Corporate Ethics: Stakeholders, ESG and the workplace

ABC Ltd. is a large transnational company having diversified business activities with a huge shareholder base. The company is continuously expanding and generating employment. The company, in its expansion and diversification programme, decides to establish a new plant at Vikaspuri, an area which is underdeveloped. The new plant is designed to use energy efficient technology that will help the company to save production cost by 20%. The company’s decision goes well with the Government policy of attracting investment to develop such underdeveloped regions. The Government has also announced tax holiday for five years for the companies that invest in underdeveloped areas. However, the new plant may bring chaos for the inhabitants of Vikaspuri region, which is otherwise tranquil. The new plant may result in increased cost of living, aliens migrating to the region, disturbing the social and economic order. The company sensing the possible protest tried to educate the people of Vikaspuri region and public in general that how its Corporate Social Responsibility (CSR) policy would help overcome the likely difficulties of the residents of Vikaspuri region. In spite of this the protests begin and some of the residents decided to approach the judiciary as their plea before the Government did not yield any result. (a) Identify the issues involved in the case. (b) What can be suggested to satisfy the company’s goal and to address the residents’ concern?

There is a technological company named ABC Incorporated which is the second largest worldwide, situated in the Third World. You are the Chief Executive Officer and the majority shareholder of this company. The fast technological improvements have raised worries among environmental activists, regulatory authorities, and the general public over the sustainability of this scenario. You confront substantial issues about the business’s environmental footprint. In 2023, your organization had a significant increase of 48% in greenhouse gas emissions compared to the levels recorded in 2019. The significant rise in energy consumption is mainly due to the surging energy requirements of your data centers, fuelled by the exponential expansion of Artificial Intelligence (AI). AI-powered services need much more computational resources and electrical energy compared to conventional online activities, notwithstanding their notable gains. The technology’s proliferation has led to a growing concern over the environmental repercussions, resulting in an increase in warnings. AI models, especially those used in extensive machine learning and data processing, exhibit much greater energy consumption than conventional computer tasks, with an exponential increase. Although there is already a commitment and goal to achieve net zero emissions by 2030, the challenge of lowering emissions seems overwhelming as the integration of AI continues to increase. To achieve this goal, substantial investments in renewable energy use would be necessary. The difficulty is exacerbated by the competitive environment of the technology sector, where rapid innovation is essential for preserving market standing and shareholders’ worth. To achieve a balance between innovation, profitability and sustainability, a strategic move is necessary that is in line with both, business objectives and ethical obligations. (a) What is your immediate response to the challenges posed in the above case? (b) Discuss the ethical issues involved in the above case. (c) Your company has been identified to be penalized by technological giants. What logical and ethical arguments will you put forth to convince about its necessity? (d) Being a conscience being, what measures would you adopt to maintain balance between AI innovation and environmental footprint?

A reputed food product company based in India developed a food product for the international market and started exporting the same after getting necessary approvals. The company announced this achievement and also indicated that soon the product will be made available for the domestic consumers with almost same quality and health benefits. Accordingly, the company got its product approved by the domestic competent authority and launched the product in Indian market. The company could increase its market share over a period of time and earned substantial profit both domestically and internationally. However, the random sample test conducted by inspecting team found the product being sold domestically in variance with the approval obtained from the competent authority. On further investigation, it was also discovered that the food company was not only selling products which were not meeting the health standard of the country but also selling the rejected export products in the domestic market. This episode adversely affected the reputation and profitability of the food company. (a) What action do you visualize should be taken by the competent authority against the food company for violating the laid down domestic food standard and selling rejected export products in domestic market? (b) What course of action is available with the food company to resolve the crisis and bring back its lost reputation? (c) Examine the ethical dilemma involved in the case.

