Business 601: Business Analysis > Stakeholders, Ethics, and CSR
Assignment: A.2 Ethics, Stakeholder & CSR Project Memorandum – Individual
Length:
2000 words/8 pages (12 pt. font; double line spacing, standard margins per APA
Style Guide); MSWord document; Cover page & List of References page required
but not counted as part of the word count. Citation required including in-text
citation (APA).
Value:
35% of Final Grade, Penalty for Late Memos apply, Penalty for exceeding the
word limit applies (1/100 per additional 100 words).
Due Date:
Sunday, February 23, at 2300 Hours Pacific Time
Janet Peters is the majority owner and CEO of Sitka Home Equities Inc (SHE). Ms. Peters is wellknown in the British Columbia business community. For over three generations her family
owned and operated several fast-food restaurants, including all the A&W franchises on
Vancouver Island. She started out flipping burgers but rose rapidly through the ranks to
become CEO. When Janet inherited the family businesses, she realized that most of the
businesses the family operated had reached the mature stage of the business cycle and that
meant that opportunities for growth were constrained. She immediately set out to diversify
the group of companies. She witnessed tremendous growth on Vancouver Island during the
past 10 years and sought to take advantage of the ever-expanding commercial real estate
market. And thus, SHE Inc was born. She soon discovered that when she developed parcels of
land and constructed commercial buildings that were anchored by one of her many successful
franchises the commercial value of the property increased and sold well above average
commercial real estate prices in the Central Vancouver Island area. By taking advantage of the
opportunity this presented Janet Peters had become one of the richest persons in British
Columbia. Another interesting fact is that Janet is an Indigenous person whose family had
migrated from the Alberta prairies three generations earlier.
Now that Ms. Peters is nearing retirement, she wishes to leave a legacy for the next generation
of her family by building a high-tech state of the art light industrial park in a profitable location
on Vancouver Island. She hired a consulting firm to conduct a feasibility study and decided the
most profitable place to locate the industrial park was midway between Duncan and Nanaimo,
on the site of a former dairy farm, along the only major highway that ran along the Island. The
location is also close to the airport and major ports in and out of the Island, and near other
feeder highways allowing access up and down the supply chain. Logistically, this was an ideal
location for the industrial park. Construction costs would be minimal as much of the off-site
infrastructure was in place, and there was ready access for bringing in the equipment and
materials SHE Inc. needed to build the on-site infrastructure and buildings. Future tenants
would profit hugely from the location and the great access to markets from the location. Given
the lower costs of development the company could allocate more of the start-up budget to
technology that would modernize the warehousing and logistics industry on Vancouver Island.
And, although Janet does not need additional financing, she decided to mitigate financial risk by
looking for equity partners. The potential for profit was great in the medium and long term.
Some challenges existed, however. The now defunct dairy operation that once operated on the
location was not for sale. The farm had been established by the first settlors to the area and
descendants of the original family had plans of their own for the land. One of the reasons the
farm was not sustainable was because there was not enough water in the summer for the
animals to drink and to also raise enough food for the cows to eat during the winters. This was
due to climate change. The total number of cows the land and existing water supply could
support was limited to the point that farming was no longer a profitable endeavour. Over the
years the farm family had developed a close relationship with their neighbouring First Nation –
Stz’min’us First Nation (SFN). SFN was looking to recover the farmland since it was originally
taken from them when the family’s ancestors had first arrived on the Island. The family
acknowledged this and wished to return the land to SFN as part of a treaty settlement between
British Columbia and SFN. The family even agreed to sell back the land at a price that was much
lower than the appraised value – an altruistic gesture acknowledging the family’s appreciation
of the fact that the land had supported and enriched the family over the years and that it was
now appropriate to give some of that back.
Stz’min’us First Nation had plans for the land once the treaty settlement is ratified. They
wanted to use part of the land for a housing development to address the lack of housing they
currently were experiencing. In their planning they also allocated some of the land for a new
school, a medical centre, and an Elders’ Lodge. They also wished to establish a light industrial
park that would generate revenue for the First Nation. So, they were also looking at real estate
development that would include development for social and commercial purposes but on a
much smaller scale than what SHE Inc. had in mind.
Both Ms. Peter’s SHE Inc. proposal and the SFN development project would require water.
Although there was not a large supply of water on the farmland itself, SFN was located on a
large aquifer of pristine, even potable water and could use sustainable amounts of that water
to supply their projects on the adjacent farming land. Ms. Peters did not have access on the
property to the water supply she would need but she had plans for this contingency.
She called the family together for a dinner at her estate on Salt Spring Island where she
announced her ambitious plans. She informed the Peters family of her plan, including the
contingency plan for obtaining the water she would need for the commercial development.
