Deck 13: Managing Sustainability

Question 1

What are the ethical, legal and economic responsibilities of the San Esteban Mining Company, the owner of the collapsed mine?

Answer 1

Ethical
Foremost, the San Esteban Mining Company has an ethical responsibility to increase its safety standards. The company cannot continue to profit off of human misery. Over a 12-year period, due to safety violations, eight employees died and there were a series of injuries. As a result, the company was fined for its transgressions. In 2007, the mine was temporarily shut down when miners died during a rock explosion and reopened in 2008 despite noncompliance with regulations. Finally, between 2004 and 2010, the company was fined 42 times for breaching safety regulations. To account for its poor safety record the mine continued to attract workers by agreeing to pay wages that were 20% higher than other Chilean mines.
Legal
San Esteban Mining Company also has a legal responsibility not to violate Chilean laws and regulations. The firm is only allowed to make a profit within the legal boundaries. Due to Chile's legal system, there was not enough evidence to determine the cause of the accident or to charge the mine owners or government officials with criminal responsibility for the collapse. The system has a lack of corresponding law codes, which makes it difficult to impose criminal penalties for accidents that result from safety infractions. San Esteban must follow strict safety guidelines implemented by the government and enforced by the regulatory agency to uphold its legal responsibility that will also allow it to fulfill its ethical responsibility.
Economic
San Esteban Mining Company has an economic responsibility to garner profit so that the company remains in business and has its basic needs for survival met. The company utilized legal loopholes to ensure that its economic objectives were being met. By agreeing to pay workers 20% more in the event of an incident or death. they were ensuring a consistent labor force that would continue to work regardless of the mine's inability to uphold the necessary standards and follow federal regulations.
2. What do you think about the result of the criminal investigation? What are the implications for Chile's mining companies?
The results of the criminal investigation demonstrate the flaws in the Chilean justice system. The prosecution was unable to find enough evidence to determine the cause of the accident or to charge the mine owners or government officials with criminal responsibility in the collapse. The lack of corresponding law codes makes it difficult to impose criminal penalties on mine owners for accidents resulting from safety infractions. Conversely, the government did make the necessary adjustments to the mining regulatory agency by changing the mining code and performing more frequent inspections. The incident also created uncertainty around the ageing condition of Chile's mines. The implications for Chile's mining companies include pressure for expansion due to poorer ore. Furthermore, the cost of mining has increased, threatening the industry financially, particularly small mines. Also, water costs are rising and mining requires a large amount of water, so this will significantly impact the industry. Finally, energy scarcity is causing companies to shut down nonessential machinery and they have to rely on backup generators that are costly.

Question 2

What do you think about the result of the criminal investigation? What are the implications for Chile's mining companies?

Answer 2

The results of the criminal investigation demonstrate the flaws in the Chilean justice system. The prosecution was unable to find enough evidence to determine the cause of the accident or to charge the mine owners or government officials with criminal responsibility in the collapse. The lack of corresponding law codes makes it difficult to impose criminal penalties on mine owners for accidents resulting from safety infractions. Conversely, the government did make the necessary adjustments to the mining regulatory agency by changing the mining code and performing more frequent inspections. The incident also created uncertainty around the ageing condition of Chile's mines. The implications for Chile's mining companies include pressure for expansion due to poorer ore. Furthermore, the cost of mining has increased, threatening the industry financially, particularly small mines. Also, water costs are rising and mining requires a large amount of water, so this will significantly impact the industry. Finally, energy scarcity is causing companies to shut down nonessential machinery and they have to rely on backup generators that are costly.

Question 3

Given the future prospect of the industry, how should Chile's mining companies manage their relationship with their workers and communities?

Answer 3

Labor problems in Apple's value chain result from multiple violations of workers' rights. One of its problems stems from Foxconn Technology's working conditions and organizational culture. Employees live in crowded on-site dorms and shifts run 24 hours a day and assembly lines for the most part do not stop. They are subject to military management and harsh ridicule. Employees often work excessive overtime hours and in some cases work seven days a week. This working schedule, long hours and repetitive daily routine causes employees both physical and mental stress. These conditions triggered public concern after a series of suicides in 2010, with employees attempting to jump off the building. Other problems Apple has faced with suppliers are: in 2007, underage workers were discovered at a few factories; in 2010, workers were injured after using a poisonous chemical to clean iPhone screens; in 2011, two explosions at local plants killed and injured workers due to combustible aluminum dust that could have been removed with proper ventilation; in 2012, there was a riot in worker dormitories; in 2013, there were allegations of worse working conditions with its new contractor, Pegatron.

