Corporate Social Responsibility

My personal definition of corporate social responsibility is sharing the  fruits of  your labor, initially within your own organization, as charity begins at home, then to the other people in your community.

A more sophisticated definition is shared by the Financial Times wherein it defines  corporate social responsibility  (CSR) as  a business approach that  drive change towards  sustainable development through the delivery of   economic, social and environmental  advantage and benefits  for all stakeholders.

Our company, IDESS Maritime Centre,   is a  world renowned training center located inside the Subic Bay Freeport Zone. It is a socially responsible company engaging in many programs that benefit the many surrounding communities and beyond.

Our company should engage in CSR to be able to help and give back to our own people, the community and society in general; it will create good image for the company; be more profitable; be more of a blessing to all our stakeholders; set the company apart from its competitors.

When I interviewed our Head of HR Department, she said that IDESS has created a CSR Committee and is responsible for organizing the  different CSR activities for the company in collaboration with the Subic Bay Metropolitan Authority (SBMA)  and other private and local government offices. Based on my CSR audit and assessment, the current state of IDESS' CSR in the CSR Continuum is already engaged in philanthropic giving as it is doing more than what is required.

For 2017, IDESS has participated in several CSR activities such as the following: (1). Tree Planting:  On June 28, 2017, IDESS has sent its volunteer  employees to the  Arbor Day celebration organized by the SBMA.  It was participated  by representatives from the SBMA registered companies.Planted by the volunteers  were 5,000 seedlings of narra and fruit bearing species in a graded 2.2 hectare in  a forested area in Bangal. This tree planting activity is part of the SBMA's  program on environmental preservation  and conservation which revived the Arbor Day under Republic Act  10716;

SBMA Administrator  and CEO, Wilma T. Eisma together with  SBMA Director,  Tomas Lahom III, led the   tree planting activity at  the Subic Bay Freeport Zone in observance  of the  Arbor Day  together with the representatives from the various company locators inside the SBMA. Photo credit: SBMA

(2).  Donations for the earthquake victims:  In the aftermath of the 6.5 magnitude earthquake in the Visayas, the SBMA sought assistance from the company locators inside the SBMA.   On June 23, 2017, IDESS participated and sent donations to the SBMA to help families  alleviate their current situation in the evacuation areas by way of donating hygiene kits consisting of toothbrush, toothpaste, face towel,  bath soap, shampoo, and other basic items such as mosquito nets, clothes, blankets, canned goods, rice, milk,  drinking water, etc. (3). Mobile Blood Donation: On July 22, 2017,   IDESS employee volunteers participated in the non-remunerated blood donation organized by the Philippine Red Cross with the theme: " What can you do? Give blood, Give Now, Give Often."

Furthermore, our  management has developed a new external CSR programme for the cadet students of Maritime Schools. Thus, on  July 6, 2017, our Training Manager sent a letter to MARINA  asking for permission for our company to  conduct Basic Training (8.5 day course)  for the  cadets of the various Maritime Schools in the Philippines  as part of our CSR. IDESS is proposing to conduct the 6.5 day lectures  at the school premises of the students and then the remaining 2 days practical at IDESS main training complex in Subic as all the required  equipment and facilities are all here. IDESS shall endeavor to  partner with maritime  schools in the country that shares the same values and  vision.

The Basic Training is composed of four modules as follows:  Fire Prevention and Fire Fighting (2 days); Elementary First Aid (2 days);  Personal Safety and Social Responsibilities (2.5 days) ; and Personal Survival Techniques (2 days). In this programme, our Instructors and Technicians will not be charging any salaries. The only fees to be collected from the cadets are their two day stay at our dormitories, their food, consumable materials and electricity during their stay.

In line with this, I also have a  new potential CSR initiative i.e., for the company to provide scholarship grants to  qualified  and deserving personnel of the company who wants to continue and or finish their schooling and enroll in any of the following: Undergraduate Degree Course or Master's Degree Course. Based on the record of our HR Department, 68 percent comprises the workforce.This only shows that majority of the staff are in the lowest level of the hierarchy and in order for them to move up the corporate ladder they should be properly educated and have the corresponding experience in the next level of position.

