Case Study: Ethical Dilemmas $in$ Strategic Decision$-$Making

Background: EcoSustain Inc. $is$ a global company that produces eco$-$friendly, biodegradable packaging solutions. Recently, the company was awarded a large government contract $in$ a developing country $to$ supply packaging for public food distribution. While the company prides itself $on$ its strong ethical stance and compliance with international environmental standards, recent developments have raised questions about its ethical and legal obligations.

Upon $securing$ the contract, the local government requested that EcoSustain use a local supplier for raw materials $to$ support local businesses. However, after conducting a due diligence investigation, EcoSustain discovered that the local supplier does not meet environmental standards and engages $in$ unethical labor practices, including low wages and poor working conditions. The government implied that using this supplier $is$ essential for maintaining the contract and building favorable relationships with local politicians.

EcoSustain$s$ leadership team $is$ now faced with a difficult decision. Rejecting the local supplier may cause political backlash and risk the loss $of$ the contract, which would harm their long$-$term strategy $in$ the region. However, using the supplier would violate their commitment $to$ environmental sustainability and human rights.Case Study Questions:

Business Ethics and Ethical Decision Making

What ethical dilemmas are EcoSustain facing $in$ this scenario? How should the company balance its corporate social responsibility $(CSR)$ values with the practical challenges $of$ operating $in$ this market?

Legal, Regulatory, and Political Issues

What are the legal and regulatory implications $of$ EcoSustain$s$ decision? How should the company handle the pressure from the local government $to$ use a supplier that does not meet its ethical standards?

Strategic Management $of$ Stakeholder Relationships

How should EcoSustain manage its relationships with different stakeholders $in$ this case, including the local government, the supplier, international regulators, and its own shareholders?

Corporate Reputation and Long$-$Term Strategy

How could the decision $to$ work with the local supplier, $orto$ reject them, affect EcoSustain$s$ reputation and long$-$term strategy $in$ the region? What are the potential risks and benefits $of$ each option?

Decision$-$Making Framework

Using a recognized ethical decision$-$making framework, propose a step$-by-$step approach that EcoSustain$s$ leadership could take $to$ address this issue. What factors should they consider $in$ making their final decision?