MGT301 Business Ethics

MGT301 Business Ethics

MGT301 Business Ethics

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Read the following ethics scenarioand answer all of the questions that follow. Case1: Cadbury’suse of palm oil in chocolateEarly in 2009,Cadbury had just undergone a major restructuring exercise in New Zealand that resulted in 268 workers in Auckland and Dunedin losing their jobs and the firm’s Avondale factory closing. It was also clear that a major global recession was underway,and the company needed to make a strategic response and cut costs. It made two key decisions:1.To replace some cocoa butter in its products with cheaper palm oil.2.To reduce the size of 150g and 250g chocolate bars by about 20%of their weightbut to keep the price the same.The first of these decisions sparked a major public outcry mainly because of the environmental impact of growing palm oil (but also due to the perceived change in taste).The cultivation of palm oil,mainly in Indonesia and Malaysia, meant the destruction of rain forests which not only contributed to global warming but also destroyed the habitat of endangered species such as the orangutans.More than 3500 people signedup to a Facebook campaign aimed at persuading the company to remove palm oil. More importantly, people switched from buying Cadbury products to Whittakers, a locally owned New Zealand brand, and Nestle.Finally, in August 2009 Cadbury finally caved intopublic demand and announced that it would stop using palm oil in its chocolates, although it has taken the company several years to recover from this issue.Answer the following questionsImagine you are the Asia-PacificCadbury manager at the outset of 2009(prior to any decision being made)and you have to make decisions regarding cost cutting. You have the choice of cutting costs by introducing palm oil ormaking people redundant. You may also consider the ‘do nothing’ strategy which will inevitably affect shareholders’ return (note that shareholders include both corporate shareholders and individuals). 1.Assess the impact of the different options from the perspective of each main Cadbury stakeholder (note this means stakeholders in the broader sense and not just shareholders).2.Give an account of your ethical reasoning in reaching a decision in this situation and say which, if any, ethical theory your reasoning fits most closely with.3.How helpful were ethical theory and principles in helping you to reach adecision and what conclusions do you draw from this?

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