Case Study: Something's Rotten In Hondo

Something’s Rotten in Hondo

Key Points Considered from the Case:
• George Mackee and his family moved to Hondo, Texas and was now the manager of Ardnak Plastics plant, a small plant that manufactured plastic parts for small equipment (Buchholtz, Carroll 600).
• George Mackee had a good relationship with his boss Bill, who was located in Austin, Texas (Buchholtz, Carroll 600).
• The smokestack emissions at George’s plant were always above EPA guidelines and because of this George received a phone call from the EPA stating that fines were going to be levied (600).
• Once George informed Bill about the problem and fines, Bill told George that the headquarters were not going to invest in new smokestack scrubbers and that he would have to come

up with a plan (Buchholtz, Carroll 600).
• George was faced with the idea that he could schedule heavy emissions work at night so during the day when the EPA took their reading it would be within the guidelines however this idea could potentially increase air contamination levels (Buchholtz, Carroll 600).
• Bill had been speaking with the Mexican government who had offered that no such clean air restrictions would be imposed on them if they relocated Ardnak to Mexico, as long as they hired Mexican workers (Buchholtz, Carroll 601).
• George was given only 1 week to decide whether to relocate to Mexico or stay in Hondo, Texas and fix the current problem (Buchholtz, Carroll 601).

Concepts/Ethical Ideas Used to Analyze the Case:
• Moral suasion is a government tool. It refers to the attempts made by the government or a government to persuade a business to act in the public interest by taking or not taking a particular course of action (Buchholtz, Carroll 338).
• Negative externalities is the result of when the manufacture or use of a product give rise to unplanned or unintended side effects on third parties i.e. air pollution, improper disposal of toxic waste, water pollution (Buchholtz, Carroll 340).
Conclusion (answers to the questions in the text):
1. The stakeholders in this situation is the manager George and his family, Bill, the consumers/ civilians of Hondo, and the employees. George’s stake would be that he would have to relocate himself and his family once again but this time it would be out of the country. Bill is the boss which makes him a stakeholder also and fines that were being implemented on Ardnak are his responsibility too as well as following EPA guidelines in Texas. The consumers/ civilians are at stake because if Ardnak relocated to Mexico, the economy of the city Hondo would be devastated and would still be impacted by the air contaminants that could travel 15 miles from Mexico back to Hondo, Texas. And lastly the employees are at stake because they would lose their jobs. If Ardnak

relocated to Mexico they would have to hire Mexican workers, leaving the current employees unemployed and jobless.
2.

The social responsibility that Ardnak Plastics Inc. have to Hondo, Texas is to ensure that they are not causing harmful chemicals to be in the air, water ext. that can lead to serious illnesses to the people of Hondo. It is their responsibility that they are administering EPA guidelines rather than trying to avoid them. It is the people of Hondo who have been keeping Ardnak in business and it is up to them as a business to ensure that they are not polluting the environment and contributing to air contamination.
3. The ethical issues in this case include should Ardnak continue to stay in Hondo and continue to contaminate the city without paying fines, or should they relocate to Mexico and continue to contaminate the city of Hondo as well as the city in Mexico. Some key concepts that relate to these ethical issues are social costs and negative externalities.
4. George should implement a new strategy for Ardnak Plastics Inc. so that they do not consistently go over EPA guidelines, and should speak with headquarters so that they could invest in new smokestack scrubbers. Over all relocating will not solve the problem but would only make matters worse. George and Bill should pay the fines that have already been levied and find ways that would allow them to continue with their emissions but under the correct

guidelines.

Additional Questions
1. Why won’t headquarters invest in new smokestack scrubbers?
2. Why was Bill speaking with the Mexican government in the first place?

Reference
Buchholtz, Ann K., and Archie B. Carroll. Business & Society: Ethics, Sustainability & Stakeholder Management. S.l.: South-Western Cengage Learning, 2012. Print.