Deck 12: Sustainability: Ethical and Social Responsibility Dimensions

Question 1

Jared worked for Darwin Chemical Company (DCC) for four years. DCC is a multinational corporation with subsidiaries in eight countries. About six months ago Jared was offered a job as a plant manager for its Chinese subsidiary.
"We don't usually offer this opportunity to someone who has only been with the company for a few years," said Jonathon, Jared's supervisor. "But in the short time you've been with the firm, we feel you've shown a lot of management potential. We also see from your resume you spent a semester abroad in China as part of your MBA program. We believe this makes you a better fit than other candidates since you are more familiar with the culture." Jared saw this promotion as a stepping stone to a much higher position within the company. He agreed to the promotion and arrived in China a few months later.
Jared found the transition in dealing with another culture challenging, but rewarding. He especially appreciated his assistant manager Bojing, who helped him learn the ropes and communicate with the employees. DCC gave Jared free rein in running the plant. Its main measure of performance is the bottom line, and employees are well aware of this fact.
A few weeks ago Jared noticed something odd about the plant's waste disposal procedures of one of its more popular chemicals. Developing this particular chemical involves a complex process, and every liter of water used results in half a liter of chemical waste. Company procedures stated this waste had to be disposed of safely. The problem was the paperwork employees were required to submit and file with corporate detailing how they performed the procedure was missing. In fact, Jared could not find any record paperwork had ever been filed.
Jared approached Bojing about the issue. "The paperwork is more of a formality," Bojing replied. "Nobody seems to follow up on it."
"That's beside the point," Jared said. "We need to have these systems in place to make sure we are disposing of waste properly."
After more questions, Bojing finally confessed that while they usually tried to dispose of the waste properly, in a time crunch the entire process took too long. This resulted in employees sometimes dumping the waste in the local river.
Jared was shocked. The local river was not large, and many of the rural villagers in the area used it for drinking water. "But this is a toxic chemical! How long has this been going on?"
"Several years now," Bojing stated. "However, the previous plant manager told us not to worry. He said when mixed with water the chemical byproduct loses its potency. You would need to consume a lot for it to be harmful."
Jared immediately took action. He ordered a halt to the operations to investigate the matter further. He called the employees of the plant together and stated that from then on they would be following all procedures for disposing of waste properly. He also reported the situation to his supervisor Jonathon back home and told him about the previous plant manager's knowledge and noncompliance with proper waste disposal.
When Jared called Jonathon, he detailed all of the changes he made and was planning to make. Jonathon congratulated him on detecting and immediately putting a stop to the improper disposal practices. Then Jared started to discuss how the company should report the situation to the Chinese authorities and discuss cleanup methods.
Jonathon was quiet for a while. "Look, Jared, you must understand that in China, water pollution and improper disposal of waste is more accepted than it is here. I'm not sure we should be worried about cleaning up the river, particularly as other companies in the area likely use the river to get rid of waste. We are not the only factory around there, after all."
"But Jonathon, people who use the river for drinking water might get sick," Jared replied.
"I don't know, Jared. A cleanup would cost millions of dollars, and we'd probably be cleaning up the mess of other factories in the area. Additionally, we would probably be given heavy fines since we're a foreign company. Besides, you said yourself people would have to consume a lot of this chemical waste before they got sick."
Jared hung up the phone, more confused than ever. He thought perhaps Jonathon was right. Maybe he was overreacting. However, later that day some reports he requested showed up. The reports stated that local fishing in the area had decreased dramatically in the past few years, and some of the fish were deformed or sickly. Jared was worried the chemicals could be impacting the fish population in the river. If this was the case, what kind of an impact might it have on the rural villagers using the river as drinking water?
Describe the ethical dilemma Jared faces.

Answer 1

The ethical dilemma J faces is that if the DCC company does not act to clean up the river where the discharge of toxic effluents into the river has gone on for many years, then the health not only of the fish in the river but also of the local community which draws drinking water from the river would continue to be affected. Cleaning the river would be expensive and would impact the bottom line of the DCC company. Not cleaning up the river despite being aware of the health hazards to the community would be unethical.
This is the ethical dilemma J faces.

