Sustainable Management
ORIGINAL QUESTION
You are required to choose 2 from 4 scenarios provided to you, and write a 1500 word essay style response to each question relating to the issues contained in each of them [3000 words in total].
Each scenario is worth 50% of the overall mark.
The assessment is designed to evaluate your knowledge and skills in the subjects covered in the module. In the assessment, you need to spot key words that will guide you as to what is expected in the question. As such the questions will invite the following types of response:
Definitions: These will ask you to show that you have learned some concepts, by setting out their precise meanings. Such questions need to be complemented by some further analysis. Keywords for these types of questions are: describe, identify, define, name, examine, distinguish between, compare, provide examples, summarise.
Evaluate: This is designed to test your reasoning of cause and effect. You need to offer structured and coherent explanations. Keywords are: Interpret, explain, discuss, what conditions influence, what are the consequences, what are the implications of.
Judgement: This requires that you make a judgement, perhaps of a policy or of a course of action. Keywords: evaluate, critically examine, assess, do you agree that.
Advice: Some questions might ask your advice in particular situations. Your advice needs to be based on policy, good practice, principles and evidence of actions that can be effective. Keywords: Design, create, recommend, advice.
Critique: Many questions will include the word critically, this means that you expect to look at least two points of view, offering a critique of each view and your judgement. Key words: critically analyse, critically consider.
.

Sustainable Management Futures Scenarios July 2014

Scenario 1
Some years ago, a large German chemical firm, BASF, decided to follow the lead of many other European firms and build a factory in the United States. BASF needed land; lots of it (1,800 acres), and inexpensive labour pool, almost 5 million gallons of fresh water every day, a surrounding area free of import taxes, and a nearby railway and ocean port. The spot the company finally picked seemed perfect, an area near the coast of South Carolina called Beaufort. It purchased 1,800 acres.
South Carolina and Beaufort County were pleased with BASF’s decision. The surrounding area, from which the company would pick its workers, was an economically depressed area and the per capita income stood well below the national average. Jobs of any kind were desperately needed. Even the Governor of South Carolina and his staff were eager for BASF to build in South Carolina, and although BASF had not yet finalized its exact production plans the state Pollution Central Authority saw no problems with meeting the State pollution laws. BASF itself said that although it would dump chemical by-products into the local Collection River, it planned not to lower the river’s quality.

But trouble started immediately. To see why, one needs to know that Beaufort County is the home of the internationally famous resort area called Hilton Head. Hilton Head attracts thousands of vacationers every year most of them with plenty of money and its developers were worried that the scenic splendour of the area might be marred by the air and water pollution. Especially concerned about water pollution, resort developers charged that the proposed chemical plant would pollute the Collection River. They argued that BASF plants in Germany had polluted the Rhine and, in Belgium, the pollution control was allocated only one million dollars.
The citizens of Beaufort County, in contrast to the Hilton Head Developers, welcomed BASF. They presented the company with a petition bearing over 7,000 signatures endorsing the new plant. As one local business commented, I would say 80 percent of the people in Beaufort County are in favour of BASF. Those who aren’t rich.
The manager of BASF’s US operations was clearly confronted by an economic and moral dilemma. He knew that preventing massive pollution was virtually impossible and, in any case, outrageously expensive, the eagerness of South Carolina officials for new industry suggested that pollution standards might be relaxed for BASF. If it decided to go ahead and build, was the company to push for the maximum pollution control it could get away with under the law? Such a policy might maximize corporate profits and the financial interests of the shareholders, while at the same time it would lower the aesthetic quality of the environment. It might make jobs available to Beaufort County while ignoring the resort industry and the enjoyment of vacationers. Moreover, the long-term effects of dumping chemicals were hard to predict, but past experiences did not give manager a feeling of optimism. Pollution seemed to be not only a business issue, but a moral one.
Task
Evaluate the advantages and disadvantages of consequentialist and virtue ethics (Fisher, Lovell, and Valero-Silva, Chapter 3). Use these approaches to evaluate how they could be used by the manager in making a decision as to whether BASF should go ahead with building the factory at Beaufort Country Park.
(1500 words)
You work for a large finance organisation that operates in the global markets. In order to survive they have decided to increase business by extending their services to those who are not in a position to pay back loans, ‘sub-prime clients’ also known as ‘bad risks’. Nevertheless they are being offered them because your organisation has seen an opportunity to charge higher interest rates for loans taken out by these clients because they are seen as bad risks (7.5% APR as opposed to 1.5% that is normally charged by your organisation) but who are afraid of going to loan sharks who will charge 50% APR.
You have been asked to be a financial advisor to those seeking high interest loans when they contact your organisation to set up a loan they do this via a call centre and the loans can be set up with a ‘no questions asked’ 5 minute interview
Your organisation has told you it is strict company policy not to tell clients taking out these loans that if they default it will be sold onto a debt collection company who will pursue them for any outstanding amounts at 25% APR.
Your organisation has also told you not to offer extended re-payment periods and if clients ask about this you should tell them ‘we will cross this bridge when we come to it repaying £X amount per month should be no problem even on your limited and fixed income lots of people do’.
If a client asks why they are being charged a higher interest rate you are to reply that your organisation says they are justified in charging 7.5% APR because they see it as ‘doing a social good’ by lending to those who need money but cannot get it at cheaper interest rates, and also keeping them from the clutches of loan sharks you are in fact here to help doing them a favour’.
A client contacts you who has taken out such a loan and is now finding it difficult to make re-payments. They tell you they are threatening to go to a loan shark because of the difficulties they now find themselves in.
You have to follow company procedure when dealing with clients by not allowing them to default on loans or make arrangements to make repayments over a longer period of time in order to spread their outstanding debt because if you do not you will be sacked. You must not tell them about the debt collection company either if they want to default.
Task
Using the concept of corporate citizenship (Fisher, Lovell, and Valero-Silva (2013:336-338) apply and evaluate to what extent it can be applied for dealing with the issues described in the Scenario 2.
(1500 words)

