Questions to be answered related to the Hondo business case:

1. Who Are the Primary Stakeholders? (i.e., Who has a stake in the outcome of this situation?)
2. What Are the Ethical Issues?
3. What Are the Possible Alternatives?
4. Which possible alternative could provide the greatest net benefit to the greatest number?
5. What alternative would you choose if you were George? Why?(tip: think outside the box)

Something's Rotten in Hondo

Author:Dr. John Fraedrich, Assistant Professor of Marketing, Southern Illinois University

Characters:

George, Plant manager

Bill, George's boss

The Case

George Mackee thought of himself as bright, energetic, and having lots of potential. Sowhy was this happening to me, he thought. George, married, two children, with his wife, Mary, had moved to Hondo, Texas, from El Paso four years ago and was now the managerof Ardnak Plastic Inc., a small plant that manufactured plastic parts for small equipment. Theplant employed several hundred workers, which was a substantial portion of the populationof Hondo.

Ardnak Plastics Inc. had several small plants the size of Hondo's, and George hada good relationship with Bill, his boss, in Austin, Texas.

One of the problems George's plant had was that the smokestack emissions wereconsistently above the Environmental Protection Agency's (EPA) guidelines.

Several months ago, George got a call from Bill, statingthat the EPA had contacted him about the problem and fines would be levied. Georgeadmitted the situation was a continual problem, but because headquarters would not invest innew smokestack scrubbers, he didn't know what to do.

Bill replied by saying that marginswere at their limits and there was no money for new scrubbers (modifications to the smokestacks that would reduce the emissions). Besides Bill commented,other plants were in worse shape than his and they were passing EPA standards.

Georgeended the conversation by assuring Bill that he would look into the matter. He immediatelystarted calling his contemporaries at other Ardnak plants. He found they were schedulingtheir heavy emissions work at night so that during the day when the EPA took their sporadicreadings they were within standards. George contemplated this option even though it wouldresult in increasing air contamination levels.

A month went by, and George still had not found a solution. The phone rang; it was Bill. Billexpressed his displeasure with the new fines for the month and reminded George that therewere very few jobs out in the industry. That's when Bill dropped the whole thing intoGeorge's lap.

Bill had been speaking to the Mexican government and had receivedassurances that no such clean air restrictions would be imposed on Ardnak if they relocated15 miles south of Hondo in Mexico. However, Ardnak must hire Mexican workers if they did so.

Billexplained that the reason for relocating would be to eliminate the EPA problems. Bill toldGeorge he had one week to decide whether to eliminate the fines by correcting the currentproblems or by relocating.

George knew that relocating the plant on the Mexican side would devastate the infrastructureof the city of Hondo and would continue to put contaminants into the air on the U.S. side.

After mentioning the possibility to Mary, other concerns were reinforced. She did not wanthim to be responsible for the loss of jobs for their friends and extended families.