Business

IssueProblem Identification
GE has legally released polychlorinated biphenyl (PCB) in the Hudson River for decades before the substance was banned in 1977. The Environmental Protection Agency (EPA) has identified upper area of the Hudson River as a Superfund site in 1983. This classified the upper Hudson River as toxic and required cleaning. GE is identified as the major contributor to PCB dumping. This has not been contested even by GE. EPA developed a plan for clean-up funded by GE. GE is adamant not to take responsibility. A coalition of environmental groups supported the EPA plan. Some citizen groups opposed the plan. To achieve a compromise, the EPA entered into an agreement with GE for the use of performance standards at every stage of the clean-up to determine whether continuation to the next stage is justifiable. Environmental groups condemned this agreement as shady. (Carroll and Buckholtz 901-905)

The overriding issue is whether GE is responsible for cleaning the Hudson River. There are underlying issues. GE believes that it has no responsibility to fund the clean-up because PCB does not pose real harm to people. There remain differing expert opinions over the hazards of PCB. The EPA has considered PCB to cause cancer and affect the nervous system. However, there are no actual cases directly linked to PCB. The civilian groups also oppose dredging because this would stir up the chemical and cause more harm and criticize the plan as politicized. Environmental groups support EPAs declaration and PCB as an environmental hazard.

AnalysisEvaluation
All stakeholders have high stakes in the resolution of the issue. GE would either spend or save millions. The EPA would either receive commendation or criticism as the government and administration front liner. GE and EPA both hold high influence or power and comprise the parties whose actions would likely resolve the issues. Communities along the Hudson River stand to benefit from expected employment opportunities and development or health and other problems depending on the direction the issues may lead. Recreational firms and other businesses dependent on the Hudson River face closure or growth. Civilian and environmental groups stand to win or lose in their advocacies. While civilian and environmental groups also hold a certain degree of power, these can be moderated by the actions of GE and EPA.

Low InfluencePowerHigh InfluencePowerLow InterestStake

High InterestStakeCommunities along the Hudson River

Civilian Groups

Recreational Firms along the Hudson River Environmental GroupsGE

EPA
Balancing pitting interests is the challenge created by the stakeholders. GE does not want to create a precedent by accepting responsibility. EPA, which represents the government, needs to serve its functions to protect the environment and uphold social wellbeing but the government also recognizes the importance of business allies. Other stakeholders act to advance the urgency of resolving the issue to mitigate the adverse impact on them and create benefits.

GE has both a legal and ethical corporate social responsibility over the issue. Its legal responsibility is to comply with EPA directives in conjunction with court decisions on its actions and appeals. It has to comply with the performance-based plan. GE answers to the EPA and the courts over its compliance with this legal responsibility. GE has ethical responsibility to support the interests of communities affected by the closure of the Hudson River and people left unemployed after closing its plants. GE is not compelled to fulfill this ethical responsibility but inaction or ineffective action would adversely impact its business reputation.

GE stood firm over its lack of responsibility in funding the clean-up plan imposed by the EPA. It filed actions to suspend the plan. Afterwards, it negotiated with the EPA for a revision of the plan. On one hand, these moves intended to prevent a precedent for the imposition of further obligations on the company. On the other hand, the strength of clamor from environmentalist groups created bad publicity for GE. However, the issue has not died down. GE should have taken a proactive stand on the issue right from the beginning. This meant taking ethical if not legal responsibility but seeking the help of other stakeholders in completing the task. Doing so could have allowed the company to negotiate its financial liability without unnecessarily antagonizing the company with environmental and other advocacy groups seeking river clean-up.

Recommendations
Since GE is already spending a lot of money to stave off its responsibility, it can channel the cost towards the clean-up of the Hudson River. GE can address the issues by complying with the performance-based plan, which provides the company with some benefits. In the short run, GE can improve its public relations by complying with the performance-based plan, sponsoring private sector research on revitalizing the Hudson River and community development, and reporting its achievements. GE should directly initiate or support studies measuring improvements in the water quality of the Hudson River. The company can use the results to market its environmental performance (Fergusson and Langford 183). In the long-term, GE can reinforce its mission to build better lives by initiating environmental preservation and livelihood in the area. It can even launch a campaign to seek help in cleaning the Hudson River by allocating a percentage of product price tothis cause. By assuming responsibility, GE can optimize the situation to boost its business reputation, strengthen partnerships with the government sector and advocacy groups, and develop positive relations with the affected communities and the public. The risk is the creation of a precedent that could open GE to responsibility in other states. As a business risk, GE should again take a proactive position and plan its response. The issues will not go away and GE might as well face these strategically.