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evaluate best practices for utilizing groups and work teams in organization.

Case Information:

Of the billions of tons of carbon let loose into the world’s atmosphere each year, China is responsible for 21 percent, mostly due to its growth in manufacturing. And due to the billions of tons of wastewater and sewage released into rivers and lakes by Chinese chemical firms every year, 300 million of its citizens do not have clean drinking water. Clearly, these ethical breaches represent the failure not of one individual but of scores of teams: to be exact, top management teams in organizations throughout the country. Does that mean the leaders of China’s companies are all unethical? Surely not.

To increase corporate social responsibility (CSR), we need to understand the team dynamics that lead to unethical decision making. First, we examine the context. As a major emerging country, China witnessed unprecedented growth in industry that has brought opportunities for corporate profits, better salaries, and better access to services for its citizens. Millions have been able to pull themselves and their families out of poverty. Few would argue that providing jobs and services isn’t a highly ethical pursuit. However, top management teams now face pressure to sustain growth at any cost. The top management team of Rongping Chemical Company made the tragic decision to cut costs and increase profits by dumping untreated chlorine into rivers, raising the level of chromium-6—a tasteless, odorless compound that causes ulcers and cancers—to over 20 times national standards. Other organizations, like Luliang Chemical Company, have done the same, endangering the health of the same citizens it helps with jobs and opportunities.

Some observers have been shocked that top management teams in a country with collectivist values, which stress a group-oriented outlook, would make decisions that don’t consider everyone affected by them. One recent study indicated that the problem is competing ethical principles: duty to others v. duty to society. As management teams faced financial dissatisfaction about their firm’s performance, environmental ethics and CSR actions decreased, suggesting the teams were feeling pressure from their organization’s stakeholders and becoming less concerned about the environment. They may also have rationalized that providing jobs was for the greater societal good and believed that violating stakeholder expectations would cost them their own place on the management team. However, the study found that on an individual level, when a person’s sense of collectivist values increased, environmental ethics also increased, suggesting that the top managers did favor CSR initiatives, but other concerns predominated in the team settings. We may conclude that these teams are likely hindering the progress of environmental awareness. When teams feel pressured to meet certain (sometimes narrow) metrics, there may be more unethical team decisions than individual members would make on their own.

weave the answers to these questions in the body of your analysis of the case study above. Caveat: Do not limit your analysis to simply the answers to these questions. Have strong ties to your readings and outside research

• Do you think you could be convinced to let your organization dump chemicals such as chromium-6 into the water supply? Why or why not?
• Why might top management teams be more likely to make unethical decisions than their individual members would make?
• The cases of Rongping and Luliang are far from isolated incidents. You may remember the case of Pacific Gas & Electric (PG&E), which dumped chromium-6 into the water supply in Hinckley, California, as recounted in the movie Erin Brockovich. That case resulted in a $333 million award, the largest settlement ever in a direct-action lawsuit, to help the town’s 2,000 residents. In contrast, when 1,721 villagers brought suit against Rongping (more plaintiffs than ever in China, to date), the court ordered the company to pay a total compensation of $105,000 for damage to the land. And the Chinese environmental group Friends of Nature filed the country’s first-ever public-interest lawsuit, which shut down Rongping’s plant in a village, but did not offer monetary restitution for the villagers. How might these outcomes affect the ethical decisions of top management teams in the future?

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Answer 1

1. Corporate Social Responsibility or CSR in general, refers to the sense of morality and ethical responsibility that the profit making companies must have, for the betterment as well as upliftment of the overall society. The basic objective of social responsibilities for a company is to take responsibility for the sustenance and ecology of the society and leave a positive impact in the society, through its initiatives and business processes.

I would not be convinced to let my organization dump chemicals like chromium-6 into the water supply. This is so because it will be detrimental for the overall society, in which my family, my company as well as myself are integral part of. If the conditions of the society degrade, the life of my family and me, will get endangered. Also my company will not be able to sustain its business in such a scenario. It is very cleverly said that “What you give is what you get”. What we give to the society is what the society will give back to us. Hence we must be socially responsive to facilitate our own living in this world.

2. Carroll’s CSR Pyramid is used to exhibit the responsibility of a company in terms of CSR.

• Philanthropic responsibilities:
  • This aspect requires the company to be a good corporate citizen
  • The company must consider it as a responsibility to give back to the society
  • Example: Charitable donations
• Legal responsibilities:
  • This requires the company to be lawful
  • The company must keep a tab on legal requirements of the region in all its business processes
  • Example: Minimum basic work conditions of workers
• Ethical responsibilities
  • The company must act ethically as well as morally
  • The company must try to be ethical in all its business processes
  • Example: Relationship with vendors and suppliers
• Economic responsibilities
  • This responsibility requires the company to make profits
  • Every business process of the company must be profit oriented

The basic tussle between the different responsibilities of a company is that which responsibility of the company must be given more priority and more capital. It is the responsibility of the management to manage all the responsibilities effectively. But sometimes the management teams need to take hard decisions to facilitate business. The management teams ignore their philanthropic responsibilities while performing the economic responsibilities. An individual member may become hesitant in taking such decisions, but the management team as a whole, works with the prime objective of satisfying the interests of the stakeholders of business and increasing overall profitability of the company. While doing so, the philanthropic and social responsibilities of business may get ignored.