Topic: Environmental Protection
Characters: Bryan, Manager in new product development with a large chemical
company; Bill Gates, Plant Supervisor and Bryan’s superior
Bryan was recently hired by a large chemical company to oversee the construction of production facilities to produce a new product. X Chemical developed a new industrial lubricant which it felt it could produce at a price close to those of its competitors. The plant to manufacture the lubricant was built on land adjacent to the East River. X Chemical had already applied for and received the necessary permit to dump waste materials from the process in the river. Several other chemical plants in the near vicinity are also releasing waste materials into the river.
Bryan is concerned because the government agency which oversees the permit process has granted X Chemical a permit to release more waste in the river than previously anticipated. An additional stage in the production process which would have reduced the waste and recycled some materials became unnecessary due to the regulatory agency’s decision. Because the additional process would have added capital and production costs, it was not built as part of the existing plant. Yet, X Chemical has always stated publicly that it would do all that it could to protect the environment from harmful materials.
The company has had mediocre performance for several quarters, and everyone is anxious to see the new product do well. Tests have shown it to be a top-quality industrial lubricant which can now be produced at a cost significantly below these of their competitors. Orders have been flowing in, and the plant is selling everything it can produce. Morale in the company has increased significantly because of the success of the new product. Due to the success of the new product, all employees are looking forward to sizable bonuses from the company’s profit sharing plan.
Bryan is upset that the company failed to build the additional stage on the plant and fears that the excess waste released today will cause problems for the company tomorrow. Bryan approaches Bill Gates, the Plant Supervisor, with his concerns. Bill replies, “It’s up to the government agency to protect the river from excess waste, and the company only had to meet the agency’s standards. The amount of waste being released poses no threat to the environment, according to the agency. The engineers and chemists who originally designed the production process must have been too conservative in their rtes. Even if the agency made a mistake, the additional recycling and waste reduction process can be added later when it becomes necessary. At this point, building the additional process would require costly interruptions in the production process and might cause customers to switch to our competitors. Heck, environmental groups might become suspicious if production was stopped to add the additional process-they might see it as an admission of wrongdoing.
No one in the company wants to attract any unwarranted attention from the environmental groups. They give us enough trouble as it is. The best thing we can do is make money while the company can and deal with issues as they come up. Don’t go trying to cause trouble without any proof. The company doesn’t like troublemakers, so watch your step. You’re new here, and you wouldn’t want to have to find a new job.”
Bryan is frustrated and upset. He can see all the benefits of the new product, but inside he is sure the company is making a short-sighted decision which will hurt them in the long run. The Vice President of Operations will tour the plant next week, and Bryan is considering approaching the officer with his corm. It might also be possible to contact the government agency and request that the permit be reviewed. Bryan is unsure what to do, but he feels he should do something.
Author: Originally developed by Eric Heist, graduate student at Washington University, as a class project in “Ethical Decision Making.” Edited and submitted by Dr. Raymond L. I3ilgert, Professor of Management and Industrial Relations, Washington University.
What Are the Relevant Facts?
- X Chemical has a public policy of doing all that it can to protect the environment from harmful materials.
- X Chemical’s plant on the East River is releasing more waste than the company originally intended.
- The plant supervisor feels meeting the government’s standard, even if it is wrong, is all that the company is required to do; he refuses to do more.
- There is a reasonable chance that the company is endangering the environment, but there is no definite proof at this time.
What Are the Ethical Issues?
- Does the company have the obligation to protect the environment even if it means going beyond government standards?
- Is the company living up to its public promise?
- To what extent is Bryan responsible for taking action and informing others inside the company, such as the Vice President of Operations?
- If no one in the company will listen, should Bryan go to others outside the company (the government agency, the media, etc.) to bring this situation to their attention?
Who Are the Primary Stakeholders?
- Bryan and all other employees of X Chemical
- Stockholders of the company
- The wildlife, livestock, people, etc, dependent on East River for food and/or water
- The recreational users of East River
What Are the Possible Alternatives?
- Try to gather data from the engineers and chemists involved in the initial plan to provide hard evidence for Bryan’s concerns, and approach Bill Gates again.
- Inform the VP of Operations, and let him/her follow it up.
- Become a “whistle blower,” and approach persons outside the company to see that action is taken.
- Do nothing.
What Are the Ethics of the Alternatives?
- Ask questions based on a “utilitarian” perspective.
- What alternative results in the greatest benefits for the greatest number of people?
- How should the costs of potential harmful waste be measured? How does this compare with the business costs of adding the additional process?
- How do the benefits of being environmentally safe compare with those of following the government’s standards?
- Do the benefits of being true to the company’s public policy outweigh the profits possible by following the letter of the law?
- Ask questions based on a “rights” perspective. For example:
- What rights do the various stakeholders have, including Bryan and the employees of X Chemical, stockholders, the communities dependent on East River, and recreational users of East River?
- Does X Chemical or its employees have any duties, fiduciary or otherwise, to any of the stakeholders?
- Are the rights of any of the stakeholders being violated by what the company is presently doing?
- What does each stakeholder have a right to expect from the others?
- How do the stakeholders outside X Chemical expect it to act?
- Does X Chemical have any duty to the other stakeholders?
- Ask questions based on a “justice” perspective.
- Which alternatives most fairly distribute the benefits and burdens among the various stakeholders?
- Which stakeholders carry the greatest burden in each alternative?
- Can X Chemical ever recompense those wronged if they are indeed releasing a harmful amount of materials?
What Are the Practical Constraints?
- Bryan has a job to do at the plant, and he does not have a lot of time to commit to the pursuit of his concerns.
- Bryan will need hard evidence to make changes occur since he is new and relatively unknown in the company.
- There could be a deliberate cover-up of sensitive information that could result in Bryan’s being fired if he starts looking too hard.
What Actions Should Be Taken?
- What should Bryan do?
- What would be the “best” action(s) to take?
- What would you do if you were in Bryan’s position?
- What ethical theories (utilitarian, rights, justice) seem most relevant to this situation? Which provides the clearest course of action? Is this necessarily the best course of action?