A private company is known for its efficiency, transparency and employee welfare. The company though owned by a private individual has a cooperative character where employees feel a sense of ownership. The company employs nearly 700 personnel and they have voluntarily decided not to form a union. One day suddenly in the morning, about 40 men belonging to a political party gate-crashed into the factory demanding jobs in the factory. They threatened the management and employees, and also used foul language. The employees feel demoralized. It was clear that those people who gate-crashed wanted to be on the payroll of the company as well as continue as the volunteers/members of the party. The company maintains high standards in integrity and does not extend favours to civil administration that also includes law enforcement agency. Such incidents occur in public sector also. (a) Assume you are the CEO of the company. What would you do to diffuse the volatile situation on the date of gate-crashing with the violent mob sitting inside the company premises? (b) What could be the long-term solution to the issue discussed in the case? (c) Every solution/action that you suggest will have a positive and a negative impact on you (as CEO), the employees and the performance of the employees. Analyze the consequences of each of your suggested actions.

An apparel manufacturing company having large number of women employees was losing sales due to various factors. The company hired a reputed marketing executive, who increased the volume of sales within a short span of time. However, some unconfirmed reports came up regarding his indulgence in sexual harassment at the work place. After sometime, a woman employee lodged a formal complaint to the management against the marketing executive about sexually harassing her. Faced with the company’s indifference in not taking cognizance of her grievance, she lodged an FIR with the Police. Realizing the sensitivity and gravity of the situation, the company called the woman employee to negotiate. In that she was offered a hefty sum of money to withdraw the complaint and the FIR and also give in writing that the marketing executive is not involved in the case. Identify the ethical issues involved in this case. What options are available to the woman employee?

You are the Executive Director of an upcoming Infotech Company which is making a name for itself in the market. Mr. A, who is a star performer, is heading the marketing team. In a short period of one year, he has helped in doubling the revenues as well as creating a high brand equity for the Company so much so that you are thinking of promoting him. However, you have been receiving information from many corners about his attitude towards the female colleagues; particularly his habit of making loose comments on women. In addition, he regularly sends indecent SMS’s to all the team members including his female colleagues. One day, late in the evening, Mrs. X, who is one of Mr. A’s team members, comes to you visibly disturbed. She complains against the continued misconduct of Mr. A, who has been making undesirable advances towards her and has even tried to touch her inappropriately in his cabin. She tenders her resignation and leaves your office. What are the options available to you? Evaluate each of these options and choose the option you would adopt, giving reasons.

A fresh engineering graduate gets a job in a prestigious chemical industry. She likes the work. The salary is also good. However, after a few months she accidentally discovers that a highly toxic waste is being secretly discharged into a river nearby. This is causing health problems to the villagers downstream who depend on the river for their water needs. She is perturbed and mentions her concern to her colleagues who have been with the company for longer periods. They advise her to keep quiet as anyone who mentions the topic is summarily dismissed. She cannot risk losing her job as she is the sole bread-winner for her family and has to support her ailing parents and siblings. At first, she thinks that if her seniors are keeping quiet, why should she stick out her neck. But her conscience pricks her to do something to save the river and the people who depend upon it. At heart she feels that the advice of silence given by her friends is not correct though she cannot give reasons for it. She thinks you are a wise person and seeks your advice. (a) What arguments can you advance to show her that keeping quiet is not morally right ? (b) What course of action would you advise her to adopt and why ?

You are the head of the Human Resources department of an organisation. One day one of the workers died on duty. His family was demanding compensation. However, the company denied compensation because it was revealed in investigation that he was drunk at the time of the accident. The workers of the company went on to strike demanding compensation for the family of the deceased. The Chairman of the management board has asked for your recommendation. What recommendation would you provide to the management ? Discuss the merits and demerits of each of the recommendations.

You are the manager of a spare parts company A and you have to negotiate a deal with the manager of a large manufacturing company B. The deal is highly competitive and sealing the deal is critical for your company. The deal is being worked out over a dinner. After dinner the manager of manufacturing company B offered to drop you to the hotel in his car. On the way to the hotel he happens to hit a motorcycle injuring the motorcyclist badly. You know the manager was driving fast and thus lost control. The law enforcement officer comes to investigate the issue and you are the sole eyewitness to it. Knowing the strict laws pertaining to road accidents you are aware that your honest account of the incident would lead to the prosecution of the manager and as a consequence the deal is likely to be jeopardized, which is of immense importance to your company. What are the dilemmas you face ? What will be your response to the situation ?