Question 4

What do you think of Apple's efforts to address the problems? Are they appropriate and adequate?

Question 5

Will those problems drive Apple out of China? Why?

Question 6

The Chinese public seems ambivalent toward these problems. Why?

Question 7

How would you evaluate China's response to its environmental problem of rare-earth mining?

Question 8

What do you think of Apple's response to the pollution problem in its supply chain?

Question 9

Why is recycling not necessarily a good idea? How do we solve this predicament?

Question 10

What are the similarities and differences in CSR activities between Toyota Motor Company and Hyundai Motor Company in China?

Question 11

Which company do you think has more successfully integrated its CSR activities into its business strategy and why?

Question 12

What suggestions do you have to improve corporate sustainability for each company?

Question 13

What are the social responsibilities of Monsanto in conducting business in a developing country like India?

Question 14

How would you evaluate Monsanto's efforts to meet social responsibilities?

Question 15

What is the role of genetic engineering in crop improvement for achieving economic, environmental, and social sustainability?

Question 16

Evaluate the progress of the 2002 Rio Summit agreement documented in 27 Principles of the Rio Declaration. What have been the most significant achievements to date?

Question 17

What are the main challenges that MNCs are going to face in practicing corporate sustainability when conducting business across borders, and how can they effectively meet them?

Question 18

Discuss a specific ethical dilemma that falls into category 1 or category 2, respectively, as introduced in the ethical algorithm model. How useful do you find this model in resolving ethical dilemmas?

Question 19

Using the contingency model, identify and discuss an ethical dilemma that may justify the adoption of each of the seven different strategies introduced in the model.

Question 20

Which of the following does not describe sustainability?

A) Factors in the long-term survival of an organization
B) Measures the ability to sustain or endure within an industry
C) Strictly prioritizes short-term profit and growth
D) Considers both the economic and environmental impact of an organization's actions

Question 21

Which of the following represents the main issue concerned with sustainability?

A) Meeting stakeholders' current needs without compromising the ability to meet future needs
B) Meeting the needs of the present by compromising future generations' needs
C) Refusal to behave ethically and contribute to economic development
D) Ignoring business ethics and corporate governance

Question 22

Which of the following is not a pillar of sustainable development?

A) People
B) Place
C) Planet
D) Profit

Question 23

Which of the following is not true of corporate sustainability?

A) It holds a business accountable for its processes and impact on stakeholders
B) It consists of three "Triple Bottom Line" dimensions (social integrity, environmental responsibility, economic prosperity)
C) Identifies ways to innovatively create value and mitigate risks
D) Avoids long-term behavior that is environmentally wasteful and encourages short-term economic performance

Question 24

What are the dimensions that comprise the "Triple Bottom Line" of corporate sustainability?

A) Social integrity
B) Economic prosperity
C) Environmental responsibility
D) All of the above
E) A&B

Question 25

Which of the following is an objective of corporate social responsibility?

A) Engaging in business activities that positively impact the overall community
B) The first priority is to meet shareholders' interests
C) Engaging in business activities that solely benefit the enterprise
D) Economic gain and short-term productivity

Question 26

Which situation best provides an example of a company engaging in practices that fulfill the social integrity dimension?

A) A company purchases fabric from a factory where the workers' ages are questionable and they are underpaid and overworked
B) A company sells a product that is known to cause lead poisoning but does not recall the item or warn the public
C) A company uses free labor to manufacture a product but markets it to consumers as "fair trade"
D) A company issues safety regulations and procedures for its overseas operation to ensure better work and safety conditions

Question 27

Which situation best describes a company avoiding its environmental responsibility?

A) A biofuel company disposes of its waste into a nearby river basin, circumventing waste dumping laws and regulations
B) A diamond mining company ensures that its operations comply with local and global standards
C) An automaker progressively reduces its CO₂ emissions by adjusting its production process
D) A bottling plant utilizes disintegrating rings so that when consumers dispose of the rings, they decompose or dissolve

Question 28

Which of the following situations demonstrates a firm employing economically responsible practices

A) A company switches suppliers, decreasing overall costs, but product quality is compromised
B) A company switches manufacturers to reduce overall costs, which reduces consumer costs
C) A company acquires a distribution channel, which delays product delivery, resulting in customer dissatisfaction
D) A company merges with a corresponding company, resulting in the development of high-quality but exorbitantly priced products that most consumers cannot afford

Question 29

Which is not a responsibility held by global stakeholders?

