Japanese Steel Industry in Vietnam

[pic 1]

JAPANESE STEEL INDUSTRY IN VIETNAM

Dirty Business

[pic 2]

[pic 3]

TABLE OF CONTENTS

Introduction:        3

Stakeholders Relationships theory        3

1.        Theory discussion        3

2.        Application        3

3.        Solution        5

4.        Recommendation        5

ETHICAL DILEMMAS        6

1.        Theory discussion        6

2.        Application        6

3.        Solution        7

4.        Recommendation        7

CONCLUSION        8

Reference list:        9

Introduction:

The processing of producing coke which is one of the main material for manufacturing steel is the major factor in environmental pollution (Olmez et al., 2015). Although there are many new cleaner methods which are applying in manufacturing steel products, some steel industry still receives controversies about environmental pollution (Schnitzer, 1995). In Southern Vietnam, a Japanese steel factory has a large controversy because it causes major problems to the environmental issue that are air and water pollution. The major problems of factory steam from lack of ethical dilemmas to public communities and pressure of Stakeholder Relationships (External Environment). The aim report is to look into the two theories which are Stakeholder Relationships and Ethics. Additionally, these theories will be clarified in the real case which is from Japanese steel factory.

Stakeholders Relationships theory

1. Theory discussion

According to Oxford University Press, Stakeholders is defined that a person or groups of people of organization’s external environment that can influence or be influenced by the business decisions and actions. Furthermore, stakeholders can be called by including external environment factor which can be directly or indirectly impact on organization’s action or decisions. In the stakeholder relationship include many factors such as customers, shareholders, pressure groups, employees, communities, competitors.

1. Application

In real situation, the Japanese steel factory are facing with big pressure from many stakeholder relationship. There are several stakeholders who is classified below.

Firstly, the major influencers are pressure groups who are local residents and environmentalists. They have conducted their own investigation that steel factory has generated a serve air and water pollution to environment, and they proved that the chemical level of this factory are 50 times higher than authorized standards. Furthermore, the environmentalists from two foreign NGOs have social media channel which over 2000 households are directly exposed to air pollution and famers at downstream will suffer from toxic chemicals in water. Consequently, these evidences rejected the communication in press conference of Mr. Suminoto, who is CEO of the Japanese steel factory. In the public speaking day, he said that the factory is very concerned about environment and standard living of local residents. Therefore, the controversy is becoming larger than in the past, and the factory will be decreased status in the public attitudes and customers. additionally, these evidences will probably affect to government decision in compulsory abandoning operating to factory.

Secondly, customers are influencers to absorb the business output, so the factory must provide the needs of customers without delay. If the factory decide relocation, they will lose some major customers. However, the controversy also impact on the thoughts of customers. They have wonder from customers that they are thinking about selecting their suppliers. It means that they do not want to have a dirty supplier, it can impact on their users too.

One important groups are shareholders who provide finance to factory. They put a strong pressure to local management of the factory in deciding relocation or pausing operating factory. The reason is that it can lead to major loses profit to company. Additionally, local governments of Southern province will be lost a large tax income, and 1600 workers will become unemployment. These groups will help the factory in compulsory pausing operating from local authorities.

One of the influencers who has benefits from this steel industry decision is competitors. In the steel industry, there are a huge number of competitors, therefore, the price and celebrity play an important role in keeping loyalty customers. If this steel factory adapts new cleaner method, the price can be higher than in the past. This is an opportunity for other competitors. For example, Chinese steel industry have more than 1000 producers. As consequence, the high number of competitors make each of company difficult to control.

1. Solution

Deciding is a difficult step for any CEO of company. If the management of factory want to control stakeholder relationships, the best way to deal is that company should give the way to solve Pressure Group first. It means that the local management should communicate to environmentalists about environmental issue and organizing a public investigation. It is the best way to present that CEO Mr. Suminoto has concerned about the environmental living of local residents and the controversy.

One more point, the local management of factory also have to communicate with shareholders about company’s issue to lead them understanding the massive controversy which company is facing. It will work effective in persuading shareholders for another decision if the company break the law of environmental authorities.

1. Recommendation

According to Samue F. Mansell, choosing the most influencer of stakeholders to treat is very difficult to management of the organisation because any of them is very important to run a business. However, he also stated that the Pressure Group who concerned about human lives are the highest power to human thoughts, and it can lead to boycott the factory from consumers. For example, one of the pressure group called PETA’s (People for the Ethical Treatment of Animals) has a strong pressure on the McDonald’s Corporation over its treatment of animals during the slaughter process, and it led McDonald’s to pause purchasing beef from suppliers until it met its measures for processing cattle. Based on the example, in Japanese steel factory, Pressure Group can bring factory to pause operating until the factory have specific solution.  

ETHICAL DILEMMAS

1. Theory discussion

Based on the Powerpoint Slide of BUSM4185 Introduction to Management (Power, Politics and Ethics in Management, 2018), ethics management is moral rules that arrangements with ideas of good and bad conduct of individuals and having cognizance about good results of choices. Business morals is called a type of connected morals into all parts of business including individual and entire association. Ethical dilemmas can be compared as Human Resource Management morals, as wellbeing on being responsibility to environment, being honest to publics, break even with treatment to representatives and trustworthiness in collaboration. Morals in administration is one of variables to consider that the organization is worked whether great or terrible, dependable or not.