Question 2

After graduating from Ohio State, Keisha got a job in the marketing and public relations department at a small soda company called Smith's Sodas. Smith's Sodas specializes in high-quality fruit-flavored soft drinks with unique flavors such as pomegranate, raspberry, blueberry, and coconut. The company had great plans for the future. In ten years Smith's Sodas wanted to become a competitor to its larger rivals, Pepsi and Coca-Cola. The company sold sodas with lower calories than its rivals and offered them in a variety of flavors. However, the product was only half the battle. The rest was up to the marketing department to promote the sodas as being superior to the competition.
Recently, Keisha was called into her supervisor's office and assigned a new project. She would take the lead in a marketing initiative that promoted a new feature meant to appeal to the eco-conscious consumer: biodegradable packaging. One of the company's suppliers came up with a soda bottle made with a new biodegradable plastic manufactured with plant materials. Keisha was told the supplier struggled to develop this plastic for years and Smith's Sodas was staking much of its credibility on developing an image as an environmentally-friendly organization.
Keisha immediately began learning about the plastic and writing up press releases to send to local news stations. She put in long hours working on a marketing campaign touting the product's sustainability and how much better it is for the environment. She stressed the fact that the plastic should be composted rather than simply thrown in the trash to biodegrade properly.
A few days ago Keisha received a call from a local reporter. "I've heard all of the hype concerning these biodegradable bottles your company is using. I wanted to test just how biodegradable this plastic really is. I contacted scientists at the local university to test its biodegradability. They tested the bottle under ten different conditions with different types of soil. Only four out of the ten tests resulted in the plastic degrading to any major extent." When Keisha hung up the phone, she decided to investigate whether the reporter's claims were accurate. After two days of phone calls, she finally contacted someone who had been involved in the actual development of the plastic.
"Yes, it's true the plastic only degrades under certain conditions," he informed her. "But that's still better than a lot of other plastics."
Keisha approached her manager, Louis, to discuss the issue. Louis did not understand Keisha's concern. "I don't see what the problem is, Keisha, other than the fact that this reporter is trying to cause trouble. As long as the plastic biodegrades under certain natural conditions, then we are fine."
"Yes, but Louis, our claims made it seem the bottles degrade fairly easily, when in reality people must compost them. Even then they only degrade under certain conditions. Isn't this a type of greenwashing?"
Louis frowned at the mention of greenwashing. "Keisha, the term biodegradable is vague. We have a supplier, and it is not our responsibility to prove the packaging is biodegradable. We are not being deceitful, and it is up to the consumer to know how to dispose of the package so it degrades properly. We can't control what happens to the product after the consumer buys it. Many may simply toss it into the garbage."
"What happens if the reporter publishes her findings?" Keisha asked.
Louis looked adamant. "We are not lying when we say the plastic is biodegradable. Besides, most companies have to rely on supplier claims. I don't see any reason why we need to change our marketing claims."
Are Smith's Sodas' marketing claims accurate and truthful?

Answer 2

The marketing claims of SS that the packaging made out of a new plastic is completely biodegradable are not accurate and truthful for the following reasons:
• As per an independent study, only in 4 tests out of 10 tests conducted in different soils, the packaging is significantly degradable.
• The bottles made out of the biodegradable plastic have to be composted in special soils for achieving significant biodegradability.
Since the marketing campaign is targeted at a niche target market where the consumers are particularly eco-conscious, puffery and exaggerated claims would boomerang.

