“The Case of Plant Relocation”

“The Case of Plant Relocation”

Ethical issues refer to the standards which a business subscribes to and which help them distinguish between right and wrong and define their cause of actions morally. Lohrey (n.d) asserts that the company has ethical obligations in staffing related issues, health, and safety in the work environment, eliminating conflict of interests to their environment and so forth.

A review of the Electrocorp case shows that there are several ethical issues that arise in their operations and their decision to relocate to other third world countries. These issues include compensation packages and their ability to meet the needs of their staff. The second ethical issue deals with safety regulations in their operations. This is a critical issue given the fact that the company deals with dangerous solvents, which must be handled with extreme care. As such, the company faces the ethical problem of ensuring that they provide protection and safety procedures for its staff. The third moral issue is the company’s obligation to ensure environmental protection. Electrocorp, therefore, is obligated to ensure that they do not degrade their environment with harmful waste but rather ensure its safety in advance.

A stakeholder in a company simply refers to any group of individuals who have an interest in it, and as a result, they are affected or can affect the business (Chen and  Scott, 2020). The Electrocorp case brings together several stakeholders who have a role to play or are affected by the situation. The first is the management of the company who runs the operations of the company and makes all its decisions. The second group is the staff members who are engaged in the day to day operations of the company. However, with the staff comes the union leadership who represents them and advocate for their rights.

Another stakeholder is the government, which plays the role of enacting and implementing legislation that guides the operations of the company. The local communities in regions where the plants are also located are stakeholders who both benefit from the plant through employment opportunities. ethical issuesaffected by any environmental issues of the company.

The other significant stakeholders are the shareholders who have financial stakes in the company and are interested in seeing it improve its profitability. These are the people who put pressure on the company to ensure that it is performing well and even considers relocating to a third world nation to decrease costs of production and improve productivity.

Automobile manufacturers are also significant stakeholders as they are the ones who consume the products produced within the company. Electrocorp manufactures chips that are used in the automobile industry. Finally, the company makes use of various raw materials, and therefore suppliers are critical stakeholders

An assessment of the case shows that Electrocorp has several options that are available and which it needs to consider to make its decision. Therefore, the company can opt for one of the three options provided (Mexico, Philippines, or South Africa) as the new location for some of its plats. As such, it would have to close some of its plants in the US and proceed. The other option is to continue investigating to identify other international nations and sites that are more suitable to their tastes. The company can also decide to do away with all the plans and continue its operations. All these options will, however, require the firm to weigh them, assess their pros and cons, and choose the best alternative.

From the various options available, I believe the company should opt for one of the three locations provided, namely the Philippines. However, the company does not have to operate like other companies in the region. They can offer the workers higher pay instead of the prevailing rate of $1/day, allowing them to earn a living wage. This practice will make the firm much more attractive to workers and will enable them to get the desired workforce. Through their ethical obligation, the company can opt to enforce health and safety standards to protect the wellbeing of its employees and also take care of the environment through the adherence to proper waste management. The results will be an improvement in the reputation of the company which comes with numerous benefits

References

Chen, J., and  Scott, G. (2020). Stakeholder. Retrieved from https://www.investopedia.com/terms/s/stakeholder.asp

Lohrey, J. (n.d). Ethical Obligations in Business. Retrieved from https://smallbusiness.chron.com/ethical-obligations-business-70715.html