Chapter 1: Ethics Expectation Tutorial: Case application: The Bhopal Disaster

Business exists to serve the needs of shareholders & society (stakeholders). We will take a journey

Bhop al

& see whether the Union Carbide Corporation served the needs of shareholders & its stakeholders. Assignment for Group 1 What was the greatest loss of the Bhopal Disaster? A General Outlook

List the stakeholders of the Union Carbide Corporation (India) according to Primary & Secondary stakeholders & explain their stakes in the company. Did the management of the Union Carbide Corporation (India) respect the values & interests of the stakeholders? Were there conflicting interests between the management & the stakeholders? Did the management discharge their duties in a transparent & ethical manner? Should businesses respond to the needs of non-shareholders (even if they are illegal squatters)?

Factors affecting public expectation for business behavior

Assignment for Group 2 Environment concern: The disaster led to destruction of the environment, discuss the impact on the environment & ultimately on the life of the community. Do you think the management had undertaken due diligence during its operations? Moral Sensitivity: The issue about Fairness & Equity; were the Indian & American workers treated fairly or was there discrimination? Bad Judgments & Activists Stakeholders: Can you forgive the mistakes made by the management of Union Carbide Corporation (India)? What were their mistakes? Would you invest in Union Carbide Corporation? Would you consider yourself as an ethical investor?
Cheah chpt 1 bhopal

Assignment for Group 3 Economic & Competitive Pressures: In this case do you think the Indian Government felt pressured to increase the rice production to feed the huge Indian population & at the same time they do not want to import food/ rice from outside? So they had to ensure that the land was free from insects that could destroy the agricultural produce & the use of pesticide would make the land fertile. So they had allowed Union Carbide Corporation to set factories at Bhopal. Is that wrong? Is that unethical? Financial Scandals: Of course there were no financial malfeasance in this case but the fact that the management tried very hard to save costs was too much to swallow (too overly cost conscious (MAT OVER!). The management was not concerned at all with maintenance (corrosive pipes, low water pressure). Do you think the cost savings were for self interest or for the publics interest? Governance Failures: as you read the case you would notice that the activities undertaken by the management were not sufficient to protect the workers & the surrounding community. Refer to the paragraphs that talk about the Board of Directors (page 32), do you think there was a good corporate governance practiced at both the HQ & subsidiary level? There were reports & audits carried out by the HQ but why did they not detect the Red Flags? As Directors of the Union Carbide Corporation, what are their fiduciary duties? Assignment for Group 4 Accountability: Who do you think was responsible for the disaster? When & how should trade-offs between SAFETY & PROFIT be made? Synergy - Publicity: Do you think Multinational Companies get away with unethical behaviors in the 3rd world countries? The New Mandate for Business: Refer to page 10 & read what Milton Friedman had to say. So, when & how should trade-offs between SAFETY & PROFIT be made? What could have been done to avoid such recurrence (the Bhopal Disaster)?

THE END of Assignment. Lets Present

Cheah chpt 1 bhopal