I believe that education is the great equalizer and  by providing our workforce with golden opportunities to prosper in life such as this scholarship grants to our employees, they would surely seize this and be grateful to the management for this privilege.  This will also enhance their loyalty to the company and management as this will enable the employees to increase their knowledge, technical know how and  skills in the performance of their work.

My strategies will be as follows: (1) Discuss with top management about the proposal and share with them my personal experience as one of the full scholarship grantees of the Philippine Tourism Authority, a government corporation where I started as a working student  and where I chose the De La Salle University to finish my college degree. (2) Get management's  buy-in  and approval. (3) Appoint the CSR Committee to  oversee the planning  and development of the project details and Implementing Rules and Regulations (IRR) in collaboration with the Accounting and HR Heads. (4) have the memo announcement be signed by the President. (5) Disseminate through email the approval and the details of the IRR. (6) the applicant employees  to be interviewed by the HR Head and the release of the scholarship grant fund will be through the Accounting Head. (7) Periodic review by the CSR Committee of the grantee's performance every end of the semester, for their next semester's grant to be approved, to be conducted all throughout the duration of the scholarship until such time that the employee finishes his/her degree. (8) Have the grantee sign a contract that they will serve the company for another three years to cover the expenses for their  scholarship grants.

In the final analysis, the total CSR of a company should make effort to make a profit, follow the rule of law, be ethical and at the same time be a good corporate citizen. Since IDESS is already engaged and has started its philanthropic giving externally to the student cadets of the maritime schools in the Philippines, then the phrase " charity begins at home" will be highly appreciated by its employees  as soon as the approval of this new CSR initiative of giving scholarship grants  to deserving and qualified employees is announced and executed.

PNOC Energy Development Corporation

The Philippine National Oil Company Energy Development Corporation (PNOC EDC) was a subsidiary of the  Philippine national Oil Company,  created in 1976  to provide viable solutions to increasing   the nation's  potential  to produce indigenous energy while diminishing   its dependence on imported  fuel.

Paul A. Aquino, CEO and President of PNOC EDC
Photo Credit: www.geni.com

The CEO and President of PNOC EDC was Paul A. Aquino. He was the brother of former Senator Benigno "Ninoy" Aquino, Jr., and uncle of Benigno "Noynoy" Aquino, III, who served as the President of the Philippines from 2010 to 2016. Paul is also the father of the present Philippine Senator Paolo Benigno "Bam" Aquino, IV.

PNOC EDC was the Philippines' largest geothermal producer and the acknowledged global leader in wet steamfield technology. The company provides  for about 60% of our nation's  total installed geothermal energy capacity, supplying fuel to  12 power plants. One out of every eight Philippine households get its electricity from the company.

The firm considered itself as part of the communities where it does business  and participated in their development. The company ensured  balance between its operations and the  community interests with strong Corporate Social Responsibility (CSR) programs on environmental protection as early as 1978  and local community development by 1987.

From 1992 to 2005, it has paid P1.6 billion in royalties  to the local government of its host communities.  A total of P497 million went to the funding of local livelihood, electrification environmental,  and other related  developmental projects.

The CSR case of the PNOC EDC was one of the cases discussed during our De La Salle University, Master of Business Administration class on Leadership, Ethics and CSR. This case is also of interest for me as currently, one of my clients is the other subsidiary of the PNOC which is the PNOC Exploration Corporation (PNOC EC). According to their website (www.pnoc-ec.com.ph),   the  PNOC EC is the upstream oil, gas and coal subsidiary of the state   owned Philippine National Oil Company. A government  owned and controlled corporation, the firm was incorporated on April 20, 1976 and is mandated by the state  through the Department of Energy to lead the  exploration, development and production of the Philippines' oil, gas and  coal resources.

The PNOC EDC case was an equity issue which started when a staff  from the head office at Bonifacio Global City in Makati  wondered aloud if the P600,000 being considered as budget for the energy camps to be run in 2007 for the teenage children in the host communities of the company's project sites could be spent instead for the benefit of the firm's workforce rather than for other people.  Another employee  remarked " after all, charity begins at home" and also felt that PNOC EDC  is spending too much for the people around the company's geothermal sites.