They were shocked to hear that she planned to get water by conducting lateral drilling into the
aquifer and taking the water from underneath Stz’minus First Nation. The younger family
members (all millennials) were appalled and cautioned her against going ahead with the
development without consideration for the environment and for the potential impacts on the
local communities, including the Indigenous communities that are in proximity and within
whose traditional territory the development would be located according to the proposal. In
fact, they knew that the old farm was being claimed in treaty negotiations with Canada and
British Columbia by the Stz’min’us First Nation. The farmland was also the subject of an
Aboriginal rights and title lawsuit lead by the Cowichan Nation Alliance. Christine, her daughter
who recently graduated from the MBA program at University Canada West, alerted Janet to a
slide show highlighting two stakeholder approaches that she saw at the last business
convention that she attended. Christine indicated that there could be some lessons learned
from the experiences of both Platinex Inc. and DeBeers in their dealings with stakeholders. The
PowerPoint deck was authored by Peter Siebenmorgen.
In addition to consideration for the Indigenous stakeholders Christine also pointed out that
Janet and the company ought to think about the diverse and pluralistic community that had
developed on the Island in the last few years. There were many new immigrants with diverse
cultural backgrounds in the community. Christine noted that many of the graduates from the
local Universities were women with quality skills who could become part of a productive labour
force bringing Janet’s dreams to fruition. Her point was that Ms. Peters would do well to
integrate these important stakeholders into SHE’s strategic planning. Janet’s partner in life and
in business, Marie Contraire, also cautioned on the potential for financial loss to the company
and to the family legacy if she failed to mitigate risk. And her son Joe, a lawyer, advised her
that any number of stakeholders could influence her plans. Furthermore, Joe indicated that
there would be several issues that should be contemplated and that the Green Coalition Group
would be concerned about marine and land environmental degradation not just from the
development but by the increased traffic caused by it. The farm had streams on it that were
home to marine grasses that were used by schools of fish to spawn and regenerate. The land
was also home to several birds and animals that were on the endangered species list. An
environmental assessment certificate would need to be obtained from Canadian and British
Columbia environmental ministries. The Supreme White Nationalist Organization, a disruptive
but influential right-wing group in the area, could be a problem for the project as well since
they controlled the trade unions in the area, including the powerful Builders Trade Union.
Janet’s other son, Jaxon said that the whole stakeholder thing was overrated and that all the
stakeholders would see the benefits of building the industrial park, including jobs and training
and economic growth for all stakeholders, and most importantly, profits for the shareholders.
“It is our right,“ he said, “we have the means to modernize the warehousing and logistics
businesses on Vancouver Island and this would benefit all stakeholders, whoever they might
be!”
Ms. Peters had become successful in part by listening to her shareholders, and the Peters family
members and her new partner Marie, were her nearest and dearest shareholders. But she was
also a businessperson who was used to getting things done on a handshake and by consulting
her network of business associates whom she often met locally at the Chamber of Commerce
Social Club. She knew that the local Member of the Legislative Assembly (MLA) of British
Columbia was also the Minister of Land and Marine Resources, and for a bit of kickback the
Minister could likely help Janet to manage the current landowners and the Indigenous
stakeholders and to obtain the necessary land and permits, including the license to drill and
extract water from the aquifer underneath the First Nation land. Ms. Peters knew that the
Province of B.C. could expropriate the farmland and obtain ownership of the land by paying the
going appraised rate for it. Since the land was still zoned as agricultural land this would not cost
the Province as much as if it was zoned commercial. Then Janet figured it would be easy
enough to have the province rezone the land to commercial so she could proceed with the
development. After all, she could point out the increased tax base the business would create
and the number of people the project would employ, and she knew that several key
government officials “owed her”. Janet figured with the right words and the appropriate
ongoing political funding support, she could also influence the Canadian Minister of Federal
Resources, who owed her and SHE Inc. a favour due to a previous generous funding
contribution by Janet and the company during the last federal election. Janet also heard that
the Chief and Council of Stz’umi’nus First Nation (SFN) were looking for funds to build a new
school, and that SFN always sought an equity position in development in their territory. Janet
could ensure that her financial partners would be open to a small (2 to 5 %) equity ownership
by SFN by giving the financiers a bigger piece of the pie as well. Perhaps a donation to SFN for
the school would be helpful, and she could likely convince other stakeholders such as suppliers
and her financial partners to contribute to the local hobby farmers in the area as well as to the
Indigenous communities. A bit of kickback (i.e., larger dividends from the profits of the
companies to suppliers and investors perhaps) would do the trick. Ms. Peters also thought she
could visit the local Newcomers Welcome Society in the community and offer to provide jobs
and training for their support for the project. She considered wining and dining the Society’s
president and offer to hire qualified people jobs at the company.