Question 3

Jared worked for Darwin Chemical Company (DCC) for four years. DCC is a multinational corporation with subsidiaries in eight countries. About six months ago Jared was offered a job as a plant manager for its Chinese subsidiary.
"We don't usually offer this opportunity to someone who has only been with the company for a few years," said Jonathon, Jared's supervisor. "But in the short time you've been with the firm, we feel you've shown a lot of management potential. We also see from your resume you spent a semester abroad in China as part of your MBA program. We believe this makes you a better fit than other candidates since you are more familiar with the culture." Jared saw this promotion as a stepping stone to a much higher position within the company. He agreed to the promotion and arrived in China a few months later.
Jared found the transition in dealing with another culture challenging, but rewarding. He especially appreciated his assistant manager Bojing, who helped him learn the ropes and communicate with the employees. DCC gave Jared free rein in running the plant. Its main measure of performance is the bottom line, and employees are well aware of this fact.
A few weeks ago Jared noticed something odd about the plant's waste disposal procedures of one of its more popular chemicals. Developing this particular chemical involves a complex process, and every liter of water used results in half a liter of chemical waste. Company procedures stated this waste had to be disposed of safely. The problem was the paperwork employees were required to submit and file with corporate detailing how they performed the procedure was missing. In fact, Jared could not find any record paperwork had ever been filed.
Jared approached Bojing about the issue. "The paperwork is more of a formality," Bojing replied. "Nobody seems to follow up on it."
"That's beside the point," Jared said. "We need to have these systems in place to make sure we are disposing of waste properly."
After more questions, Bojing finally confessed that while they usually tried to dispose of the waste properly, in a time crunch the entire process took too long. This resulted in employees sometimes dumping the waste in the local river.
Jared was shocked. The local river was not large, and many of the rural villagers in the area used it for drinking water. "But this is a toxic chemical! How long has this been going on?"
"Several years now," Bojing stated. "However, the previous plant manager told us not to worry. He said when mixed with water the chemical byproduct loses its potency. You would need to consume a lot for it to be harmful."
Jared immediately took action. He ordered a halt to the operations to investigate the matter further. He called the employees of the plant together and stated that from then on they would be following all procedures for disposing of waste properly. He also reported the situation to his supervisor Jonathon back home and told him about the previous plant manager's knowledge and noncompliance with proper waste disposal.
When Jared called Jonathon, he detailed all of the changes he made and was planning to make. Jonathon congratulated him on detecting and immediately putting a stop to the improper disposal practices. Then Jared started to discuss how the company should report the situation to the Chinese authorities and discuss cleanup methods.
Jonathon was quiet for a while. "Look, Jared, you must understand that in China, water pollution and improper disposal of waste is more accepted than it is here. I'm not sure we should be worried about cleaning up the river, particularly as other companies in the area likely use the river to get rid of waste. We are not the only factory around there, after all."
"But Jonathon, people who use the river for drinking water might get sick," Jared replied.
"I don't know, Jared. A cleanup would cost millions of dollars, and we'd probably be cleaning up the mess of other factories in the area. Additionally, we would probably be given heavy fines since we're a foreign company. Besides, you said yourself people would have to consume a lot of this chemical waste before they got sick."
Jared hung up the phone, more confused than ever. He thought perhaps Jonathon was right. Maybe he was overreacting. However, later that day some reports he requested showed up. The reports stated that local fishing in the area had decreased dramatically in the past few years, and some of the fish were deformed or sickly. Jared was worried the chemicals could be impacting the fish population in the river. If this was the case, what kind of an impact might it have on the rural villagers using the river as drinking water?
How does Jonathon rationalize his reasons for not reporting the pollution?

Answer 3

J, the supervisor who heard the suggestion from his subordinate in China, the DCC plant manager, that the DCC company should report the pollution of the river to the Chinese authorities, had the following reasons to rationalize that the company should not report to the Chinese authorities.
• The Chinese laws are lax and every factory in the neighborhood has been dumping toxic wastes into the river. When everyone is guilty, it would be stupid of the DCC company to own up responsibility for the pollution caused to the river.
• In case the DCC company reports to the Chinese authorities, not only there would be a hefty fine, but also there would be enormous costs to clean up the river which the DCC company would have to bear.
• The fish in the river have already been affected by the pollution in the river. For humans, the impact would be less and would be noticeable after only large quantities of water from the river are consumed by the community.