The CEO and President, Paul Aquino  rationalized: "But which is home? Is home what is within the confines of these walls,  or this building within the PNOC complex here in Fort Bonifacio?
Doesn't home include the communities where the company draws energy? The communities have given us so much of their natural resources, it is important that we share some of our own resources with them. True, P600,000 is considerable. But we should not forget that is it only a fraction of our total gross. Besides, if we used the amount for employee benefits, it would be divided among so many employees and the benefit that each employee would get would be a measly sum. But the same amount spent for the camps organized for the community folk would mean a lot to them. In most cases, there is no government where our geothermal plants are. In those places PNOC EDC has become the government."

Since 2004, the firm has been running energy camps  and the  pilot camp was set up in Dumaguete.  The first batch of campers consisted of 16 boys and 16 girls, all children of employees. The staff of the Community Partnership Department (CPD) handles the camp with help from employee volunteers. The participants  engaged in sports and in the routine chores of daily life. Physical activities included hiking, rappelling, swimming and sports like tae kwon do, volleyball and basketball. Lectures on the environment, nature trips and tree planting were conducted to show campers the value of environment protection.

Campers were made to interact with local farmers and townsfolk to give them better understanding  of how the community create  sustainable livelihood programs while taking care of  the environment. A tour and lecture  on the geothermal plants and its operations were conducted  to impart to  the participants  the value of clean and renewable energy. The day was highlighted  by an amazing race around the camp. The program took 12 days.

Due to the success of the pilot camp,  in 2005 the firm opened 5 camps for 48 children from the host community with a new team of employee volunteers who took over running the camps.

In 2006, the activities were conducted for a 10 days to include ballroom dancing  and  fine dining to  improve the  social graces of the campers.  Upon  return to their respective schools, the participants shared their fun stories and great learning experiences which inspired their teachers to request for invitations to go to the camps. Thus, on May 2006,  a five day parallel  camp activities   were conducted for the teachers,  with total expenses amounting to P400,000.

After three energy camps and other CSR programs conducted  by the firm, some personnel at the head office began questioning the  wisdom of providing subsidy for the camps.

As the energy camp is the brain child of Aquino, who wanted to initiate a program that would ensure fun and  experiential  learning for the youth, Aquino then thought of  getting the buy- in of the PNOC EDC head office employees by including and sending also their children to the energy camps to address the inequity issue. He said that, " we envisioned a program where teenagers can learn about life, the environment and geothermal energy as they all have fun. All these, we hope that they can pass on to others when they go back to their families and communities."

Energy Camp 2007 - Batch 1 of PNOC-BACMAN Energy Camp held in Bacman Geothermal Production Field last April 2007. Photo Credit: Manny Ferrer

Through this move of  Aquino,  he was able to hit two birds with one stone by giving back to the community in their project sites and by ensuring equity between the home office and the plant sites. He was able to explain well to all the stakeholders the value of sharing their blessings not only within the firm but also to the townsfolk at their community project sites. The children coming home from the energy camps got to know the people from the project sites, experienced how good the PNOC EDC as a company and brought good will to both the children in the community and the children of the head office employees in Manila.

On November 29, 2007, PNOC EDC was fully privatized after the successful sale of 60% of its controlling stakes and  and sold to the  Lopez-led group of Red Vulcan Holdings Corporation  with the highest bid of P58.5 billion. It is now known as the ENERGY DEVELOPMENT CORPORATION.

Shell in Nigeria: CSR and the Ogoni Crisis

Shell logo
Source: http://www.logodesignlove.com/shell-logo-design-evolution

One of the Corporate Social Responsibility (CSR) cases  that we have discussed during our Leadership, Ethics and CSR class at the DLSU MBA is the case of the Shell in Nigeria: CSR and the Ogoni Crisis.

My personal definition of corporate social responsibility is sharing the  fruits of  your labor, initially within your own organization and sphere of influence and  then to the other people in your community.

