Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Suppose a manufacturing facility emits into the air a chemical that it has reason to believe is inadequately regulated by the EPA and that poses a significant threat to nearby residents even at levels lower than permitted by the EPA. As manager of the facility, would you be satisfied to meet the EPA required level or would you install the additional controls you believe necessary to achieve a reasonably safe level? Keep in mind that installing these controls would be expensive and you can anticipate resistance from corporate executives as well as shareholders. Explain why or why not. Support your answer with one or more of The five ethical theories ; rights theory, justice theory, utilitarianism, shareholder theory, and virtue theory and 1 peer reviewed source.

Business Ethics

Business ethics is a factor that influences the business success and brand image in many sectors. Despite being an expensive undertaking sometimes, it leads to long-term profitability for an entity. Managers must consider the firm’s responsibility to the community, employees, the environment, and other stakeholders. As a manager, I would install the additional controls to achieve reasonably safe levels per the rights theory and utilitarianism approaches.

The rights theory is one of the most fundamental theories that govern business practices. Rights theory has to do with securing or preserving certain liberties or benefits for their holders (Jones et al., 2007). The nearby residents have the right to life free from artificial factors that may cause health problems. It would be my obligation, as the manager, to avoid putting the people at risk of health complications hence the need to install additional controls.

Utilitarianism is also a crucial theory in this situation. This theory advocates the promotion of welfare, counting everyone’s welfare equally (Fox & Reece, 2012). It would be plausible to go with the decision that brings good to the higher number of people. Installing the additional controls would benefit more individuals and eventually avoid causing a negative influence on the brand image, which would benefit other stakeholders, including the shareholders and executives. Without the additional controls, only the shareholders would benefit, while nearby residents suffer from health complications, which could eventually damage brand image in the long run and impact brand equity.

Under the rights theory and utilitarianism approaches, I would install additional controls to reduce emissions. This decision would preserve the human rights of the nearby residents while bringing more benefits, which include a higher brand equity.

References

Fox, M. J., & Reece, A. (2012). Which Ethics? Whose Morality?: An Analysis of Ethical Standards for Information Organization. KNOWLEDGE ORGANIZATION, 39(5), 377–383. https://doi.org/10.5771/0943-7444-2012-5-377

Jones, T. M., Felps, W., & Bigley, G. A. (2007). Ethical Theory and Stakeholder-Related Decisions: The Role of Stakeholder Culture. Academy of Management Review, 32(1), 137–155. https://doi.org/10.5465/amr.2007.23463924