Case Analysis:
Energy Cooperative
&
Clean Company
A comprehensive review of the Ethical Principles
regarding Social Corporate Responsibility.
Joanne Marin
Kaplan University
LS312-03: Ethics & the Legal Environment
Unit 9 Final Project
Case Analysis for Energy Cooperative
Concern: Energy Cooperative Board of Directors solicits clients for their own personal consulting
business while they are speaking with potential clients for Energy Cooperative.
Legal:
When the directors solicit clients for their own purpose while doing business as the board of directors
for Energy Cooperative, they are in a conflict of interest.
Conflict of Interest definition: a situation that has the potential to undermine the impartiality of a
person because of the possibility of a clash between the person's self-interest and professional-interest
or public-interest. BusinessDictionary.com
“A member of a profession who has been involved in a conflict of interest might be subject to
disciplinary proceedings before the body that granted permission to practice that profession”. Free
Dictionary by Farlex.com
Recommendation: My recommendation is for the directors, who are members of the board, to be
responsible to their job which is to gain clientele for the energy programs that Energy Cooperative has
available. If not, and they get caught, they will be seen as a conflict of interest and could be sued by
Energy Cooperative.
Stakeholders: By serving themselves, the directors can bring on legal troubles for themselves and
Energy Cooperative which will cost money.
By the directors abiding by the law, the stakeholders will have the time to concentrate on the energy
programs and its clientele.
Economic:
Economically, if the directors’ introduce their own consulting business to potential clients, the clients
might decide to do business with the directors own company and not Energy Cooperative. By doing this,
Energy Cooperative would be losing money.
Recommendation: My recommendation is for the directors, to concentrate on getting clients for this
company. They can focus on their business on their own time.
Stakeholders: The affect on the stakeholders regarding this concern would be losing money for Energy
Cooperative. If they lost money, they would have to decrease their employees and this would hurt
consumers by not having enough people cold calling. Also, some of the programs might have to be
deleted if not enough clients are recruited.
By concentrating on the potential clients for Energy Cooperative, the stakeholders would be affected by
increased profits, since the directors are concentrating on gaining clients for this energy program.
Ethical:
The ethical viewpoint would be to only solicit clients on the behalf of Energy Cooperative. To include the
directors own consulting business would be misleading the potential clients. The justice theory would
apply here which states each individual should be treated with fairness. Kaplan eGuide to Ethics and the Legal
Environment: John Rawls: A Theory of Justice, Chapter 1, Pg 7
By the directors doing this, it would not be fair to Energy Cooperative. It is only fair to Energy
Cooperative to have their directors speak on behalf of them and the energy program, not the directors
own personal business.
Another ethical theory would be to suggest that the directors are ethical egotistical. This is to say that
they are interested in their own concerns and feel they are not hurting Energy Cooperative.
Recommendation: I would recommend that the directors be fair and just to Energy Cooperative and not
use their time to solicit clients for their own purpose. They need to understand that they are working for
a large corporation who is depending on them to gain clients for their energy program.
Stakeholders: The affect on stakeholders would be having a board of directors who are acting unethical.
Stakeholders want a corporation to be honest and to know the board is working on their behalf. It is
very important to recognize stakeholders for they are what keep a business going. The directors need
the community, (stakeholders) to keep the programs profitable otherwise the programs will falter.
Kaplan eGuide to Ethics and the Legal Environment: Why Should Businesses Care about the Stakeholders? Chapter 2, Pg4
When the board of directors’ act with ethical reasoning, this would affect the stakeholders by having a
board who have a sense of integrity and a good conscience.
Philanthropy:
The concern regarding philanthropy is Energy Cooperative has created energy programs that would help
the community with their energy bills. The community would be saving money and learning how to
conserve energy. This also helps the environment. This is a great corporate responsibility endeavor.
Kaplan eGuide to Ethics and the Legal Environment: The Four Areas of Corporate Social Responsibility: Philanthropy, Chapter 2,
Pg 4
The director’s are to introduce these programs and work on getting the customers to buy into the
energy cooperative program, not lead them in for their own purpose which would be each director’s
own personal consulting business. Gaining clients for their own business should be done on their own
time, not while working at Energy Cooperative.
Recommendation: The directors must stop all conversations regarding their own consulting business.
Energy Cooperative is giving the community an option towards saving money and taking care of the
environment. If clients become aware of this, they might quit the program and end up with a negative
understanding of this corporation. This could lead to a bad reputation for Energy Cooperative.
Stakeholders: The stakeholders would be affected by losing clients and for allowing unethical practices
within their organization. When the directors focus only on the energy programs, the stakeholders will
gain clients and the programs will continue to be available for consumers.
Case Analysis for Clean Power Company
Concern: Clean Power Company produces an energy regulating device that automatically regulates the
use of power sources in homes and businesses. They are moving their corporation to the Dominican
Republic and will acquire 500 acres of undeveloped land next the Chavon River. Teltac Corporation has
agreed to help with the development and suggested Clean Power run sewer lines into the river which is
clean and large enough to absorb the waste. This action will be detrimental to the community and to the
school which they are building to help with the overcrowding problem the community is experiencing.
