Case Study-James Hardie

Topics: Corporate social responsibility, Social responsibility, Business ethics Pages: 7 (2105 words) Published: October 26, 2008
Executive summary:

This report serves to analyze the external and internal environment of James Hardie and explain the important of managerial ethics and corporation social responsibility. In James Hardie case, since the managers solely pursued profit maximization, it neglected employee’s safe and health, which result in 137 young worker died due to asbestos-related diseases. Money as the single bottom line is increasingly a thing of past. Pursued profit leads to unethical management, propagate false or misleading information, bad corporation reputation, unstable employment, reducing long run profit etc. More and more concern is displayed with managerial ethics and social responsibility. Some may regard them as cost which will eliminate their competitive power, however, in my opinion; organization could not survive without them in long run. As a developing country, corporation social responsibility in China is still a start, but it is getting more and more important.

Part A: Case Study

1.Internal Environment Analysis

James Hardie is a world leader in fibre cement technology, established in 1937. It is operating in the United States, Australia and New Zealand. Now, James Hardie is also expanding into Asia, with a manufacturing plant in the Philippines, and into Europe.

According to their website announcement, their aim and growth strategy are: •Create value for customers and shareholders.
Aggressively growing fibre cement businesses in markets and seeing new markets. •Establish a differentiated competitive.
Maintaining leadership in products, technology, manufacturing and brand management

Based on above announcement and case situation, we could discover that: 1.The culture of James Hardie is aggressive to development and profit maximization. 2.The managerial ethics of James Hardie is utilitarian view. Peter Macdonal, the CEO of James Hardie make every decision is solely on the basis of profit.

In this case, James Hardie’s board of director ignored employee’s benefit and social responsibility. They tried their best to pursue profit and escape their obligation. All of these reflect their company’s culture. Culture has an effect on decision. Pursuing profit maximization must lead manager to chase for money by any kinds of means.

2.External Environment Analysis

1)In James Hardie’s case, we could realize the power of external environment. The customer pressure and government involvement are the critical factors in solving this problem. Employee: raise the issue and ask for the compensation

Government: investigate the issues
Consumer/Public Pressures: push the government and James Hardie to face the issues by boycott and media.

2)James Hardie neglected the power of external environment and the importance of social responsibility, which lead to: Bad reputation -James Hardie is regarded as an irresponsible company. Sales reduction-The boycott from public must reduce revenue seriously. A huge obligation for the compensation

Not good for the long term profit

3)No one can live out of society. No matter the general environment factors or the specific environmental factors would have an effect on business. The decision maker should consider them before making any choices.

3.Brief Summary

According to the internal and external analysis, we realized that: 1)The good/ethical culture is important for management.
2)Profit is not everything. For long term benefit, company should display a concern with social responsibility.

Part B: Managerial Ethics

Today people are finding that there’s more to life—and business—than profits alone. Money as the single bottom line is increasingly a thing of the past. In a post-Enron world, values and ethics are an urgent concern. The hottest buzz today is a commitment to “people, planet, profit.” Employees and the environment are seen as important as economics.

1.What is ethics in...
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