The R&D division of Hancock Chemical Corp. has just developed a chemical for ste

Question

The R&D division of Hancock Chemical Corp. has just developed a chemical for sterilizing the vicious Brazilian “killer bees” which are invading Mexico and the southern states of the United States. The president of Hancock is anxious to get the chemical on the market to boost the company’s profits. He believes his job is in jeopardy because of decreasing sales and profits. Hancock has an opportunity to sell this chemical in Central American countries, where the laws are much more relaxed than in the United States. The director of Hancock’s R&D division strongly recommends further testing in the laboratory for side-effects of this chemical on other insects, birds, animals, plants, and even humans. He cautions the president, “We could be sued from all sides if the chemical has tragic side-effects that we didn’t even test for in the labs.” The president answers, “We can’t wait an additional year for your lab tests. We can avoid losses from such lawsuits by establishing a separate wholly owned corporation to shield Hancock Corp. from such lawsuits. We can’t lose any more than our investment in the new corporation, and we’ll invest in just the patent covering this chemical. We’ll reap the benefits if the chemical works and is safe, and avoid the losses from lawsuits if it’s a disaster.” The following week, Hancock creates a new wholly owned corporation called Badell Inc., sells the chemical patent to it for $10, and watches the spraying begin.


(a) Who are the stakeholders in this situation?
(b) Are the president’s motives and actions ethical?
(c) Can Hancock shield itself against losses of Badell Inc.?

Explanation / Answer

a. The stakeholders in this situation is Badell Inc and Hancock Corp diectly and the human race and the insect , birds , plants nad animals who are going to be exposed to the chemical spray. In short the whole eco system coming in touch directly o indirectly with the chemical is at stake.

b. The motives and the actions of the president are totally unethical. He has put the ecosystem and human race under a serious threat for a short term profit motive. The chemical is untested for the possible side effects of other plant and animal life and any possible side effect will cause havoc for all affected. He must have waited for a year to allow the lab tests get completed instead of taking such a hasty and utterly risky action. This does not fit into the definition of a responsible human being let apart a responsible business leader. His short sidedness may cause huge damage for the ecosystem and for Badell & Hancock in particular.

c. In case of any disaster Hancok cannot avoid losses and lawsuit as the chemical has been developed by Hancock and sold for eyewash to the Shell company . Badell Inc has no R& D of its own and is merely a front face of Hancok, in case of lawsuit and investigation the whole truth will come forward and Hancock will be severely punished for the misdeed.

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