QUESTION 1 (40)

Sihlalangenkani is a small town (with approximately 7 000 inhabitants) on the SishenSaldanha Makhushushu railway line in the Western Cape. It is located in a fish farming area. There is a local school (pre-primary to Grade 12) with 710 learners. The town is due for a R50 million development grant from the provincial government.

The town square is built around the historic railway station and contains several stores, a co-op, a hotel and churches representing several denominations.

NCIS is a highly profitable iron and steel works company (with 1 000 employees) that has been based in the town since 1963. It is in the process of considering a relocation of the plant to Drakenstein, 200 km from Sihlalangenkani. Should the relocation become reality, the company will merge its operations with the companys other, much bigger, plant and head office in Drakenstein. Initial projections indicate a turnover growth of 20% and an effective dividend growth (payable to shareholders) of 40% over the next three years. NCIS also intends listing on the AltEx of the JSE 18 months from now. The company is willing to pay employees a once-off relocation allowance of R75 000. Rumours of the possible move have recently reached the townsfolk. In turn, the CEO, Kabamba Plaatjies, has heard that a delegation consisting of representatives from different interest groups has requested an urgent meeting with the Board of NCIS to discuss the relocation, which they perceive to be imminent.

Questions 1.1

Are there key ethical issues that can be identified in this case, and if so, what are they? (10)

1.2 Who are the stakeholders that will be affected by major decisions regarding relocation, and what are the organisations obligations to these stakeholders? (20) 1.3 What should the organisation do to ensure an optimal ethical decision? (10