CASE STUDY 2

SILVERSTAR CHEMICAL COMPANY

I. VIEWPOINT
 Silverstar Chemical Company management and Mr. David Santos, the new
president of the company.

II. TIME CONTEXT

 Issue arised during the present time, which resulted from the company’s
action during the past 4 years.

III. DEFINITION OF THE PROBLEM

 Silverstar Chemical Company's unethical practice of dumping industrial
waste into a local river, which could harm the environment and human
health. The problem is whether to maintain this approach due to cost
concerns and potential economic consequences, or to do the right thing of
disposing the wastes properly even it will result to higher operating costs.

IV. OBJECTIVES
 MUST OBJECTIVE
i. To ensure compliance with environmental regulations and ethical
standards.
ii. To prioritize environmental health by proper waste treatment.

 WANT OBJECTIVE
i. To maintain the company's competitive advantage and profitability.
ii. To minimize potential negative impacts on the local economy and
workforce.

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V. AREAS OF CONSIDERATION
 INTERNAL ENVIRONMENT
i. Strengths
1. The company has maintained a well-established competitive
advantage in the industry as well as keeping its 10,000
employees.
2. For the past years, Silverstar Company has likely developed
reliable infrastructure for waste disposal, which includes
facilities and systems for handling, transporting, and disposing
of industrial waste.

ii. Weaknesses
1. Due to cost-cutting, the company chose to dump its industrial
waste in the river. This unethical practice not only poses
significant environmental and health risks but also tarnishes
the company's reputation and violates legal and ethical
standards.
2. There is potential for legal and reputational consequences due
to misleading reports to authorities about the waste.

 EXTERNAL ENVIRONMENT
i. Opportunities
1. Rising demand for sustainability allows reputation
enhancement through eco-friendly waste management
solutions.
2. Opportunity to innovate and develop cost-effective waste
treatment technologies that could lead to long-term profit
advantage for the company.

ii. Threats
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 1. Authorities may impose significant financial sanctions for non-
compliance with environmental regulations, including the
improper disposal of industrial waste into the local river.
2. Higher operational costs may arise from investments in
upgrading waste treatment infrastructure, purchasing
equipment for waste disposal, and hiring additional personnel
to oversee compliance with environmental regulations. This
could also affect the job of the company’s employees once its
competitiveness becomes at stake.
3. Rebuilding trust and repairing a damaged reputation can be a
challenging and time-consuming process, potentially impacting
the company's competitiveness and market share.

VI. ALTERNATIVE COURSES OF ACTION

 ACA 1: CONTINUE IMPROPER WASTE MANAGEMENT
i. Advantages
1. Lower operating costs, maintaining competitiveness.
2. Avoid immediate economic downturn in the local community.
3. Prevents a sudden increase in the operational costs related to
waste treatment and transportation.

ii. Disadvantages
1. Risk of legal consequences and fines for environmental
violations.
2. Potential harm to human health and the environment.
3. Long-term damage to company reputation and brand image.

 ACA 2: IMPLEMENTATION OF PROPER WASTE AND DISPOSAL

MANAGEMENT
i. Advantages
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 1. Compliance with environmental regulations and ethical
standards.
2. Potential for positive public relations and improved corporate
image.
3. Long-term sustainability and reduced risk of legal penalties.
4. Advanced waste treatment technology will save money in the
long run by being more efficient and reducing potential risks.

ii. Disadvantages
1. Higher operating costs may reduce competitiveness in the
short term.
2. May affect the economic downturn in the local community due
to job losses.
3. Potential opposition from internal stakeholders who are
hesitant to alter customary procedures.
4. Initial investment required for upgrading waste treatment
infrastructure.

 EXPANDING THE COMPANY’S ACTIVITIES TO COUNTERACT POSSIBLE

LOSSES
i. Advantages
1. It can give impacted workers access to alternative employment
possibilities.
2. Silverstar Chemical Company can reduce its reliance on its
current operations, potentially offsetting any losses incurred
from implementing proper waste management practices.
3. Expanding company activities can help economic growth in the
local community by creating new job opportunities and
attracting investments.

ii. Disadvantages

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 1. Expanding into new activities may divert resources and
attention away from the company's core business, potentially
compromising operational efficiency and competitiveness.
2. It will require some time and additional funds to incorporate
the plan of exploring other profitable activities.

VII. RECOMMENDATION
 IMPLEMENTATION OF PROPER WASTE AND DISPOSAL MANAGEMENT (ACA
#2)

Ethical waste management practices demonstrate the company's

commitment to reducing its environmental footprint and operating in a
sustainable manner, which can enhance its reputation and competitiveness in
the long run. This would be the most advisable action for the company to take
because engaging in unethical practices, such as improper waste disposal,
can tarnish the company's reputation and erode stakeholder trust. Also,
violating environmental regulations can result in fines, penalties, and legal
liabilities that could give more damage to the company financially.
Furthermore, consumers, investors, and regulators are placing greater
emphasis on environmental responsibility, and companies that prioritize
sustainability are often perceived more favorably.

Overall, the recommendation to adopt ethical waste management

practices is a proactive and strategic decision that not only aligns with the
company's values but also enhances its long-term sustainability and
competitiveness.

VIII. ACTION PLAN

Activity Personnel – In – Charge Budget Time Frame

 Conduct Meeting Board of Directors - 1 day

 Assessment of Current Environmental Compliance
₱ 50,000 2 months
Waste Management Team

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 Practices
 Research and Select
Research and Development
Suitable Waste ₱ 100,000 3 months
Team
Treatment Technology
 Infrastructure
Engineering and Operations
Development for Waste ₱ 500,000 6 months
Team
Treatment
 Implementation of
Operations and Quality
Waste Treatment ₱ 200,000 On going
Control Team
Procedures
 Environmental
Environmental Compliance
Monitoring and ₱ 50,000 On going
Team
Reporting
 Continuous Environmental Compliance
Improvement and and Research and ₱ 100,000 On going
Adaptation Development Teams