AWC Inc. is an aluminum fabricating company, situated in South-western Ontario, run by the MacDonald family. Not only is it known for its product design and quality, but also for its involvement in supporting employees’ families. AWC was involved in the community and committed to creating a family-oriented environment, through sponsoring local sports teams and providing summer work for children of employees. In July 1991, however, Alex MacDonald was faced with a predicament: AWC’s emissions control systems did not adhere to the regulations set by the Ministry of the Environment. In order to comply with regulations, he needed to invest $240,000 to $400,000 in ventilation equipment. However, the investment, coupled with the economic recession, would drastically cripple the company’s finances. This paper will analyze the ethical issues and alternatives for this case. What Changed to Cause Ethical Issues?
Jim MacDonald founded AWC Inc. in 1950. He nurtured it to become a successful organization with a great company culture and eventually passed it down to his son, Alex. It seemed as though AWC was well on its way. Unfortunately, a recession came about, financially crippling AWC and the aluminum fabrication industry. To uphold the firm’s competitive advantage, AWC created a new door design - one that was competitive in price, assembly, and performance. It significantly increased sales and was in high demand. It was functional even in high-use areas, provided that the door spent more time on the welding line for a stronger welded corner. This change proposed a problem. The welding line produces poisonous fumes. When inhaled, they can have dire consequences on employee health as they have been known to lead to respiratory damage and cancer. At the same time, there was a government focus shift towards environmental preservation. In order to coerce companies into taking social responsibility, the government implemented legislation that imposed harsher penalties for polluting the work environment with high concentrations of harmful particles and oxides. The environmental issue here affects AWC. If AWC decides to vent the fumes outside and pollute the air, it could be fined up to $400 000 a day for not complying with the regulations. Stakeholders
Jim was the founder of AWC and is indirectly involved. Before passing the company down, environmental issues were not of major concern to the government. During his time with AWC, only large companies were targeted for not complying with regulations. Ignoring regulations, he was able to form a successful company. From applying his experience in the past, Jim’s solution would be to ignore it and focus on financial stability. Alex wants to protect employees’ health but it may put AWC out of business. Not knowing what to do, he looks towards his father’s actions for guidance because they were successful in the past. However, his reality is different from Jim’s because of the shift in government focus to environmental sustainability. He realizes that from an ethical standpoint, it is only right for him to protect employee health and safety, as well as the environment, but feels conflicted due to AWC’s poor financial situation. What is being chosen for employees is either money to live by risking their health, or protecting their health, but risking not being able to find a job during the recession. Although they are not directly involved in the decision-making, employees are arguably the most affected by Alex’s decision of economic or health and environmental stability, which makes them stakeholders. Other stakeholders include the government, nearby neighbours, competitors and suppliers. The government is the one who implemented the environmental regulations, affecting Alex’s decision. Nearby neighbours may be affected by his decision, as it may affect the surrounding air by increasing pollution. Competitors hope that AWC will go out of business, as that will generate more...
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