Scenario 3
Read the extract by Erika Watson taken from the The Guardian (18 March 2012) Quotas aren’t the best way to get more women into boardrooms

A gender-equality policy that focuses on women at the top is unsustainable when most women’s prospects are shrinking. The European justice commissioner is proposing mandatory quotas for women in boardrooms if voluntary measures fail. Few people disagree these days with the need for more women at the top of business and banking. Three-quarters of people across Europe say they are in favour of laws to ensure gender balanced boards. And perhaps buoyed by those findings, the European justice commissioner, Viviane Redding, is proposing mandatory quotas if a voluntary approach doesn’t speed up.In the UK this is set against a context of women losing jobs at a higher rate than men, and over 2 million low- to middle-income families facing tax credit cuts in this week’s budget. Strange times indeed: when affirmative action is on the cards for those at the top, while equality is reined back for everyone else.

Nevertheless, there are very good reasons for introducing boardroom gender quotas. There are stacks of research that confirm that gender diversity on boards results in better corporate performance on every measure, including finance. And there’s widespread agreement too that male-dominated cultures in the top echelons of banking and business created ghettos of groupthink and excessive risk taking. Those narrow cultures were at the heart of what went wrong in the global financial crisis. The Swedish prime minister recently said: A male atmosphere creates more risk and a greater risk of corruption.

Quotas have gradually increased female representation on boards in Norway from 9% in 2003 to over 40% today. And similar approaches are now being rolled out in other European countries, including Belgium, France, Italy, the Netherlands and Spain. The issue is being seriously debated in Germany. Legislation varies, but there’s a broadly common model of gradually increasing targets, from 20% up to 40%. Corporate Britain, fairly united against quotas, has heaved a sigh of relief this week. Voluntary efforts in the last year have resulted in a new record high for female representation on the boards of the UK’s 100 largest listed companies. The proportion has gone up from 12.5% last year to 15.6% this year. Experts say that at that level of momentum, we could reach 30% in four years. We’ll see. If the increase is not maintained, then, as David Cameron said recently, the case for quotas may be unavoidable.

But while corporate Britain has pulled out the stops to get female non-executive directors on to its boards, the proportion of women executive directors (female employees who sit on the board) has crawled along from just 5.5% to 6.6%. Promotion prospects come at just the time women start to have families. With expensive childcare, and few meaningful family-friendly workplaces, few of those talented women last long enough to make it to the top. If quotas are to work in the UK, we may need to borrow Norway’s childcare system as well. As it is, childcare tax credits are being cut for around 500,000 families in a few weeks.And quotas won’t work if they reflect and reinforce the growing chasm between top and bottom earners in the UK today. The pay gap between the highest and lowest earners has reached an all-time high. In the last year the pay of the lowest earners stood still or dropped, while the pay of directors and chief executives increased by 15%. It may be impossible to justify a gender-equality policy that focuses on women at the top at the same time as the position and prospects of most working women are shrinking. If we’re to change the culture on corporate boards, quotas may be the worst option we have, except for all the others. But even then, they need to go hand-in-hand with policies that support equal opportunities at work, at all levels.

Task
To what extent do you agree with Viviane Redding, who is proposing mandatory quotas for women in the boardroom if a voluntary approach is not adopted by businesses doesn’t speed up? Propose an action plan for business to follow in order to encourage women to break through the glass ceiling.
(1500 words)
Scenario 4
Read the following extract from Business Ethics and Values by Fisher, Lovell, and Valero-Silva (2013:414):
Societies and countries may differ in their business ethics and values. Any differences may be internal to societies or countries or between them. Different countries may have, in high ethics established within their religion, philosophical traditions an literature, different ideals about the conduct of business and organisational life. Cultural tradition in one place might see business growth and profitability as an end in itself; in other place economic ends might be seen as subordinate to other goals. Within a country or society there may be competing sets of values concerning business and management. Within Muslim countries, for example, there may be differences between modernizers, who want to work to the values of global business, and traditionalists, who may wish to apply Islamic values to business practices. Even if countries and societies share the same values they may vary in the degree with which they practise the. While two countries might, at a formal level, regard bribery as immoral, one country might conduct its business in line with this standard but the second country might not. There may be differences with a country and society between the values embodies in its high traditions and those values adopted in everyday life.
Task
Using the contingency approach to cultural values (Fisher, Lovell, and Valero-Silva, 2013:432) evaluate, using appropriate examples, how this can reconcile cultural differences when doing business.