Task:
Case study 1: Railway Development Co
Read the case study and answer each question drawing on facts from the case and unit content of Business Ethics unit.
Railway Development Company (RDC) was considering two options for a new railway line connecting two towns in the country of Zeeland.
Route A involved cutting a channel through an area designated as being of special scientific importance because it was one of a very few suitable feeding grounds for a colony of endangered birds. The birds were considered to be an important part of the local environment with some potential influences on local ecosystems.
The alternative was Route B which would involve the compulsory purchase and destruction of Eddie Krul’s farm. Mr Krul was a vocal opponent of the Route B plan. He said that he had a right to stay on the land which had been owned by his family for four generations and which he had developed into a profitable farm. The farm employed a number of local people whose jobs would be lost if Route B went through the house and land. Mr Kurl threatened legal action against RDC if Route B was chosen.
An independent legal authority has determined that the compulsory purchase price of Mr Kurl’s farm would be $1 million if Route B was chosen. RDC considered this a material cost, over and above other land costs, because the projected net present value (NPV) of cash flows over a ten-year period would be $5 million if Route A were chosen. The NPV would be reduced to $4 million if Route B were chosen.
The local government authority had given both routes provisional planning permission and offered no opinion of which it preferred. It supported infrastructure projects such as the new railway line, believing that either route would attract new income and prosperity to the region. It took the view that as an experienced railway builder, RDC would know best which to choose and how to evaluate the two options. Because it was keen to attract the investment, it left the decision entirely to RDC. RDC selected Route A as the route to build the new line.
A local environmental group, ‘Save the Birds’, was outraged at the decision to choose Route A. It criticized RDC and also the local authority for ignoring the sustainability implications of the decision. It accused the company of profiting at the expense of the environment and threatened to use ‘direct action’ to disrupt the building of the line through the birds’ feeding ground if Route A went ahead.
Case questions
1.Identify at least five (5) stakeholders being impacted by the local government authority decision to build a new rail line and briefly discuss the ethical issues that impact on each of these stakeholders.
2.From your perspective, what communication and leadership styles are evidenced by the RDC decision making process as outlined in the case study?
3.Assume you were part of the decision-making committee at RDC. Which railway route would you have recommended and why? Critically present the pros and cons of your alternatives.
Case Study 2: Rameses International
Read the case study and answer each question related to the case drawing on facts from the case and unit content of Business Ethics unit.
Jeanette was recently appointed CEO of Ramses International, which is a long established, family-run export house specialising in buying manufactured goods from Western Europe and the USA for re-sale in Africa and Middle East. Jeanette was previously Marketing Director of one of the Ramses international’s biggest suppliers. She is the first CEO appointed from outside the family.
Ramses International had been very successful for many years, but has begun to suffer from increasing competition in its chosen markets, particularly from strong manufacturing companies expanding downstream to capture more from its suppliers.
Ramses had introduced a number of initiatives over the past three (3) years in order to try to respond to the challenges it has faced. These initiatives have included: seeking a wider range of products to re-sell from a boarder supply base (more suppliers); attempting to have closer collaborative agreements with major suppliers to minimise any potential conflict; and attempting to operate in more markets.
However, none of these initiatives has been particularly successful, and turnover has stagnated.
Jeanette has said that one of the problems which is affecting Ramses’ competitive position is that the underlying logic behind the initiatives appears to be finding ways of improving performance whilst maintaining the company’s existing business model and culture. However, Jeanette has argued that in order to respond to the changing environment, Ramses need to consider making some more fundamental changes to the company's vision and strategy.
Jeanette arranged a board meeting to discuss Ramses’ future strategies and its strategic management process. The response of board members to the planned meeting and pursuing strategic change has been positive and constructive. However, Jeanette has added the following note of caution: ‘We need to remember that senior management teams within companies can often be good at analysing their company’s position, and identifying potential strategic options available to it. However, they are often much less successful in actually implementing the chosen strategies’.
Case questions (all questions carry equal marks of 10 each)
1.As a board member for Rameses International, what would you identify as the key challenges being experienced by Jeanette as the CEO? Suggest at least four (4) strategies that the Rameses International executive team could pursue in order to make the company competitive again. Drawing on your learning from the unit, explain the benefits and disadvantages of each strategy.
2.Using evidence from the case study, explain which organizational culture you believe is being evidenced at Ramses International. Would you recommend changing the current organizational culture? Why or why not? Justify your recommendation using your learning from the unit to support your arguments.
