factor is the economical, where the corporate entity takes responsibility in improving the economic scenario of the nation or the community. Besides, ecological factor is also very crucial. The organisation considers the responsibility of preserving the ecosystem of the region during their business process (Savitz, 2012). Moreover, another form of corporate citizenship is the Stakeholder Theory. This theory suggests the generation of maximum possible value to the stakeholders. Thus, in order to do the same the organisation need to align the interest of the employees, customers, shareholders, suppliers and the people of the society (Brusseau, 2014; Phillips, 2003). Application Contextually, the financial organisation that offers loans to the clients who are affected by the sub-prime crisis in the recent past has indulged into an issue. The organisation takes a higher percentage of the interest from the clients. For instance, it is to be noted that the interest percentage is 7.5% in comparison to that of 1.5% earlier. Moreover, the financial organisation used to sell the loans to the other debt collecting organisations at 50% of the interest rate. The financial organisation had a predefined time for the collection of the loan from the client. There were also questions from the client end for the reasons of higher interest rate in the loan repayment. The reply that came from the organisation is the higher interest rate charged by the depositors to the bank. They were promoting the economy by providing higher interest rate to the depositors. Another, major concern is the shift in the loan collecting body. This shift in the debt collection body is being made without the prior knowledge of the client. Another severe issue that arise is the possibility of increased bad debt amount. The financial organisation that has been charging very high interest rate from the client, can lead to the formation of bad debt. This would not be the beneficiary for the loan collecting body and so for the clients. This is because the clients would indulge into legal cases after the default in the loan repayment (Mullerat, 2010). The issue can be resolved by the application of the theory of corporate citizenship. The financial organisation that has been intending to provide a wrong notion to the client regarding the organisation is providing higher interest rate to the depositors of the money. This wrong notion is not ethically acceptable. The clients should have the adequate knowledge of the business process of the organisation. It has also been observed that the organisation is selling the loans to the debt collecting organisation without the prior knowledge of the client. This aspect is also unethical as the clients would not find comfortable to repay the loan to another body (Sims, 2003). Moreover, it is also to be noted that the notion that the higher interest rate would promote the economy is also false. The higher interest rate means the lower possibility of the loan sanctioning for industrialisation and hence, it would not promote the economic growth (Hopkins, 2012). With regards to loan sanctioning and repayment, the financial organisation should take certain measures or avoid some of the unethical concerns in order to maintain corporate citizenship in the organisation. One of such aspect should be to reduce the interest rate charge for the loan. This would lead to the economic growth as the loan for industrialisation would be at ease, which simultaneously would promote industrialisation and hence, employment and thereby economic growth. It would also let to the reduction of the possibility of bad debt and hence, the client would not indulge in any legal case. This would also preserve the trust and the loyalty of the clients to the organisation. Moreover, another such aspect is providing the knowledge of the shift in the debt collecting organisation. This would lead the client to take loans as per his/her comfort zone. The client would have a belief and trust that the financial organisation would not indulge the client into any unethical terms (Jarman, 2014). Conclusion The financial organisation that has certain issues regarding the loan sanctioning and repayment is resolved by the application of the theory of corporate citizenship. The organisation intends to grasp higher interest from the clients and shift the debt collecting procedure without the knowledge of the client. These are considered unethical as these bold steps would hinder the community and the other debt collecting body. In this regard, the application of the corporate citizenship would be highly effective. The organisation would take steps for the betterment of both the society and the debt collecting body. Through the application of this theory the financial organisation would reduce the higher interest rate and would provide all the suffice knowledge to the client. This would lead to the generation of trust and loyalty of the clients to the organisation. Hence, it can earn higher profit later through this trust and loyalty of the people. However, it is to be noted that this theory is not only applicable to the financial organisation, but it is also equally applicable to any other organisation in different industries. References BASF the Chemical Company, 2014. About BASF. BASF Historical Milestones. [Online] Available at: http://www.basf.com/group/corporate/en/about-basf/history/index [Accessed October 10, 2014]. Bergstrom, L., 1996. Reflections on Consequentialism. Stockholm University, Vol. 62, Iss. 1-2. pp. 74-94. Brusseau, J., 2014. Three Theories of Corporate Social Responsibility. The Business Ethics Workshop, Vol. 1. Carlson, E., 1995. Consequentialism Reconsidered. Springer Science & Business Media. Garriaga, E. & Mele, D., 2004. Corporate Social Responsibility Theories: Mapping the Territory. Journal of Business Ethics, Vol. 53, Iss. 1-2, pp. 51-71. Grunewalder, A., 2008. Corporate Social Responsibility. GRIN Verlag. Hopkins, M., 2012. Corporate Social Responsibility and International Development: Is Business the Solution? Earthscan. Hurley, P., 2011. Beyond Consequentialism. Oxford University Press. Jarman, P., 2014. Sustainable Management Futures. Department: Economics, International Business and Operations Management, pp. 1-27. Mullerat, R., 2010. International Corporate Social Responsibility: The Role of Corporations in the Economic Order of the 21st Century. Kluwer Law International. Mullerat, R., 2011. Corporate Social Responsibility: The Corporate Governance of the 21st Century. Kluwer Law International. Peterson, M., 2013. The Dimensions of Consequentialism: Ethics, Equality and Risk. Cambridge University Press. Peterson, M., 2013. The Dimensions of Consequentialism: Ethics, Equality and Risk. Cambridge University Press. Phillips, R., 2003. Stakeholder Theory and Organizational Ethics. Berrett-Koehler Publishers. Portmore, D. W., 2011. Commonsense Consequentialism: Wherein Morality Meets Rationality. Oxford University Press. Savitz, A., 2012. The Triple Bottom Line: How Todays Best-Run Companies Are Achieving Economic, Social and Environmental Success -- and How You Can Too. John Wiley & Sons. Scheffler, S., 1988. Consequentialism and Its Critics. Oxford University Press. Schwartz, M. S., 2011. Corporate Social Responsibility: An Ethical Approach. Broadview Press. Sims, R. R., 2003. Ethics and Corporate Social Responsibility: Why Giants Fall. Greenwood Publishing Group. Tully, P. A., 2006. Refined Consequentialism: The Moral Theory of Richard A. McCormick. Peter Lang. Read More