United Nations Global Impact Game Report

THE UNITED NATIONS GLOBAL COMPACT DILEMMA GAME

Individual self-assessment report

Dilemma : An agent, representing a government minister from a country in which my company has a significant number of operations, and has targeted for future growth, has contacted me. The minister requires me to make my company buses and cars available for him, while he is campaigning for the upcoming election. In return the minister will implement new regulations mandating, with immediate effect, higher environmental product standards which my company already complies with. This will effectively eliminate much of our competition.

The Ethical issue

The key issue in the case is to deal with unethical professional gains that can be made by company, in return for some unethical favours given to some other person/organization. The gains add to the shareholders value but is against ethical policies and standards. There is also an issue of threat to business for not agreeing to lend support, in case the favour is asked for by someone powerful enough to directly impact the business.

The facts

The returns received from the minister will lead to a direct rise in profitability of the company because of drastic reduction in competition. The effect though might not be long lasting since the competitors would soon catch up with improved standards. However the stakeholders value would definitely increase and the new regulations would improve the environmental standards too. In case we refuse favours, the minister might come up with some regulations which may jeopardise company's growth in the country. But the act is itself unethical and illegal too in most part of the world.

Stakeholders and obligations

Shareholders : The company is obligated to increase shareholders returns. The refusal of proposal can lead to loss of shareholder's returns and vice versa.

Community : The company is expected to do help in betterment of community. While on one hand the raised environmental standards would benefit community, on the other hand helping a corrupt minister would not be good for community.

Customer : The company is obligated to give the best product to customer. Customer wont be directly affected but it will have lesser choice if competitiveness of the market is reduced.

Employee: The company is obligated to work for benefit of the employees. The employees are directly affected by increase or decrease of profitability that may cause job cuts.

NGO : The company is not obligated to NGOs but any decision to improve environmental standards should be welcome by them.

Ethics Standards involved

This dilemma relates to 10th Principle of the United Nations Global Compact principles: A business should work against corruption in all its forms, including extortion and bribery.

Operational Issues

If the favour is refused, the minister in future, might come up with some regulations which may jeopardise company's growth in the country. There is a direct loss of the gains which could have been made by accepting the offers. If the favours are given, it would benefit the company but there is no guarantee that the already corrupt minister would keep his words. Besides it could become a practice to expect such favours in future.

Accounting and auditing issues

The company needs to account for and justify the expenses