A more sophisticated definition of CSR is shared by the Financial Times wherein it defines corporate social responsibility  as a business approach that drive change towards sustainable development through the delivery of economic, social and environmental  advantage and benefits for all stakeholders

This case is very interesting for me personally as one of my current top clients  is  Shell Philippines Exploration BV (SPEX). According to its website (www. shell.com.ph), Shell is an integrated energy company that aims to meet the world's growing demand for energy in ways that are economically, environmentally and socially responsible. SPEX draws its expertise from an extensive global experience in deep water oil and gas exploration and production.

This case is about the CSR  case of the Shell Petroleum Development Company of Nigeria Limited  (SPDC). According to the website of the  SPDC (www.shell.com.ng), SPDC is the pioneer and leader of the petroleum industry in Nigeria. It has the largest accreage in the country from which it produces some 39 percent of the nation's oil. The company's operations are concentrated in the Niger Delta and adjoining shallow offshore areas where it operates in an oil mining lease area of around 31,000 square kilometers.

In this case, there were environment and human rights issues. On environment  issues: there were reported contamination of drinking water,  gas flaring, oil spills and deforestation. On human rights issues: there were reports of  employee harassment, human detention, complicit in the violation of due process, and extra judicial  executions. Thus, how should Shell redeem  its good corporate  image
based on the the above mentioned issues it was involved in?

SPDC'S Nigerian content development workers inspecting natural gas flow.
Photo credit: www.shell.com.ng

Facts of the case:

The Oil Industry in Nigeria

 Nigeria is the biggest oil producer in Africa and  ranks no. eight in the world. Commercial quantities of oil was first found in Nigeria in 1956. Since then, its crude oil output has been  two million barrels of crude oil a day. This has provided 80 percent of federal reserves and 90 percent of forex for the government since 1970's.However, under a military rule, politics became an exercise in organized corruption especially around the oil industry itself  where large commissions and percentage cuts in oil contracts resulted in politicians and military officers to amass unexplained wealth  while the greater number of the population fell deeper below the poverty threshold level.

The Ogoni Crisis in Nigeria

On November  10, 1995 - Ken Saro-Wiwa, a world renowned  Nigerian author and spokesperson for the  Movement for the Survival of the Ogoni Peple (MOSOP) was   hanged in Port Harcourt, in  Nigeria, together with eight other Ogoni militants who lead the  protests against the oil industry. The " Ogoni Nine" had been tried and sentenced to death by  a special court  appointed by the military junta  whose procedures were not in accordance to  the  international standards of fair treatment through the normal judicial system.

The Saro-Wiwa case brought into the global  headlines a debate over the role played by the oil transnationals  in Nigeria that had already been raging for so many years.  Even before the executions, the oil industry had been criticized for its alleged support for successive military juntas
 that had scrapped plans of transition to civilian rule and stopped protest actions against the oil industry.

Shell in particular, the biggest oil producer in Nigeria had been the target of attacks  by the MOSOP, in a strategic campaign that successfully shut  down  Shell's production in Ogoniland in 1993. In turn Shell was blamed both nationally and  internationally as the military junta first brutally stopped
protests by MOSOP and finally tried and  sentenced to death the group's  main leaders.

Following the  death by hanging of the Ogoni Nine, on  December 15,1995, SPDC publicly declared that the  Nigerian Liquefied Natural Gas  (LNG) project construction, of which Shell is a 25.6 percent shareholder, had been approved and signed - a diplomatic coup for the Nigerian government. 

The following were the corporate strategic moves  executed by Shell  in the succeeding years  in Nigeria, in facing the challenge on demands   that it takes its business to the next level of CSR and
beyond maximizing profits and redeem its good corporate image in both  national and international level:

Shell in Nigeria

1977 March

• Royal Dutch/Shell Group espoused a  new Statement of General Business Principles which identified  five "areas of responsibility," to shareholders, to employees, to customers,  to external providers and to society.
• In the above mentioned document, Shell has included for the first time, a general commitment to human rights principles  and standards to  achieve sustainable development.
• The firm has  published the first yearly  report on the operations of SPDC looking at problems of environmental standards and human rights. Included also is the  initial group wide report on  safety, health  and the environment. 
• Shell  integrated in the company management procedures,  its commitment and support for fundamental human rights by  making it mandatory for the directors of the Shell group of companies  to submit annual reports  to Shell headquarters advising that they have complied with  the requirements of the Statement of General Business Principles.
• A " Management Primer"  on human rights issues was also prepared by Shell for distribution throughout the group

1998

• Shell  officially published its initial  social responsibility report. It "describes how we, the people, companies and businesses that make up the Royal Dutch/Shell Group are striving to live up to our responsibilities - financial,  social and  environmental." 
• The firm  also conducted the first of the many series of  workshops to discuss issues regarding the   environment and development  in line with  its Nigerian operations with local representatives and other interested parties in attendance.