At work on Monday Ms. Peters consulted with Christine about these thoughts and the slide
show the younger Ms. Peters mentioned at the dinner. Christine was taken aback by her
mother’s “old school business approach” and her intentions and cautiously advised a more
professional and expert approach. And after discussing the contents of the slide show with
Janet she convinced her that the most critical stakeholders to deal with were the local
Stz’min’us First Nation and the Hul’qumi’num people, who comprised 5 individual First Nations
that collaborated collectively under one First Nation for the purpose of negotiating over largescale project proposals that had the potential of adversely impacting their Aboriginal rights and
titles in their traditional territories. Christine emphasized though that all stakeholders were
important to some degree. She also suggested that the company ought to do a full-scale review
of its overall stakeholder concept and consider creating a systematic approach to working with
stakeholders. As part of this approach, she encouraged Janet and her company to consider the
benefits of being proactive in relation to equity, diversity, and inclusion issues that might arise.
Ms. Peters succumbed and wanted to do the right thing socially and to mitigate financial risk of
the enterprise. After all, isn’t that the new business model? But she had never had to worry
about the social impact of her other operations. She instructed senior management of Sitka
Equity Investments Inc. to retain you, the consultant, to conduct a business analysis of the
stakeholder, ethics, and CSR landscape and the issues at stake in Janet’s proposal. Janet heard
that you were a recent graduate specializing in strategic planning with a focus on CSR, and an
up-and-coming superstar in the field. There was a lot to consider. She was conscious of price
and wanted to hire you before you became too famous and unaffordable. She wanted to know
who the stakeholders would be and whether she should deal with all of them or have some sort
of priority management system. Janet wanted to know whether she was correct in focussing
on the Indigenous stakeholders.
And finally, she wanted to know how to be prepared if issues did arise. Given her family’s
admonitions she wondered if she should set up a separate department to deal with these new
ethical, social, EDI, and legal obligations, and if so how - i.e., whether to have just an ethics
department or a more fulsome CSR department. She thought maybe she would put Jaxon, her
son in charge of the new department. Or her daughter Christine. Or perhaps someone else you? And most importantly, should she even proceed with the project, and if so, what would be
the best approach to solve all the stakeholders’ concerns? Respond to Janet Peter’s and SHE
Inc.’s queries in memo format by answering the following questions.
Using ONLY your textbooks and class notes and Michael Porter’s recording/paper as
resources you feel that you can answer Sitka Home Equities Inc’s questions within budget.
What will be your advice to Ms. Peters? Respond to Qs 1 to 5 first, then conclude your paper
with summary recommendations by addressing Q6.
1. Read Sexty, R. (2020). Canadian Business & Society: Ethics, Responsibilities, and
Sustainability. 5th Edition. Toronto, ON: McGraw Hill Canada. Using select ‘stakeholder
management/engagement’ methods and approaches identified in your TEXTBOOK,
describe the overall stakeholder program/concept you would recommend and present
to Ms. Peters. Demonstrate how this would play out by applying your stakeholder
program to SHE Inc.’s scenario.
2. Read Sexty, R. (2020). Canadian Business & Society: Ethics, Responsibilities, and
Sustainability. 5th Edition. Toronto, ON: McGraw Hill Canada, chapters related to the
topic of ‘ethics.’ Identify the specific ethical issues at play in our case study. Develop
and apply an ethics management plan to Ms. Peter’s business proposition to assist SHE
Inc. manage its ethical issues?
3. After reviewing Sexty, R. (2020). Canadian Business & Society: Ethics, Responsibilities,
and Sustainability. 5th Edition. Toronto, ON: McGraw Hill Canada, what specific CSR
issues can you foresee in this scenario? Should SHE Inc. develop a CSR concept, and if
so, what should it look like? Why? Demonstrate by applying your CSR plan to the SHE
Inc. case study.
4. After reading Sexty, R. (2020). Canadian Business & Society: Ethics, Responsibilities, and
Sustainability. 5th Edition. Toronto, ON: McGraw Hill Canada, chapters 3 to 9, consider
whether Sitka Home Equities Inc should establish an overall sustainability department
with a mandate to deal with all ethical and shareholder and CSR issues? If so, what
should be its value foundation? Who should Janet hire to lead the department?
5. Finally, should SHE Inc. have an issues and crisis management plan? Why, and If so,
then describe the plan and how it would be beneficial to SHE Inc.
6. Summarize, conclude, and recommend. Based upon the above analyses would you
recommend that Janet Peters and her company SHE Inc. proceed with the proposal?
Notes: An assessment rubric for this project follows and will be deposited in the Brightspace
course management system.