L&E Business

Case Example: You are the CEO for GreenCar, Inc., a corporation that recently kicked off the sale of its new car that runs on garbage, the Compostr. After 3 months of sales, the management team has received some troubling reports of some Compostr cars spontaneously catching fire. The management team asks the accounting department to run some numbers to determine how much it would cost to recall all Compostr cars, to suspend manufacturing, and to conduct more tests to determine the car's safety and other possible issues. After running some numbers, the accounting department states that it would be more cost-effective to leave the product on the market and propose settlement proceedings with anyone who is injured and initiates a lawsuit.

If you decide to recall the product, it will result in a delay of dividends paid to shareholders, a loss in revenue affecting shareholder profit, and possibly your job as CEO. Choose a position on the argument, and discuss you answer:

• FOR argument: Would you be for leaving the cars on the street because you feel your duty as a corporate manager is to maximize shareholder profits? If so, under what corporate social responsibility theory would you be operating?

• AGAINST argument: Would you be against leaving the cars on the street and recall the product because you feel the corporation owes a duty to the public, consumers, and the government in terms of social responsibility? If so, under what corporate social responsibility theory would you be operating?

Deliverable Length:   200 words (minimum)

Reading Assignment