Introduction
When examining the potential avenues of approach that the company can pursue regarding its production of lead additives the concept of corporate social responsibility must first be taken into consideration before any further discussion is conducted.
Corporate social responsibility (CSR) is a form of internal self-regulation by companies which is integrated into business models to ensure that they comply to a certain degree of ethical standards, business norms and laws when conducting methods of operations (i.e. manufacturing, consulting, provision of services etc.).
In other words it is a way in which a company keeps its actions in check due to the possible ramifications noncompliance to ethical standards would have on the perceived image of the company by the general public.
Social Awareness on Environmental Issues
What must be understood is that based on the work of Shrivastava (2000) it can be seen that public opinion plays a crucial role in creating product patronage with corporations that utilize ethical methods of operation in line with CSR often gaining positive public feedback which translates into greater product patronage and sales (Shrivastava, 2000).
In fact it can be seen that as society takes into account the ramifications of environmental degradation caused by unethical corporate practices this encourages the behavior of patronizing manufacturing companies that incorporate CSR into their business models due to their perception that by doing so they are in effect aiding the environment (Shrivastava, 2000).
When taking such views into consideration it can be seen that the best avenue of approach that the company can pursue is one where it takes into consideration the social and environmental impact of its production of lead additives and whether it should continue production in light of clear violations of CSR which would not endear it to the general public.
In fact it is obvious that should the company continue along this particular method of production it may eventually alienate itself from public product patronage which would spell the company’s eventual decline due to lack of sales.
Effect on Developing Countries
On the other hand the company also has a distinct market responsibility to various developing countries due to its market position as a supplier of 90% of the lead additives that go into gasoline. Should the company scale back it production of lead additives and eventually stop producing them all together this could have massive negative ramifications for the economies of several developing countries that are dependent on these additives.
Furthermore it can be seen that entry of other players into lead additive manufacturing is not feasible within the short term due to costs related to factory construction, creating specialized equipment for production as well as sourcing particular chemicals and as such should another company attempt to fill in the gap left behind it would find itself hard pressed to even begin and as such an alternate supplier for developing countries would not be possible for some time.
It must also be taken into consideration that in the case of stopping production there are both predictable and unpredictable outcomes. The predictable outcome is the resulting financial contraction that the company will certainly experience once production is stopped however this would result in a better public image towards the general public.
The unpredictable outcome on the other hand is a cause for concern since it is unknown whether developing countries can adopt fast enough once supplies bottom out or if news of production being halted would result in sudden increases in domestic prices in those countries due to higher fuel costs.
What must be understood is that the company also has an ethical responsibility towards its consumers in developing countries by virtue of its production position. If the company were to give in to the demands of the environmental groups and stop production and the result is economic turmoil in those developing countries the company would be ethically liable for bringing about such an outcome.
The last deciding factor in helping to come up with an effective resolution is the fact that there is an 8% annual decline in pounds of lead additives produced. This means that given enough time production will naturally scale back as demand decreases resulting into production stopping all together.
Proposed Method of Resolution
Taking such factors into consideration it would be advisable for the company to continue along its course of producing lead additives due to the fact that by virtue of its market position it has to produce such a product due to the possible negative ramifications that may occur to developing countries should it stop production.
Not only that since production is reduced by a certain percentage each year there will eventually come a point in time when production will naturally scale itself back without undue negative financial results for the company. Furthermore it must be noted that the company itself is more production oriented than market oriented and as such does not normally interact directly with individual consumers.
Taking this into consideration the negative public image generated through continued production can be resolved in the future through a massive rebranding campaign where the name of the company is changed so as to create a different market perspective by consumers (Stuart & Muzellec, 2004).
Such tactics have been used in the past by various companies that have experienced negative public reactions and their rebranding efforts have proven to be generally successful in casting off the negative image attached to them (Stuart & Muzellec, 2004).
Reference List
Shrivastava, P. (2000). Ecocentering strategic management. Ruffin Series in Business Ethics, 23 – 43.
Stuart, H., & Muzellec, L. (2004). Corporate makeovers: Can a hyena be rebranded?Journal of Brand Management, 11(6), 472-482. Retrieved from EBSCOhost.