ID-number: 0986764Dilemma Workshop 1Course code and name:GRA 6038 – Applied Business EthicsHand in date01.03.2016CampusBI OsloIntroductionIn the paper, an ethical dilemma faced by a Nordic shipping company is presented. The company is using one of the harbours in the Far East which is about to be modernized. Although increasing the harbour`s capacity is appealing in terms of possible revenue growth of the company, it will involve tearing down houses of several thousands of the poorest citizens in the city the harbour is located in, with no alternative housing provided by local authority. What is more, the company has recently joined the United Nations Global Compact and has committed itself to strengthen its efforts in corporate social responsibility. Still it also has to consider possible deterioration in relations with the harbour management, which could lead to delays in shipping and losses in revenue, if the company takes any actions. The board of the company has to decide how to react to this ethical issue. The dilemma will be addressed by describing possible company`s responses to this ethical issue using Carroll’s theory of Corporate Social Responsiveness (Crane & Matten, 2010), UN Global Compact Principles on human rights (1 and 2), Navigation Wheel for two main courses of actions. Then it will be possible to choose the best option for the company and give recommendations. Company`s responses according to Carroll’s theory of Corporate Social ResponsivenessThe most established and accepted model of corporate social responsibility is Archie Carroll’s multi-layer concept, according to which the focus is on four main social responsibilities formed into a pyramid (Crane & Matten, 2010, p. 53). The key elements of the pyramid have economic responsibilities as basic layer, legal responsibilities, ethical responsibilities and philanthropic responsibilities as the top of the pyramid. The idea of corporate social responsiveness describes how companies respond to social concerns and expectations. It is the capacity of a company to respond to social pressures (Frederick, 1994). Archie Carroll delineated four “philosophies” or strategies of social responsiveness (Carroll, 1979): reaction, defence, accommodation, and pro-action.1. Reaction – the company denies any responsibility for social issues, for example, by claiming that they are the responsibility of government, or by arguing that the company is not to blame. According to this strategy, the Nordic shipping company will deny all responsibility for the local citizens since the decision maker is the harbour management, and leave the issue to the local government. The company will care about keeping and increasing its profits and can defend itself by appealing to the fact that moving to another harbour is costly and destructive to its business and that by remaining in the same harbour it will save and probably create more work places. If the company tries to negotiate with the harbour management not to let the houses to be destroyed, it may cause conflicts with the harbour management leading to problems in business. It may also lead to the harbour management decision to renew the houses and share the costs with the company that is not at all the one to blame for houses destruction. Therefore, according to this strategy, the company will deny any responsibility. In this case it is considering the Economic Responsibilities in Carroll`s pyramid (maximizing profit), it has no Legal Responsibilities since they are not violating any laws when they do not take action but it is not taking any Ethical or Philanthropic Responsibilities.