Several years ago, a citizen environmental group from Kentucky began complaining about the health hazards they claimed were being carried downstream from the processing facility of Global Chemical across the state border in Ashton, West Virginia. Several small towns along the river in Kentucky had been affected by the pollution. They brought in health specialists to support their claims that pollutants from the river were causing serious health problems in these towns. An independent study conducted by the state of West Virginia concluded that while the residents of these towns did experience higher-than-normal levels of a number of types of cancer, “there is no proven link between these diseases and the chemicals from Global.” Now, despite this lack of proof, it appears that Global Chemical’s board of directors will consider the charges against the facility at its next meeting. As part of the materials to be sent to board members, the CEO would like to include recommendations about what action to take on this problem. The filtering system is too old to be upgraded, and to put in a new system would cost millions and would close the plant for months. Some board members think it would make more sense to build a new plant somewhere else (maybe overseas, where environmental laws are not as strict) rather than put an entirely new filtering system in such an old facility. Further complicating the situation is the fact that almost half of the workers in this community work at Global. Closing the plant for even a few months not only would cause extreme financial hardship but also would threaten the existence of many local businesses. Understandably, the unions at the company are totally opposed to any actions that might hurt their members, especially since none of the pollution charges have been proven. The citizens’ environmental group from Kentucky is threatening to cooperate with a 60Minutes-type program that is going to develop an exposé of the situation on national television. If it gets to that point, it might not matter that there is no proof that the chemicals from Global cause the diseases found in the Kentucky towns.
1. After reading the Global Chemical case, what strategy should Global Chemical pursue at this time and why?
2. Identify the stakeholders of Global Chemical. List them according to the level of influence they exert over the company, showing the stakeholder with the highest level first, then the stakeholder with the next highest level of influence, and so on. The last stakeholder on the list should be the one with the lowest level of influence. Next to each, briefly discuss the reasons behind your ranking.