Question 4

After graduating from Ohio State, Keisha got a job in the marketing and public relations department at a small soda company called Smith's Sodas. Smith's Sodas specializes in high-quality fruit-flavored soft drinks with unique flavors such as pomegranate, raspberry, blueberry, and coconut. The company had great plans for the future. In ten years Smith's Sodas wanted to become a competitor to its larger rivals, Pepsi and Coca-Cola. The company sold sodas with lower calories than its rivals and offered them in a variety of flavors. However, the product was only half the battle. The rest was up to the marketing department to promote the sodas as being superior to the competition.
Recently, Keisha was called into her supervisor's office and assigned a new project. She would take the lead in a marketing initiative that promoted a new feature meant to appeal to the eco-conscious consumer: biodegradable packaging. One of the company's suppliers came up with a soda bottle made with a new biodegradable plastic manufactured with plant materials. Keisha was told the supplier struggled to develop this plastic for years and Smith's Sodas was staking much of its credibility on developing an image as an environmentally-friendly organization.
Keisha immediately began learning about the plastic and writing up press releases to send to local news stations. She put in long hours working on a marketing campaign touting the product's sustainability and how much better it is for the environment. She stressed the fact that the plastic should be composted rather than simply thrown in the trash to biodegrade properly.
A few days ago Keisha received a call from a local reporter. "I've heard all of the hype concerning these biodegradable bottles your company is using. I wanted to test just how biodegradable this plastic really is. I contacted scientists at the local university to test its biodegradability. They tested the bottle under ten different conditions with different types of soil. Only four out of the ten tests resulted in the plastic degrading to any major extent." When Keisha hung up the phone, she decided to investigate whether the reporter's claims were accurate. After two days of phone calls, she finally contacted someone who had been involved in the actual development of the plastic.
"Yes, it's true the plastic only degrades under certain conditions," he informed her. "But that's still better than a lot of other plastics."
Keisha approached her manager, Louis, to discuss the issue. Louis did not understand Keisha's concern. "I don't see what the problem is, Keisha, other than the fact that this reporter is trying to cause trouble. As long as the plastic biodegrades under certain natural conditions, then we are fine."
"Yes, but Louis, our claims made it seem the bottles degrade fairly easily, when in reality people must compost them. Even then they only degrade under certain conditions. Isn't this a type of greenwashing?"
Louis frowned at the mention of greenwashing. "Keisha, the term biodegradable is vague. We have a supplier, and it is not our responsibility to prove the packaging is biodegradable. We are not being deceitful, and it is up to the consumer to know how to dispose of the package so it degrades properly. We can't control what happens to the product after the consumer buys it. Many may simply toss it into the garbage."
"What happens if the reporter publishes her findings?" Keisha asked.
Louis looked adamant. "We are not lying when we say the plastic is biodegradable. Besides, most companies have to rely on supplier claims. I don't see any reason why we need to change our marketing claims."
Discuss the justifications Louis uses to argue for the truthfulness of the company's marketing claims.

Question 5

Jared worked for Darwin Chemical Company (DCC) for four years. DCC is a multinational corporation with subsidiaries in eight countries. About six months ago Jared was offered a job as a plant manager for its Chinese subsidiary.
"We don't usually offer this opportunity to someone who has only been with the company for a few years," said Jonathon, Jared's supervisor. "But in the short time you've been with the firm, we feel you've shown a lot of management potential. We also see from your resume you spent a semester abroad in China as part of your MBA program. We believe this makes you a better fit than other candidates since you are more familiar with the culture." Jared saw this promotion as a stepping stone to a much higher position within the company. He agreed to the promotion and arrived in China a few months later.
Jared found the transition in dealing with another culture challenging, but rewarding. He especially appreciated his assistant manager Bojing, who helped him learn the ropes and communicate with the employees. DCC gave Jared free rein in running the plant. Its main measure of performance is the bottom line, and employees are well aware of this fact.
A few weeks ago Jared noticed something odd about the plant's waste disposal procedures of one of its more popular chemicals. Developing this particular chemical involves a complex process, and every liter of water used results in half a liter of chemical waste. Company procedures stated this waste had to be disposed of safely. The problem was the paperwork employees were required to submit and file with corporate detailing how they performed the procedure was missing. In fact, Jared could not find any record paperwork had ever been filed.
Jared approached Bojing about the issue. "The paperwork is more of a formality," Bojing replied. "Nobody seems to follow up on it."
"That's beside the point," Jared said. "We need to have these systems in place to make sure we are disposing of waste properly."
After more questions, Bojing finally confessed that while they usually tried to dispose of the waste properly, in a time crunch the entire process took too long. This resulted in employees sometimes dumping the waste in the local river.
Jared was shocked. The local river was not large, and many of the rural villagers in the area used it for drinking water. "But this is a toxic chemical! How long has this been going on?"
"Several years now," Bojing stated. "However, the previous plant manager told us not to worry. He said when mixed with water the chemical byproduct loses its potency. You would need to consume a lot for it to be harmful."
Jared immediately took action. He ordered a halt to the operations to investigate the matter further. He called the employees of the plant together and stated that from then on they would be following all procedures for disposing of waste properly. He also reported the situation to his supervisor Jonathon back home and told him about the previous plant manager's knowledge and noncompliance with proper waste disposal.
When Jared called Jonathon, he detailed all of the changes he made and was planning to make. Jonathon congratulated him on detecting and immediately putting a stop to the improper disposal practices. Then Jared started to discuss how the company should report the situation to the Chinese authorities and discuss cleanup methods.
Jonathon was quiet for a while. "Look, Jared, you must understand that in China, water pollution and improper disposal of waste is more accepted than it is here. I'm not sure we should be worried about cleaning up the river, particularly as other companies in the area likely use the river to get rid of waste. We are not the only factory around there, after all."
"But Jonathon, people who use the river for drinking water might get sick," Jared replied.
"I don't know, Jared. A cleanup would cost millions of dollars, and we'd probably be cleaning up the mess of other factories in the area. Additionally, we would probably be given heavy fines since we're a foreign company. Besides, you said yourself people would have to consume a lot of this chemical waste before they got sick."
Jared hung up the phone, more confused than ever. He thought perhaps Jonathon was right. Maybe he was overreacting. However, later that day some reports he requested showed up. The reports stated that local fishing in the area had decreased dramatically in the past few years, and some of the fish were deformed or sickly. Jared was worried the chemicals could be impacting the fish population in the river. If this was the case, what kind of an impact might it have on the rural villagers using the river as drinking water?
How might the water pollution impact different stakeholders?