1999

• May 1999,  Shell stated that it had engaged in "meetings and consultations, with a range of Ogoni groups and organizations" with the end view of   building "trust and understanding as a basis for addressing substantive issues of development and environmental management."
• In its 1999 report, "People, Planet and Profits: An Act of Commitment," Shell described the " Sustainable Development Management Framework" it had developed  and indicated that the organization  was developing a set of key performance indicators" on these  issues to enable stakeholders to compare the relative performance of companies in terms of environmental, financial and social indicators.

By the end of the  year 1999,   Shell brought out its Sustainability Report and stated that it was not complicit to any of the human rights abuses being a good citizen to the host country ever since it has started doing business in Nigeria.

Shell has also  made a lot of efforts to improve community relations with the local oil producing areas  of the Niger Delta by way of increasing  development spending and professionalizing the management and staff of all its  developmental  projects in the region.

Through  all of the above mentioned initiatives, Shell went on to become a  sectoral leader in the oil and gas industry, with regard to the development of  policies that pertains to  corporate social responsibility.

The Significance of Sharing our Blessings with Bahay Aruga (Service Learning - Post Event Reflection)

                                                                                   
Weekends are special  days that we all look forward to so we can be with our loved ones, family and friends. However, we should also find time to reach out to our other brothers and sisters in Christ and be men and women for others.

On Sunday, June 25,2017 was the  appointed "special day" that our DLSU MBA group for our Leadership, Ethics and CSR class converged  as  a team to share our blessings at Bahay Aruga in San Marcelino Manila.

Our DLSU MBA Team.
 First row, from left to right: Jennilyn, Zyrine, Marichu, Anne, Salia, Josh. Second row, from left to right: Liza, Mark and Apryl.

Bahay Aruga is a half-way house for pediatric cancer patients. Bahay Aruga  is the vernacular for shelter care. This is a place opened  because of the good heart of the founder, Ms. Mayette Bonilla. As Ms. Bonilla was not able to share her detailed stories about the founding of Bahay Aruga, I have gathered from  an article in the Manila Bulletin dated January 3, 2016,  by Monch Misagal that " It was Bonilla's exposure to a few relatives who succumbed to cancer that got her into thinking of putting up Bahay Aruga. Her niece and nephew died of brain tumor; a cousin died of breast cancer; and she lost her sister -in-law to leukemia. Before establishing Bahay Aruga, Bonilla was a regular donor of medical supplies and equipment to government hospitals and health centers. After she opened that facility two years ago, she relied on the Lord to help her meet the daily expenses and challenges."

Our DLSU MBA Team with family and friends joining us in our Service Learning Activity at Bahay Aruga.

During our "special day with the kids" Ms. Bonilla was busy with some urgent matter, thus we proceeded  at once to start the program with our DLSU MBA Team of nine classmates who also brought three friends, one daughter and one sister to help us in this sharing.

Here are the reflections of my team members as shared in our activity video:

Jennilyn: " The SL activity made me better appreciate life, especially the second life God has blessed me with."

Josh: " Nothing is comparable to what the parents of a child with cancer are going through. Truly blessed to have a day with Bahay Aruga family."

Mark: " It is more than the time spent but how we spent moments of our life to be with them and I think I just touched some of angel's hands."

Marichu: " It is not just the tangible gifts that you give but it is the joy in their hearts that you bring in .... Bahay Aruga experience was indeed a mission of extending the  young children's happy moments. #MissionFulfilled #HappytoServe"

Zyrine: " Spending time with the kids at Bahay Aruga made me realized that we should make time to do such activity more often. Happy to see cheerful and hopeful kids."

