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- 10 Marks
Question
Wakanda Ltd is a listed multinational company which manufactures and sells fruit juice. Last year, Wakanda Ltd received criticism in the national press in Ghana and in other countries as a lot of customers were hospitalized after purchasing some of its fruit juice which was contaminated. This resulted in low patronage of its products and a huge fine by the Government.
The Board of the company believes in improving relationships with groups such as suppliers, customers, and employees in order to regain its reputation. It has come out with the following corporate social responsibility (CSR) initiatives in order to correct the shortfall in sales:
- Paying all bills of hospitalized customers and reducing prices of the products for customers.
- Sourcing high-quality raw materials from suppliers and providing suppliers with capital to produce more.
- Using efficient processes and motivating staff to give their best.
- Maintaining the highest standard of hygiene and complying with the standards issued by the Ghana Standards Board.
Required:
Assess the significance of the CSR stance taken by the Board.
Answer
Significance of Wakanda Ltd’s CSR Stance:
- Reputation Management:
- The CSR initiatives taken by Wakanda Ltd, particularly paying the medical bills of hospitalized customers, aim to restore and protect the company’s reputation. By addressing the health impacts directly and showing a commitment to customer well-being, the company seeks to rebuild trust and loyalty among its customers.
- Product Quality and Safety Enhancement:
- Sourcing high-quality raw materials and maintaining high standards of hygiene demonstrate Wakanda Ltd’s commitment to preventing future incidents. These actions address the root cause of the crisis and show that the company is serious about improving product safety and quality, which is crucial for long-term business sustainability.
- Supplier and Employee Engagement:
- By providing capital to suppliers and focusing on motivating staff, Wakanda Ltd is strengthening its supply chain and workforce. This ensures that the suppliers can produce high-quality materials consistently and that employees are dedicated to upholding the company’s standards, leading to better overall performance and product reliability.
- Compliance with Regulatory Standards:
- Adhering to the standards issued by the Ghana Standards Board not only helps in preventing legal issues but also enhances the credibility of Wakanda Ltd. Compliance ensures that the company meets all the required safety standards, which is essential for maintaining market access and avoiding further fines or penalties.
- Long-Term Strategic Value:
- The CSR stance taken by Wakanda Ltd goes beyond immediate crisis management and has long-term strategic value. By improving relationships with key stakeholders—customers, suppliers, and employees—the company is laying the groundwork for sustained business success. This approach helps in mitigating future risks and positions the company as a responsible and ethical market leader.
- Topic: Business ethics
- Series: MAY 2019
- Uploader: Theophilus