GS4 · UPSC Mains

You are the chief executive of ABC Ltd., an automotive component manufacturing company. Until recently, all of your production plants were located in City X. However, the cost of production has risen, causing profits to decline. A number of factors have led to an increase in the production costs. First, the union representing the workers in your plant waged a successful strike resulting in increased salary and benefits. A second factor has been imposition of stringent environmental regulations. Shareholders are concerned about the declining fortunes of the company. Many of the competitors have moved their operations to less-developed cities, where the operating costs are less than in City X. ABC Ltd. is a major employer in the city where it is located, and you know that a plant closure will cause economic dislocation in the city. 20 Given the situation, answer the following questions: (a) What are the ethical issues involved in this case? (b) How can the interests of different stakeholders be reconciled in this case?

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