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Ethical Business Issues.

Select the answer that is most correct and prepare a brief, 150-word essay to provide a rationale for your choice. This activity allows you to demonstrate your understanding of ethical principles, the organizational and societal implications of ethical behavior, and the functioning of ethical systems within organizations.

Your company manufactures a wood product that requires the application of a chemical to the wood prior to the shaping process. Your company vents the chemical vapors to the outside air through a series of pipe openings. You have been told that the low concentrations of the chemical make it perfectly safe for humans, but the chemical can act as a herbicide in higher concentrations. The chemical is quite cheap and your product is not that profitable. Increases in manufacturing costs might result in a plant shut down, which would seriously harm the local economy, as you are the largest employer in the area by far. What should your company do?
a) Discontinue manufacturing until an equally cheap alternative chemical is found. Lay off all plant personnel until then.
b) Meet with local farmers and discuss the potential impact of the chemical in the event of rain concentrating the vapors and then falling on their fields. Set up a liability on your balance sheet to ensure that funds are available should the farmers be damaged, even if this liability may make your company think about shutting down the plant.
c) Because you are complying with the relevant laws and there is only a small chance that your product might create a problem, ignore the issue. The employment of so many local people is vital to the local economy.
d) Meet with the local government and ask for their advice, recognizing that this may place your company in a greater legally and financially vulnerable state. Allow the local government to make the decision.
e) Meet with the farmers immediately surrounding your plant and ask them to sign a waiver for "anything" that might happen as a negative consequence of the manufacturing process. Remind them that the local economy depends on their signing the waivers.

Operation Research, Management Studies

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