Bryan was recently hired by a large X Chemical company, to oversee the construction of production facilities to produce a new product. X Chemical developed a new industrial lubricant which it felt could be produced 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 that allows the company to dump waste materials in to the river. Several other chemical plants in the near vicinity are also releasing their 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 Johns, 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 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 rates. 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. 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 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. (1992 Arthur Andersen & Co, SC. All rights reserved.) Consider the following relevant facts: 1. X Chemical has a public policy of doing all that it can to protect the environment from harmful materials. 2. X Chemical’s plant adjacent to the East River is releasing more waste than the company originally intended. 3. 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. 4. There is a reasonable chance that the company is endangering the environment, but there is no definite proof at this time. Referring to above case provide discussion on the Following 1. Who are the Primary Stakeholders? 2. Does the company has the obligation to protect the environment even if it means going beyond government standards? Why or why not? 3. Do you think, the company is living up to its public promise? Support your answer.
Bryan was recently hired by a large X Chemical company, to oversee the construction of production facilities
to produce a new product. X Chemical developed a new industrial lubricant which it felt could be produced
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 that allows the
company to dump waste materials in to the river. Several other chemical plants in the near vicinity are also
releasing their 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 Johns, 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 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 rates. 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. 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 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. (1992 Arthur Andersen & Co, SC. All rights
reserved.)
Consider the following relevant facts:
1. X Chemical has a public policy of doing all that it can to protect the environment
from harmful materials.
2. X Chemical’s plant adjacent to the East River is releasing more waste than the
company originally intended.
3. 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.
4. There is a reasonable chance that the company is endangering the environment, but
there is no definite proof at this time.
Referring to above case provide discussion on the Following
1. Who are the Primary Stakeholders?
2. Does the company has the obligation to protect the environment even if it means going
beyond government standards? Why or why not?
3. Do you think, the company is living up to its public promise? Support your answer.
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