Due to competitive disadvantages of high labor cost and heathcare expenses, a ma

Question

Due to competitive disadvantages of high labor cost and heathcare expenses, a manufacturing company is considering the relocation of its manufacturing plant from a small city in midwest to a border town in Mexico. Approximately 20% of the residents of the city are employed by the company, and many others are employed in businesses such as banks, restaurants, shopping centers, and grocery stores that would suffer a decline in business if the company decide to relocate. Does the company have a social responsibility to factor into its decision the impact that its move would have on the city? Explain your reasoning.

Explanation / Answer

The Social obligations of company are known as Corporate Social Responsibility. It is an obligation of the company to ensure the welfare of the general public and additionally nature. We know the principle rationale of business is to win the cash, enterprises should step up with regards to the welfare of the general public and ought to play out their exercises inside the structure of natural standards.

As per the “Pyramid of CSR”, every company needs to satisfy four responsibilities to become a true CSR follower:

Talking about ethical and discretionary responsibilities, the community is a major stakeholder for every company. In the context of the manufacturing company mentioned in the question, the company should factor the local community into its decision because CSR expects any company to do business while enhancing the personal satisfaction of the workforce and their families and additionally of the nearby network and locality.

If the company relocates, not only many employees might need to relocate with/without their family members but also a major revenue of all community businesses is lost. Corporate organizations are a part of the society and their business decisions influence the general public straightforwardly or by implication.

Thus, being a true corporate citizen, the company has social responsibility towards the community & should factor this into its decision of relocation.

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