Corporate Social Responsibility: Balancing Environmental Interests and Business Concerns

5 min readJul 26, 2023

Case Study

Kirk, an Assistant Controller at a medium-sized manufacturing firm, is presented with a quandary over the firm’s environmental policy. During a financial statement summary meeting, Kirk learns that the firm’s new production plant may not fulfill industry waste treatment and disposal requirements. However, the President and other executives are dismissive of environmental concerns, preferring cost reductions over updating waste treatment facilities.

Relevant Facts

Kirk is being groomed for the post of Controller in the firm and has participated in significant corporate events such as financial statement summaries and meetings.
The firm is expanding its manufacturing operations, and at a discussion, concerns were expressed concerning waste treatment and disposal issues linked with the new factory.
Because of the probable rise in expenses per unit, several management, including the President and the chemical engineer, do not contemplate updating waste treatment facilities.
Kirk is concerned about the firm’s careless attitude toward the environment, but is unclear how to express his concerns owing to the politics at work.

Overarching Ethical Issues

The fundamental ethical problems in this case are with Kirk’s responsibility to act, how the firm’s and investors’ interests might be weighed against environmental interests, and what obligations the corporation has to future generations and society (Carroll, A. B. ,1999). Kirk, as an Assistant Controller, is responsible for sustaining the firm’s ethical standards and ensuring that the firm’s activities are consistent with corporate social responsibility (CSR) values. However, he must balance his ethical commitments with the realistic limits of the firm’s financial success and industry competitiveness. According to Shaw, W. H., & Barry, V. (2015), The firm’s and investors’ objectives in reducing costs and generating profits may collide with the firm’s environmental concerns and larger societal duties to future generations and people.

Stakeholders

Kirk: As an Assistant Controller, Kirk is responsible for prioritizing corporate social responsibility and advocating for ecologically sound operations.
Bob (President): Bob is in charge of the firm’s general management and has a vested interest in preserving profitability and cost reductions.
John (Chemist): John is in charge of the production process and may be worried about the price and practicality of updating waste treatment facilities.
Henry (Controller): Kirk’s supervisor, Henry, may be able to influence Kirk’s choice and advocate for cost savings.
Shareholders of the firm: The profitability and financial success of the firm are important to the investors.
Employees: The firm’s environmental policies may have an impact on employees’ health and well-being, as well as their job security (Werhane, P. H., & Freeman, R. E., 1999).

Possible Alternatives and Ethics from the Utilitarian Perspective

Alternative 1

Upgrade waste treatment facilities: Kirk might recommend upgrading the firm’s waste treatment facilities to enable adequate waste treatment and disposal from the new manufacturing unit. This would be consistent with the notion of corporate social responsibility by reducing possible environmental and public health risk.

Ethical consideration: This solution aligns with the Utilitarian perspective of promoting general well-being because it attempts to protect the environment and public health while also benefiting numerous stakeholders (Freeman, R. E., 2010).

Alternative 2

Seek low-cost waste treatment: Kirk might do research and suggest low-cost trash treatment methods that balance environmental concerns with economical restrictions. This might include investigating novel and sustainable waste treatment technologies, negotiating better price with waste treatment providers, or researching options for trash recycling or repurposing.

Ethical consideration: This approach strives to combine environmental concerns with financial limits, with the goal of maximizing general well-being, harmonizing with Utilitarian ethics by attempting to provide the greatest benefit for the largest number of people (Werhane, P. H., & Freeman, R. E., 1999).

Practical Constraints

Financial constraints: Due to potential increasing costs per unit and the impact on financial performance, the corporation may be unwilling to engage in updating waste treatment facilities.
Competitive Constraints: Cost concerns are crucial to sustaining competitiveness in a highly competitive market.
Political constraints: Kirk may encounter difficulties expressing his views owing to workplace politics and the potential consequences for his career advancement.
Organizational culture: The firm’s response to environmental problems may be casual, and Kirk may meet opposition in advocating for changes in the firm’s approach.

Recommendation

The following suggestions are made for Kirk based on the ethical difficulties and practical constraints identified above:

Internal advocacy: Kirk should utilize his position as Assistant Controller to engage in internal advocacy by expressing his worries about the firm’s casual attitude toward the environment and the need to promote CSR values. He should acquire appropriate facts and evidence to support his ideas and deliver them in a professional and polite manner to the key stakeholders, including Bob (the President) and John (the chemical engineer). Kirk should also try to engage with Henry (his employer) to get support and create a change coalition within the organization.
Kirk should investigate other ideas that combine environmental concerns with practical limits. For example, he may do research and develop cost-effective waste treatment and disposal methods that are both environmentally friendly and financially sustainable for the organization. Kirk should also think about using the help of professionals, such as environmental consultants, to give feedback and assistance on alternative solutions.
Consider external engagement: If internal lobbying fails to produce results, Kirk may consider engaging in external advocacy. He might express his concerns to the appropriate regulatory authorities or environmental agencies, or he could seek advice from external CSR organizations or industry associations (Carroll, A. B., 1999). Kirk should also look for chances to communicate with customers and suppliers to learn about their thoughts on environmental policies and how they could effect the firm’s commercial relationship.

Conclusion

In conclusion, Kirk is confronted with an ethical quandary about the company’s approach to waste treatment and disposal issues related with a new manufacturing plant. He must strike a balance between his ethical responsibilities and the practical restrictions of the company’s financial performance and competitiveness. Kirk can adopt a principled approach to tackling the issue while acknowledging practical restrictions by engaging in internal advocacy, examining alternate solutions, contemplating external participation, and reviewing his personal beliefs and goals. Finally, Kirk should carefully weigh the risks and rewards of many possibilities before making a decision that is consistent with his personal beliefs as well as the larger concepts of corporate social responsibility.

References

Carroll, A. B. (1999). Corporate social responsibility: Evolution of a definitional construct. Business & Society, 38(3), 268–295.

Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press.

Shaw, W. H., & Barry, V. (2015). Moral issues in business. Cengage Learning. Retrieved from https://books.google.co.jp/books/about/Moral_Issues_in_Business

Werhane, P. H., & Freeman, R. E. (1999). Business ethics: The state of the art. International Journal of Management Reviews, 1(1), 1–16.

This article is written based on University of The People Business Law, Ethics, and Social Responsibility (BUS 5115) written assignment by Fristy Tania in April 2023