Legal:
It is illegal to dispose of waste in such a matter. There are various facilities which have treatment centers
to sanitize the waste in the proper way. Sewer waste that is dumped into a river will cause diseases. The
contaminated water leaks into the dirt and thereby spreading infections and other serious illnesses. The
Clean Water Act was established to protect not just the waterways, but also the plant and fish who
occupy these waters. Kaplan eGuide to Ethics and the Legal Environment: Clean Water Act, Chapter 4, Pg 3
Recommendation: Clean Power needs to find the correct way to dispose of the sewer waste. Legally
speaking, they could get fined and possibly be forced to close. Contacting the EPA beforehand and
researching the correct regulations will allow enough time to incorporate a treatment center onto the
land. The EPA will inspect the water and if contamination is found, they will notify the proper authorities
and the state. Kaplan eGuide to Ethics and the Legal Environment: Clean Water Act, Chapter 4, Pg 4
Stakeholders: If Clean Company disposes the sewer waste into the river; the stakeholders will be
affected by contaminated water and soil. The stakeholders in this case include not only the company
and surrounding community but the environment at large. By Clean Company being responsible and
disposing the sewage correctly, they will ensure a cleaner environment.
Economic:
Economically, Clean Company is saving the community money by having this device automatically
regulate power sources in homes and businesses. By running the sewer lines into the river, they will end
up having to pay huge fines. To pay for these fines, the company will end up increasing their clients’
monthly charges which might prove to be too expensive for the clients. They will lose clients and will
end up shutting down.
Recommendation: I recommend Clean Company to invest in what is needed to clean and purify the
water. With this out of the way, they can focus on their clientele and not worry about someday being
caught, fined, or possible closed.
Stakeholders: The affect that this would have on stakeholders is money wasted on a program. If the
company would close or even temporarily shut down, the employees and community would lose jobs.
People would be out of work and the cost of cleaning up the river would be placed upon the community
which would prove higher taxes.
Ethical:
The ethical theory that can be applied to the case is the human right theory. Within this theory is
environmental right. This right means we have access to unspoiled natural resources that enable
survival, including land, shelter, food, water and air. Friends of the Earth International
If Clean Company decides to pump the sewage into the river they are taking away our human right to
have clean water. Water is a basic need which is fundamental in staying alive.
Recommendation: I would recommend Clean Company to insure the safety of the water by doing what
is ethically correct and follow the guidelines to dispose of the sewage. This will keep the river clean and
beautiful as they found it.
Stakeholders: The stakeholders will be affected by having a river contaminated by sewage. This will be
a tragedy to the community and the environment. The school which will be built will not be safe to the
children attending. The polluted water will seep into the dirt and will eventually lead to the playground.
The children will develop illnesses that will hurt them now and into the future.
Philanthropy:
Clean Company is participating in corporate responsibility by building a school to help the community
with overcrowding. This contribution is directly involving the community. Kaplan eGuide to Ethics and the Legal
Environment: The Four Areas of Corporate Responsibility, Chapter 2, Pg 4
Building this school will be creating new jobs within the neighborhood and helping children learn at a
higher degree since there will be more room to accommodate them. To dump sewage into an otherwise
clean river will be taking away all the good which they are trying to accomplish. The company will be
thought of as good for the people but their reputation will diminish when the news comes out that they
are polluting the river.
Recommendation: My recommendation is for Clean Company to continue to be a supportive entity to
the community and do what is needed so the river stays clean. This will lead them to a new direction
and earn them respect from the community.
Stakeholders: The stakeholders would be affected by the negative impact this would be on the
community. The corporation would lose its good standing within the area and the growth of the
neighborhood will decrease.
Conclusion:
Energy Cooperative and Clean Power Company are both doing their share to aid the community by
conserving energy and rebuilding a neighborhood. This is a direct example of what corporate social
responsibility relates to. If they continue on this path, they will gain the respect of the community which
will only prove to benefit them. They must continue to make ethical decisions and move forward
towards the future.
References
BusinessDictionary: Conflict of Interest
http://www.businessdictionary.com/definition/conflict-of-interest.html
Free Dictionary by Farlex
http://legal-dictionary.thefreedictionary.com/conflict+of+interest
Friends of the Earth International
http://www.foei.org/en/what-we-do/solidarity-work/environmental-rights-are-human-rights
Kaplan eGuide to Ethics and the Legal Environment: Clean Water Act, Chapter 4, Pg 3
Kaplan eGuide to Ethics and the Legal Environment: Clean Water Act, Chapter 4, Pg 4
Kaplan eGuide to Ethics and the Legal Environment: John Rawls: A Theory of Justice, Chapter 1, Pg 7
Kaplan eGuide to Ethics and the Legal Environment: The Four Areas of Corporate Responsibility, Chapter
2, Pg 4
Kaplan eGuide to Ethics and the Legal Environment: Why Should Businesses Care about the
Stakeholders? Chapter 2, Pg 4