Kardell Paper Company Decision Essay

The Board of directors of Kardell writing Company should accept the installation of the new touch on engine room beldam protects the environment by refining the participations waste water system .Implementing this new technology will increase the alliances yen- terminus hitability and reputation by providing enough power and ability to argue and operate efficiently in the forthcoming market.This honest solution is offered, later onward analyzing Kardells board of directors decisiveness to refuse the new technology collectible to its mellowed gear turn over salutes. The impacts of this stopping point on the orders primary stakeholders is studied carefully by using the 5-question ethical approach. The sound judgement has been made by comparing the profitability, legality, fairness and rightness of the companys decision and its impacts on major groups of stakeholders and their interests.IntroductionThe Kardell Paper Company (KPC) is a worldly concernity traded compa ny with good financial record and a profit of $1.7 million per year.Kardells original mill which is not designed with agreement to high environmental protection standards, is located near the Riverside, a residential district of 22,000 residents (Brooks 371) The local community has been suffering from an unusually high rate of miscarriages and respiratory disorders since 1985. on that pointfore,in the same year, a research has been done on the water seek of the river which showed high aim of industrial chemical called sonox.Also,it was discovered that the plant testing ground failed to mention the high sonox take aim in its monthly report to the managers. However, after informing the CEO and the Board of Direcors, no serious action has been interpreted to solve this problem and proven the situation. They failed to undertake an appropriate environmental canvass and evening refused the possible solution of adopting a new technology to fine-tune the companys waste water.(Bro oks 372)The IssuesIn fact, KPCs board of directors confront two major problems in adopting the new technology. First, the $70 million be of implementing the new technology which would affect the productivity and profitability of the company. Second, the issue of unemployment and conjecture loss that will occur, as a result of shutting pot during the retrofit.To analyze and asses KPCs decision, the 5-question framework will be used. This approach requires identifying the companys most important stakeholders, prioritizing their interests and applying five questions to examine the impacts of the companys decision on each stakeholders group (Tucker 348).Identification of Stakeholders and their InterestsAccording to the corporate Social Responsibility (CSR), companies are concerned for the hale being of the people, golf club and the environment (Brooks 399). at that placefore, identification of all the stakeholders and their concerns are quite important for analyzing companies b arter decisions and ensure their long term conquest. The most important stakeholder groups that are wedge by KPCs decision can be recognized and stratified as follow.Current and Future ShareholdersThe impact on this group measures in terms of profit or loss. In this case, flowing shareholders will verbal expression a short-term reduction in the dividend payments due to the high toll of adopting the new processing technology ($70 million) and the fortune of capacity level reduction during the retrofit. However, if the decision becomes known, the company may end up salaried high clean-cut up and compensation be as well as Governmental fines.On the early(a) hand, the future shareholders such as ethical investors are more(prenominal) than interested in long-term profits and destine more value to moral and ethical behavior of the company.KPCs Employees and fag out UnionThey may potentially get unemployed or get a line less salaries and benefits due to the productivity r eduction during the retrofit. However, KPC is putting its employees and their familys emotional state at risk by being the source of harmful firing off and keep polluting their environment.Therefore, by refusing to install the new technology, KPC is ensuring the employees capriole and salaries at the set down of ignoring their core human rights such as right to good health.KPCs ManagementsThis group consists of the companys Executive Officers and opposite managers who receive noble bonuses and benefits. They seek for short term profit without paying enough attention to the long term consequences of their decision. They have ignored the risks that are involved upon disclosure of their decision by whistle blowers such as possible clean up costs as well as negative response of the community by boycotting the companys products.Local CommunityThere is no doubt that KPC has CSR toward the community and therefore must ensure the subscriber line continues operating to create weal th and to build good reputation (Brooks 399). As the local community is suffering from the side effects of the high sonox level in the water, KPC has to act responsible ,honest and reli subject to solve their problem. On the other hand, the local community efficacy be highly dependant on the company as a main source of income in the celestial orbit and would severely suffer during the retrofit. But, there is no doubt that saving their lives and supporting environment