Question
Bendex Ltd manufactures wall sheets, ceiling insulation and motor vehicle brake pads using raw material that has been reported as potentially causing long-term health problems,
Bendex Ltd manufactures wall sheets, ceiling insulation and motor vehicle brake pads using raw material that has been reported as potentially causing long-term health problems, and there are concerns about the resources used to create the products. Currently, the company has reported good earnings per share and increased profits. The companys board and executives have received a report from an external environmental and social consultant, which contains the following advice. 1 There is a raw material that is a substitute for the new material currently used by Bendex in the three products it manufactures, but the substitute costs about 50% more than the current material. 2 The availability of the current raw material will be limited in the future. 3 There is mounting strong evidence that the current raw material is linked to long term health problems for employees, installers, customers and school children. The companys board and executives know they have a stockpile of the current raw material and a contract to purchase it for another two years. The company would incur extra cost if it were to breach the contract with the supplier. They decide to continue to use the current raw material until the cost of the substitute is about the same price as the current raw material. Required a) What should the Bendex Ltds board and executives consider if they wish to become a sustainable business? (5 marks) b) What key considerations about systems and processes should be part of Bendex Ltds attempts to be a sustainable business? (5 marks)
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