A) Economic responsibility
B) Fiduciary responsibility
C) Legal responsibility
D) Philanthropic responsibility
E) Ethical responsibility

Question 30

Economic responsibility consists of

A) A firm's ability to reduce costs for the end consumer
B) A firm's ability to maximize and allocate resources
C) A firm's ability to generate a profit as well as pay wages and dividends to shareholders
D) A firm's ability to minimize workers' wages to maximize shareholder value

Question 31

Legal responsibility consists of

A) Following the rules and regulations of the countries in which they conduct business and operate
B) Following the rules and regulations of the home country since those rules supersede local directives
C) Creating a profit both inside and outside the legal parameters of the country
D) Hiring the appropriate legal counsel in the host country

Question 32

Which of the following is not an example of a company engaging in philanthropic responsibility?

A) A company coordinates with its local children's hospital to donate a percentage of sales to vital care and needs.
B) A company organizes an event in which it states that all donations will be used for a special cause but the donations are only used to cover the costs of the event
C) A company contributes money and volunteers to help in a restoration project at a communal library
D) A company sponsors afterschool and mentoring programs for middle school, high school, and college students

Question 33

Which of the following represents a company not acting in an ethically responsible manner?

A) A domestic company refuses to partner with a foreign firm because the organizational cultures and goals do not align
B) A domestic firm decides against a merger with a foreign entity because that entity is under investigation for tax evasion
C) A domestic firm publicly discloses the release of a dangerous and defective product in a foreign market and issues an immediate recall
D) Instead of reporting losses for the quarter, the domestic firm shifts its liabilities to foreign subsidiaries, reporting a profit instead

Question 34

Which of the following is not an ethical challenge associated with corporate sustainability and corporate social responsibility?

A) Applying the same moral standards to all countries across borders
B) Using the host country's values and norms when making moral judgments on companies' business practices
C) Creating your own ethical standards irrelevant to the home or host country and applying them whimsically
D) Using others' activities to measure morality and business activities

Question 35

Which scenario best describes that of an ethical absolutist or universalist approach?

A) Developed countries' moral standards dictate what practices are appropriate for a company that operates in the host country
B) A company is expected to follow a standard level of ethical responsibility regardless of the country it operates in
C) A company does not apply an internal moral standard but utilizes competitors' business practices in a country where it operates
D) A company uses host country values and practices even though they directly conflict with home country values and practices

Question 36

Which situation best illustrates the approach of the ethical relativist?

A) A company is expected to follow a standard level of ethical responsibility regardless of the country it operates in
B) A company does not apply an internal moral standard but utilizes business practices within the operation of the company
C) A company uses home-country values and practices even though they directly conflict with host-country values and practices
D) The host country's moral standards dictate what practices are appropriate for a company that operates in the host country

Question 37

Which example demonstrates the naïve immoralist perspective?

A) A mining company notices that permits are not required to start the extraction process but files for a permit regardless
B) A manufacturing plant follows home-country standards, limiting CO₂ emissions even though host-country standards do not limit CO₂ emissions
C) An oil company monitors a competitor's drilling practices and then adopts them upon entry into the market even though the practices lead to environmental degradation
D) A biofuel plant follows international energy conservation methods not practiced by the home or host country, substantially reducing waste

Question 38

Which of the following situations best illustrates an ethical dilemma?

A) Mislabeling a product to attract consumers and sell a product
B) Refusing to repatriate funds from overseas companies to avoid taxes
C) Dumping waste illegally to save on disposal costs
D) Placing an unsafe product on the market, knowing it will cause harm

Question 39

Which of the following is a component of an ethical algorithm that may allow lax environmental regulation in developing countries relative to developed countries?

A) Used to determine the unethical strategies firms implement
B) Moral reason permitted by relative level of economic development
C) Morally impermissible but results in high profits
D) Moral reason directly resulting in a violation of human rights

Question 40

Which of the following is not an optimal strategy used in the contingency model?

A) Education
B) Infiltration
C) Accommodation
D) Responsibility
)1 What is sustainability? What are the issues concerning sustainability?

Question 41

What is sustainable development? Describe the three pillars associated with it

Question 42

Explain corporate sustainability in detail.

Question 43

What responsibilities do firms have to global stakeholders and how do they fulfill them?

Question 44

Define and describe the ethical challenges that corporate sustainability and corporate social responsibility dictate?

Question 45

What is an ethical dilemma? What solution options are available for firms?