Question 6

After graduating from Ohio State, Keisha got a job in the marketing and public relations department at a small soda company called Smith's Sodas. Smith's Sodas specializes in high-quality fruit-flavored soft drinks with unique flavors such as pomegranate, raspberry, blueberry, and coconut. The company had great plans for the future. In ten years Smith's Sodas wanted to become a competitor to its larger rivals, Pepsi and Coca-Cola. The company sold sodas with lower calories than its rivals and offered them in a variety of flavors. However, the product was only half the battle. The rest was up to the marketing department to promote the sodas as being superior to the competition.
Recently, Keisha was called into her supervisor's office and assigned a new project. She would take the lead in a marketing initiative that promoted a new feature meant to appeal to the eco-conscious consumer: biodegradable packaging. One of the company's suppliers came up with a soda bottle made with a new biodegradable plastic manufactured with plant materials. Keisha was told the supplier struggled to develop this plastic for years and Smith's Sodas was staking much of its credibility on developing an image as an environmentally-friendly organization.
Keisha immediately began learning about the plastic and writing up press releases to send to local news stations. She put in long hours working on a marketing campaign touting the product's sustainability and how much better it is for the environment. She stressed the fact that the plastic should be composted rather than simply thrown in the trash to biodegrade properly.
A few days ago Keisha received a call from a local reporter. "I've heard all of the hype concerning these biodegradable bottles your company is using. I wanted to test just how biodegradable this plastic really is. I contacted scientists at the local university to test its biodegradability. They tested the bottle under ten different conditions with different types of soil. Only four out of the ten tests resulted in the plastic degrading to any major extent." When Keisha hung up the phone, she decided to investigate whether the reporter's claims were accurate. After two days of phone calls, she finally contacted someone who had been involved in the actual development of the plastic.
"Yes, it's true the plastic only degrades under certain conditions," he informed her. "But that's still better than a lot of other plastics."
Keisha approached her manager, Louis, to discuss the issue. Louis did not understand Keisha's concern. "I don't see what the problem is, Keisha, other than the fact that this reporter is trying to cause trouble. As long as the plastic biodegrades under certain natural conditions, then we are fine."
"Yes, but Louis, our claims made it seem the bottles degrade fairly easily, when in reality people must compost them. Even then they only degrade under certain conditions. Isn't this a type of greenwashing?"
Louis frowned at the mention of greenwashing. "Keisha, the term biodegradable is vague. We have a supplier, and it is not our responsibility to prove the packaging is biodegradable. We are not being deceitful, and it is up to the consumer to know how to dispose of the package so it degrades properly. We can't control what happens to the product after the consumer buys it. Many may simply toss it into the garbage."
"What happens if the reporter publishes her findings?" Keisha asked.
Louis looked adamant. "We are not lying when we say the plastic is biodegradable. Besides, most companies have to rely on supplier claims. I don't see any reason why we need to change our marketing claims."
Assume there is a news story questioning the sustainability of Smith's Sodas packaging. How should Keisha respond?