Liza: " We have our burdens which turns into blessings. At first sight it might be seen oblique but God is working towards our renewed life with Him. Keep the faith."

Salia: " This beyond words, let's continue helping the kids in our own little way."

Anne: " I was amazed by the strength of spirit and joyful hearts that our little friends at Bahay Aruga have shown us during our special day with them.  I will continue to pray for their healing and early recovery so they can truly be happy with their loved ones."

The DLSU MBA Team with the kids and their families.

Significance of the Games for the Kids:
The games that we have conducted for the kids
signified our heartfelt wishes and prayers

The Games Team posing for the camera with the game's winner.
 Standing from left to right: Sahlia, Anne, Liza and Marichu

for them to live a happy and memorable
lives. The games and the prizes that we have brought  were all meant for the children to enjoy and have fun. We know that they are in pain and are suffering because of the serious ailment that they have. But because of the joy and happiness that we have given them on that special day with them, we know  that even for a moment, they have forgotten about their conditions and have appreciated the time that we have spent with them. Likewise, we consider it a privilege for us that they were available to meet them personally and have fun with us especially those who are celebrating their birthdays in June.

The healthy snacks and cake served to the kids.

Significance of the Healthy Snacks and Birthday Cake: The healthy snacks that our Food Team prepared where all well thought of. We served bread slices with strawberry jam, fresh bananas, slices of cake and juices. All of these signified that we wish them healthy long lives, free from sickness and sufferings. These snacks also offers them a refreshing and healthy choice of food as we saw boxes of instant noodles in a nearby area.The birthday cake which was donated by one of the generous friends of one of the team members, signified long life for all of them and that we want them to continuously celebrate their birthdays until they reached their  old age. We want them to  count the many long years that they will still be enjoying together with their loved ones, family and friends.

Gardening Activity

Significance of Planting Activity: Ms. Bonilla requested for our final activity to be the planting of  vegetables for the vertical garden.  She wants us to plant vegetable seeds with the children so that we can have additional interaction with them. She wants the kids to experience how to tend and grow a garden while they are at Bahay Aruga. This signified hopefulness which all of us wants to leave with the children. We taught them how to plant the different vegetable seeds and then water them afterwards. We told them that they have to take care and water the seeds everyday. If they do this everyday then the seeds will grow and they can harvest and cook them. This will give them something to look forward to and remove their minds from their worries.

All of these activities were very significant to all of the team members and the children as these enjoyable activities bonded us together and the memories that were created will be in our hearts forever. Hopefully God will grant all our hearts wishes and prayers for all of our new small friends to be healed and live normal happy lives once again. May God bless us all!

Our Team's Donations

Our team has prepared and compiled a video of our sharing and reflections. Here is the link:
https://www.youtube.com/watch?v=E4v8rDmY3fM

Firestone's Tire Recall

                                                 

Harvey Samuel  Firestone , Founder of  Firestone
Tire and Rubber Company
Photo credit:https://en.wikipedia.org/wiki/Harvey_Samuel_Firestone 

The Firestone's Tire Recall case's central point is on ethical decision making during a  company crisis and our DLSU MBA BUS560M-2017 case team  was assigned to be the Interrogating Group. Here are the highlights of my  reflection on the case analysis of our team.

In 1900,  Harvey Firestone established the Firestone Tire and Rubber Company while Henry Ford founded  the Ford Motor Company and started doing business with his Detroit neighbor, Firestone in 1906.

Both companies became major industry players in their own fields, with Firestone later on merging with  Bridgestone Americas Inc., a company that supplies tires for  motorcycles,  light trucks, vehicles for passenger, commercial, off road and  agricultural purposes. Ford on the other hand became a   global auto manufacturer and owner of premium and luxury vehicle brands such as Ford,  Volvo, Lincoln and Mercury.

In 1978, the largest tire recall  in history happened wherein  Firestone  recalled 14.5 million tires  and paid $500,000 fine for concealing safety problems.

