Q: Parmal is a small but underdeveloped district. It has rocky terrain that is not suitable for agriculture, though some subsistence agriculture is being done on small plots of land. The area receives adequate rainfall and has an irrigation canal flowing through it. Amria, its administrative centre, is a medium sized town. It houses a large district hospital, an Industrial Training Institute and some privately owned skill training centres. It has all the facilities of a district headquarters. A trunk railway line passes approximately 50 kilometres from Amria. Its poor connectivity is a major reason for the absence of any major industry therein. The state government offers a 10 years tax holiday as an incentive to new industry.
In 2010 Anil, an industrialist, decided to take benefits to set up Amria Plastic Works (APW) in Noora village, about 20 km from Amria. While the factory was being built, Anil hired the required key labour and got them trained at the skill training centres at Amria. This act of his made the key personnel very loyal to APW.
APW started production in 2011 with the labour drawn fully from Noora village. The villagers were very happy to get employment near their homes and were motivated by the key personnel to meet the production targets with high quality. APW started making large profits, a sizeable portion of which was used to improve the quality of life in Noora. By 2016, Noora could boast of a greener village and a renovated village temple. Anil liaised with the local MLA to increase the frequency of the bus services to Amria. The government also opened a primary health care centre and primary school at Noora in buildings constructed by APW. APW used its CSR funds to set up women’s self-help groups, subsidize primary education to the village children and procure an ambulance for use by its employees and the needy.
In 2019, there was a minor fire in APW. It was quickly extinguished as fire safety protocols were in place in the factory. Investigations revealed that the factory had been using electricity in excess of its authorized capacity. This was soon rectified. The next year, due to a nationwide lockdown, the requirement of production fell for four months. Anil decided that all employees would be paid regularly. He employed them to plant trees and improve the village habitat. APW had developed a reputation of high-quality production and a motivated workforce.
Critically analyse the story of APW and state the ethical issues involved. Do you consider APW as a role model for development of backward areas? Give reasons. (250 words) (20 marks)
This is a case in which Anil, an industrialist, has contributed to the development of a backward area, and at the same time made business profitable. By setting up industry in a backward area, he got the benefit of ten years of tax holiday and at the same time helped the development of the area by setting up Amria Plastic Works (APW). Many corporates sacrifice their social responsibility by focusing solely on profit.
APW can be considered a role model for the development of backward areas for the following reasons:
·The company hired the labourers locally and trained them for the requisite skills in the local skill training centres. This helped the local population build capacity and provided local employment.
·APW used the CSR funds appropriately to provide education to children, employment to local woman etc. that not only improved the social condition of the local population, but also built trust between the business and the local population.
·When it was found that the factory was using excess electricity, the company immediately accepted its fault and rectified the problem. This shows that a good company must work according to the law.
·At the time of lockdown, the company did not fire the workers, but rather used them for planting trees and improving the local ecosystem. This shows that a good company should not be short-sighted, but must be focused on building long-term relationships and sustainable environment.
APW has demonstrated that a good company must focus not only in making profit, but also on fulfilment of its social responsibility and building trust with the local population.