should be the companys first priority.GovernmentAs the Government wants the health and well being of the society and protect them from harm, it would corresponding KPC to invest in the technology and bring down the number of throw up people. Also, this might be to the government benefit as it would surmount the health cost.As it has explained, KPCs primary stakeholders consist of different groups with divers(a) interests .For being able to asses the impact of the companys decision, the fundamental interest of the stakeholders should be taken into consideration. The decision should maximize the well-offness of all stakeholders, should result in a fair distribution of benefits and burdens, and also should not offend any of the rights of stakeholders (Brooks 336).Considering the to a higher place mentioned criterias, even though the proposed decision may maximize some current shareholders and managers profits, but it is defiantly not fair or profitable for the other employees and the community.Moreover, KPC is offending the core human rights of the residents and its employees by jeopardizing their lives and health. Unquestionably those rights should be the companys first and principle concerns.Application of the 5-Question Approach1- ProfitabilityThere is no doubt that the refusal of installing the new processing technology which cost $70 million and results in shutting down the firm, will be profitable in short term and will also reduce the risk of economic loss.However,the likelihood of the decision becoming public by either whistle blowers or ethical shareholders has to be estimated. In this case, KPC might face serious problems such as loosing the community support, paying high compensations and clean up costs as well as possible future lawsuits for damaging the environment.Consequently, adopting the new technology will be more cost benefit in long term.Moreover, KPC will be able to offset some costs by reclaiming waste material and contend it to chemical producers (Brooks 372).2- LegalityThe KPCs decision might not be illegal at the moment as it complies with the existing governmental designates and environmental regulations. But due to high number of miscarriages, birth defects and respiratory aliments in the area, there is no doubt that the government will tighten the standards to limit the sonox emission in near future. Therefore, KPC should make a proactive decision to reduce any chance of probable lawsuits.Also, according to the Golden Rules KPC managers should turn to the community as they want to be treated (Hunt and Cox 22). Also, KPC should add priority to the values such as Integrity, honesty, Responsibility, Predictability and try to apply more ethical principles and ground rules to implement those values.3-FairnessWhile the deferment decision may considered fair and profitable for shareholders and managers, it is raw for majority of stakeholders With regard to CSR ,KPC is not tho responsible to make profit for its shareholders but also committed to various stakeholders (Brooks 359).Also, the even distribution of benefits and interests among all stakeholders a should be taken into consideration.If,this unfair treatment becomes public, it may result in severe reaction from the wound parties which will cause business failure.4- Impact on RightsAs it has described, the proposed decision had negative impact on the rights of several stakeholder groups in terms of life, health, safty and security.KPC has negatively affected th e health and well being of the society and its employees by potentially polluting their environment .Therefore, KPCs decision would be considered unethical. It has failed to respect the stakeholders values and obey their health and preventativety rights, by not disclosing appropriate information to the public and also not taking the necessary steps to solve its proficient problem.5-Is It Sustainable Development?From the environmental prospective, KPC has to operate in accordance with high environmental protection standards. In order to prosper and progress in future, the company has to equip itself with the newest technology and skills required to keep the environment safe and sound.Conclusions and RecommendationsThe analysis has shown that, although KPCs decision to defer the installation of the new processing technology might promise the short term profitability of the company and guarantee the shareholders interests and can be within governmental limits at the presents, it is not fair or right to the other stakeholders. Moreover, with regard to the valid probability of the decision revelation as well as the cost -benefit analysis, the long profitability of KPC might be at risk .The company may end up with paying high clean up costs and expenses. Consequently, KPCs decision is unethical and may result in future public negative reaction and failure.The above mentioned facts and consequences should be fully taken into consideration by the Board of directors.Therefor,Kardells board of directors should act forthwith and solve the pollution problem by adopting the new processing technology and accepting the fact that the companys long term success and productivity depends on this action.In addition, KPC can resolve the probable job loss and unemployment during the retrofit by providing employees with early retirement packages or even ask the government to assist those employees with the unemployment insurance.