Furthermore, in early 2000, the National Highway Traffic Safety Administration (NHTSA)  started to take action on complaints of Firestone's tire  tread separation most of them on Ford Explorer sport utility vehicles (SUV). On August 9, 2000, a recall of  6.5 million tires was announced by  both Ford and Firestone.

Henry Ford, an American industrialist and
 founder of Ford Motor Company
Photo Credit:https://en.wikipedia.org/wiki/Henry_Ford

On our SWOT Analysis.Ford's Strengths: Ford has a strong position in the US market; Ford has a good financial performance; Ford has a significant growth in China;

Firestone's Strengths: It has a well established brand name; Its products are well diversified.

On Ford's Weakness: It had a high cost structure; It has poor performance in European sales; It has weak environmental records.

On Firestone's Weakness: It has limited market share; It was known in the past for its largest tire recall in history at 14.5 million tires in 1978; the tire recall  has weakened the financial position of the company.


On Ford' s Opportunities: It has strategic partnership with companies needed for its production.
On Firestone's Opportunities: Globalization; Growing initiatives in promoting pro-environment friendly  products.

On Ford's Threats: Rising raw materials prices; Increasing competition of car dealers; Government regulations are becoming more strict  and complex;

On Firestone's Threats: Government regulations are becoming more strict and complex; Increased competition.

Our  group's statement of the problem was:  How could Ford and Firestone manage the crisis on their product's safety issues ethically?

Our objectives are as follows: To be able to manage the crisis on the  safety features of the company's products; To rebuild the  trust of their customers and general public; To identify the issues resulting from unethical practices in their processes; To  build continuing trust and  confidence with the key stakeholders.

Organizational behavior: Both companies are not admitting to any fault and they are trying to save their own companies from the  growing issues.

Business Ethics: It is clear that there is violation of good business ethics by both companies. They neglected certain early warning  signs about their respective products which could have been prevented if they addressed the early signs. Moreover, the responsibilities that were not  shared by Ford  and Firestone affected their businesses and resulted to loss of customers  and loss of trust for the partnership of both companies.

For the best alternative course of action (ACA): We highly recommend the: The total recall of the defective products, collaborate with each other in designing safer products and structure after sales  service.

Pros: This ACA could possible prevent the occurrence of the accidents to the customers; Trust and confidence to the companies by its customers will be regained. No further issue affecting the companies'  name and  reputation; Total quality of the products will be assured and monitored.

Cons: Conflicts may result due to diversified opinions; the companies may need to put a large amount of investment into research and development; Total recall would mean additional cost to the company; Development of new designs to replace the recalled items  require additional costs or more.

Best solution, Recommendation and Conclusion: Both companies should do a  total recall of the defective products, collaborate with each other in designing safer products and structure after sales service.

Action Plan: Do the Plan - Do- Check - Action (PDCA) cycle or the  Deming Cycle.

Plan: Identify the  strategies for total recall of the products by both companies;Identify other necessary counter measures and legal implications of the action to be  taken; Identify the manpower availability to be part of the team designing safer products and structure after sales service.

PDCA Cycle
Source: The W. Edwards Deming Institute/
https://www.mindtools.com/pages/article/newPPM_89.htm

Do:  (1) Involve all the responsible leaders  and others in action  to be taken and the design of safer products  and structure  for an after sales service. (2) Provide proper training to all members of the team and revisit company policies  as to operations  and handling of the same issue. (3) Release an internal communication to all employees  and internal  audiences regarding  the new policies, if any, to make everyone be aware of the actions taken. (4) Develop series of scenarios that anticipate the crisis the organization may face, for exercise purposes,  and also consult with lawyers for any further implications.

Check: (1) Review the plan regularly; (2) Consider meeting between Ford and Firestone and ensure open  communication as to responsibilities and avoid blaming each other ; (3) Conduct surveys internally  and externally regarding result of the plan.

Act: (1) Strive for a timely and consistent flow of information to both internal and external audiences; (2) Continue collaborating with the stakeholders  and work on partnership between Ford and Firestone  to work on the action plan.

Since this is a cycle, if in case the changes were not successful, learning should be taken into consideration before starting the PDCA cycle again. Also while doing the each action in the cycle, continuous improvement remains to be a constant.