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ETHICAL DILEMMAS BUSINESS STRATEGYPRESENTED BY:Akash Khandelwal – 11070Aayush Kr. Doshi – 11084Kintu Shah – 11092Tessy John – 11121Vikas Agrawal – 11126Monika Rao – 11099
CASE 1: CONFLICTINGOBJECTIVESSTRATEGIC CHOICES Shutting the mine Upgradation Continuing the work without any changesSTAKEHOLDERS Local population Government of Namibia Company
IMPACT OF STRATEGIC CHOICES On local population: Unemployment Reduction of per capita income and thus degradation of standard of living Mining hazards leading to risk of health and safety On Government of Namibia: Political Instability Fall in GDP Providing facilities in case of a mining hazard National unemployement Stunted development of the economy On the Company: Reputation of the parent company Fall in share price Loss of business in Namibia In case of upgradation, increased cost and unviability of operations.
STRATEGY INTO ACTION The mine should be upgraded. Shutting the mine impacts the government and the company adversely. Increased loss from complete shut down of business in Namibia. Upgradation involves short term high fixed cost which can be spread with increased operations. Safety of operations necessary to maintain reputation of the company and instill trust in employees. Continuation of mining business important to support the 1000+ families. Apart from only profits and viability of business, company must also look at its responsibility towards various stakeholders. Improved technology could be used. Upgradation and safety checks will be beneficial for long term business and open various opportunities not only in Namibia but also surrounding areas. To conduct business, vital to win trust and support of the government and citizens of that country.
CASE 2: PERFORMANCE DATASTRATEGIC CHOICES Allow the supervisor to fabricate the data Stick to the data collected and present what has been observedSTAKEHOLDER No stakeholder involved except for yourself and the deputy.
IMPACT OF STRATEGIC CHOICES Presenting true data may be perceived as under performance or not meeting targets Fudging data may give a rosy picture but will be detected at some point It may also affect some strategic measures that could be taken at the managerial level, in case the targets are not met.STRATEGY INTO ACTION Some data could be altered but within reasonable limits and should be justifiable. Even if the performance is below the set target, mention in the report the reason for the same and suggestions of what can be done to improve this in the next quarter. Also mention if any support is required and when can the target be achieved.
CASE 3: BRIBERYSTRATEGIC CHOICES Bribe the Local 4 of the electrician’s union Try securing approval on your own File a complain to the administrative authorities against the illegal demands of the unionSTAKEHOLDERS Company The government Electrician’s Union
IMPACT OF STRATEGIC CHOICES Risk of prolonged commencement of operations Compliance to illegal demands amounts to encouraging such activities Bad terms with influential local authorities could impact important decisions in the future $12000 is a small sum compared to the spend estimated. It can be easily spent and the problems done away with. This also ensures support of local authorities and will take care of future hindrances in operations or compliance. Failed operations will impact your credibility in the company since it is a make or break for the company’s operations in the USA Trying to secure approval on your own is a mammoth task and cannot be completed without the assistance of local authorities. Filing of a complaint opens up legal procedures resulting in sunk costs and does not assure approval.
STRATEGY INTO ACTION A complaint should be filed against the local authorities. In this way, approval for business will be obtained on legal grounds. Compliance with unreasonable demands amounts to acceptance and this could be an issue in the future if discovered by the company’s management in UK as the spend of $12000 will not be disclosed. If the case is won, support of the administrative authorities and legal system can be garnered for conducting business. In a country, where laws are well in place and the legal system strong enough to provide justice, the route of bribery should not be adopted. The trade off is between short term gains and long term losses of conducting business in that country. One should take a risk to fight out the situation as the business has been set up for long term survival. Losing the case means there are loopholes in the legal system and such issues will always exist. Thus, the decision should be reconsidered if business is to be continued in that country. Inform the company management of the influence of local 4
CASE 4: RATIONINGSTRATEGIC CHOICES Save the German tourist and the tribe leader Save both the children Save the tourist and one child Save the tribe leader and one childSTAKEHOLDERS The tribe to whom the leader belongs German government Parents of the two children
IMPACT OF STRATEGIC CHOICES Saving the German tourist and the tribe leader will mean that the children are unimportant and hence their safety is being ignored. Saving both the children means the tribe leader who is relatively important and the tourist who is a guest to the country have been ignored. In any case not saving the tribe leader could lead to tribal unrest in that region and the situation could be out of control. If the German tourist is not saved, it will impact tourism in the country which is an important contributor to GDP and moreover spoil relations of Nigeria with European Nations. When choosing one would lead to rejecting the other, the choices have to be made wisely such that the reason why one is chosen over the other is justifiable.
STRATEGY INTO ACTION One child and the German tourist should be saved. The leader can be reappointed and since it is only a local tribe, the unrest can be handled by the local protective forces. Saving the foreign tourist would instill trust in the government’s responsibility towards their guests.