Ethics & Corporate Social Responsibility

Topics: Ethics, Business ethics, Social responsibility Pages: 8 (1611 words) Published: October 1, 2014

CINCO CASE

ETHICS AND SOCIAL RESPONSIBILITY

Introduction/Summary
Often times, many business decisions are not always black and white and there are ethical dilemmas that leaders sometimes face. “Leadership must know how the myriad human behaviors and interactions fit together like puzzle pieces to create a whole picture” (Kehoe, pg. 201). Ethics is the study of honest behaviors and decisions, examining what should be done in relation with Corporate Social responsibility (CSR). Corporate social responsibility is a business’s commitment to contribute to economic development while improving the quality of life of the workforce and their families as well as the community and society at large. (Investopedia, 2014) This case discusses Ethics and Corporate Responsibility by observing Cinco, a pulp processing plant. As a newly promoted plant manager for Cinco, Jim is required to prove his ability to effectively manage several employees who have been with the company much longer than he has, and as a result, are more experienced and insensitive to change. “Cinco’s policy is to give each manager a freehand in dealing with employees, the community and the plant itself. It’s main measure of performance is the bottom line and the employee’s are keenly aware of this fact” (Ferrell, pg. 1). With this in mind, we can assume that if Jim attempts to change the way the plant is managed, his efforts could very well be overlooked and ignored. The first time Jim understood an ethical dilemma was upon his discovery of the fraudulent water sample data reports being sent to the Environmental Protection Agency (EPA). In order to avoid a shutdown, the plant’s waste disposal into the river needed to be in compliance with the EPA standards. After Jim was told that the mill’s waste disposal into the river exceeded the EPA’s guidelines, Jim ordered tests of the water for the last 6 months. After comparing the reports against EPA standards, he saw no violation. As a result, Jim checked the mill to test the water himself, only to learn the truth behind the plants operations. The mill had never been modernized to meet EPA standards, so they needed to divert the bad waste to one of the four large storage tanks, and twice a week, they dumped it into the river. However, according to past EPA reports, the mill had always been in compliance. Jim grew suspicious and wondered how there was discrepancy in the EPA reports. Jim learns of a miscellaneous expense of $100 a month, and realizes that this was essentially a bribe payment to Ralph in order to operate the plant under the radar, while they continued to violate the new EPA standards. It was evident that this fraudulent activity was the cause of the discrepancy within the reports. Given the current circumstances, it is critical that Jim consider the potential ethical issues at risk as he examines each of his alternatives as a manager. We have identified four options for Jim: A. Meet with higher management and discuss the ramifications of the EPA to discuss to pay for new equipment and meet the EPA standards. B. Pay Ralph for 2 years until he can get new equipment. C. Quit or D. Find a trusted person in the media and explain the situation and have a community member find the issue with the water. Potential Ethical Issues (PEIs)

As the plant manager, Jim is faced with an ethical dilemma that requires him to make a decision that could jeopardize his position and/or potentially shut down the plant. Not only was a bribe payment to keep the plant open an ethical issue and risk, but also the fact that the company was essentially committing fraud. Further, by violating the EPA standards and lying about it to the public, the company was risking an exposure for a poor reputation by neglecting to be socially responsible. Jim’s ethical issue raises several questions, each possessing varying levels of risk: Does Jim quit his managerial job at Cinco to only allow for...

Bibliography: A Framework for Thinking Ethically. (2009, May 1). A Framework for Thinking Ethically.
Retrieved from http://www.scu.edu/ethics/practicing/decision/framework.html
Boatright, J.R. (2013) Confronting Ethical Dilemmas in the Workplace. Financial
Analysts Journal
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