Stakeholders, Ethics, and Environmental Impact: A Case Study of Ardnak Plastics Company

In this scenario, George was having a smoke emission problem in the industry, and the numbers were higher than those allowed by the Environmental Protection Agency (EPA). The pollution resulted in fines for the company. They could not fix the problems, too, since they had no funds. George did not know what to do since he received a reprimand from Bill (Fraedrich, 1992). George was also supposed to fire the employees because there were very few jobs in the industry. Bill threatened that if the problem was not solved, he would relocate the company to Mexico, where there were no environmental agencies. A stakeholder is a party that has an interest in a company that can either affect or be affected by a business (Harrison et al., 2015). The concept of stakeholders in the business allows individuals to come together to create economic value. The participation of diverse individuals in a company will enable each one of them to develop in their situations. To attain the success of a company, the leader of an organization must identify the factors that bring the company stakeholders together (Harrison et al., 2015). Through this, they will develop the type of relationships they desire and how they wish to conduct the business. If each of the stakeholders works well, then the company will achieve its goals, and all the partners will benefit as they want.

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The key stakeholders, in this case, are George, Bill, and the employees. These people have a significant amount of influence on the company. George’s family, residents of the community, the Environmental Protection Agency, and other executives of Ardnak Company are also stakeholders in this issue (Fraedrich, 1992). The Mexican town residents too are stakeholders in the plant. The above are stakeholders in this case because they are all being affected by any decisions made.

George, as the manager and a primary stakeholder, has an interest in protecting the environment by following the policies of the Environmental Protection Agency and also protecting the employees by trying to safeguard their jobs. The manager is protecting the livelihood of the town of Hondo and, lastly, the investment of the stakeholders (Fraedrich, 1992). His wife also has an interest in a way that she does not want George to be responsible for the loss of jobs of their family members.

The occupants, too, have an economic attentiveness, which will be at risk if the plant company is moved. The employees who labor at Hondo contribute significantly to the native economy of the place. They have an interest in securing their jobs since the moment the plant is relocated, they will lose their work, and it will affect the economy of Hondo (Fraedrich, 1992). Since the company is polluting the environment, the residents of Hondo deserve to be shielded from this. They, therefore, have the interest to be kept healthy, with lesser amounts of contaminants. This will enable them to avoid breathing problems or lung diseases. The inhabitants in Mexico also have attentiveness in terms of the impacts on their health due to pollution caused by the company. The residents also have attentiveness to economic achievements that might be made by having more people laboring in the company if it is moved.

The shareholders of the company also have attentiveness in getting a worthy return on what they have invested in the firm (Harrison et al., 2015). Therefore, anything that endangers their investment like increased fines and shutting down of the company is their interest. Lastly, the importance of the Environmental Protection Agency is to protect the surroundings and the people from pollution. The environmental agency must regulate and manage waste emissions and also monitor the environment (Environmental Protection Agency, 2020). The Ardnak plant has violated the rules by polluting the environment yet not looking for possible solutions to solve the problem.

The decision-maker, in this case, is George, the manager. His responsibility to provide for his family by making the loss or helping them maintain their jobs outweighs his ethical obligation to company stakeholders. Considering the problems that he was facing by then, George had the option to leave the company and seek a new job simply (Fraedrich, 1992). George could leave behind the burden and ethical problems of the company. The fact that his wife does not want him to be responsible for the loss of jobs of their family members acts as a hindrance to him. At this time, he fails to protect the interests of other company stakeholders.

Conclusion

In conclusion, by allowing the release of pollutants into the air, the Ardnak plastics company goes against laws made by the environmental agency. The release of contaminants also violates the ethical and human rights of the stakeholders. George being the manager should make quick decisions to solve the problems as fast as possible to protect the interests of the stakeholders. He should communicate with the board of directors or somebody more superior than Bill to come up with a solution. George should make the right ethical decisions to safeguard and protect the interests of the stakeholders.

References

Environmental Protection Agency. (2020). Us epa. US EPA. Retrieved August 6, 2020, from https://www.epa.gov/Fraedrich, J. (1992). Business Ethics Program. Southern Illinois University

Harrison, J. S., Freeman, R. E., & Abreu, M. C. S. D. (2015). Stakeholder theory as an ethical approach to effective management: Applying the theory to multiple contexts. Revista brasileira de gestão de negócios, 17(55), 858-869. https://www.scielo.br/scielo.php?pid=S1806-48922015000200858&script=sci_arttext