CHAPTER 10 ETHICAL PROBLEMS OF ORGANIZATIONS 375 COMPANY: MCWANE, INC. INDUSTRY:
ID: 361926 • Letter: C
Question
CHAPTER 10 ETHICAL PROBLEMS OF ORGANIZATIONS 375 COMPANY: MCWANE, INC. INDUSTRY: MANUFACTURER OF WATER AND SEWER PIPES SITUATION McWane, Inc., in Birmingham, Alabama, is a privately held pipe manufacturer that has expanded aggressively over the last 30 years-mainly by purchasing antiquated plants and increasing profitability through what the company calls "disciplined management practices." Although the industry-melting metal and casting pipe-is inherently dangerous, McWane's drive for profits was so relentless that worker safety was sacrificed in the name of profits for the Mc Wande family, who own the company and answer to no shareholders. For a number of vears after 1995, Mc Wane accumulated four times more safety violations than its six major competitors combined! From 1995 to 2002, nine McWane workers were killed on the job and more than 4,600 workers were injured (out of a total of 5,000), many in particularly gruesome, maiming Tyler Pipe Company in Tyler,Texas-McWane reduced the workforce by almost two-thirds and demanded increased productivity from the remaining workforce. An inspector from OSHA, the federal regulator charged with guarding worker safety, described what was found at Tyler Pipe: "Many workers have scars or disfigurations which are noticeable from several feet away. Burns and ampu- tations are frequent. Throughout the plant, in supervisors' offices and on bulletin boards, next to production charts and union memos, is posted in big orange letters: "REDUCE MAN HOURS PER TON."2 accidents. At one acquisition- HOW THE COMPANY HANDLED IT After the New York Times and Frontline (a production of PBS) investigated and produceda shocking series-in the newspaperandon PBS stations-that exposed the horrific conditions at McWane, the company responded with a writtern statement denying allegations about its safety record. "We do not put production concems ahead of safety and environmental compliance," said company officials in a written statement to the New York Time and Frontline. That publicity prompted eries offederal investigations, which led to myriad indictments in several states (including Alabama, New York, New Jersey, Texas, and Utah).Among them wasa unt indictment charging the company with illegal dumping and other 25-cou environmental crimes; other counts charged the company with conspiring workplace safety and environmental laws and obstructing government ns by lying, intimidating workers, and altering accident sites. RESULTS operation in Texas and was fined $4.5 million. In June 2005, ound guilty of 20 environmental crimes at one of its factories in cWane pleaded guilty to environmental crimes committed at its Tyler Pipe Me McW August 2005, the company pleaded guilty to federal safety and
Explanation / Answer
Summary:
John Eagan's ACIPCO was founded on the trust and with a promise to run the business based on the "Golden Rule" that was nothing but the Environment and Employee friendly company. Therefore ACIPCO had the turnover rate of less that 1 percent whereas James Ransom McWane's industry was a result of a show off company whose main motto was to earn profit and be the number 1 among the similar industries. The fact can not be denied that once as a president of ACIPCO in 1915 J. R. McWane, who was responsible for modernization and expansion of the company was forced out by ACIPCO in 1921 due to unethical practices and started his own pipe business in Birmingham and also quickly became successful. He just wanted to be successful while keeping in mind only business. His company used to just show concerns towards environment and employee safety but in actual doing nothing for the same.
Stakeholders of the McWane Inc., can be actually blamed because sitting in the corporate offices people at higher level can not be just unaware of the practices followed in the manufacturing plant employee turnover rate of almost 100%. They should have definitely look into the matter and interfere with such unethical practices being followed in the company at the worker level. Just seeing the profit on the ground employee harassment can not be justified in any case and should always be dealt with strictness.