Most corporations exist only under the proper licenses and charter and operate within the limits of safety laws, environmental protection requirements, and other laws and regulations in the government sector. Well-meaning companies sometimes run afoul of stakeholders anyway but can take actions to appease them. Fina, Inc. established an oil refinery in Port Arthur, Texas. Over the years, subdivisions of attractive ranch-style homes grew up in the shadow of the Fina plant. Home owners became unhappy with the plant in their midst because of its noise and odor. How does Fina have to act in a socially responsible way by helping stakeholders?

Most corporations exist only under the proper licenses and charter and operate within the limits of safety laws, environmental protection requirements, and other laws and regulations in the government sector. Well-meaning companies sometimes run afoul of stakeholders anyway but can take actions to appease them. Fina, Inc. established an oil refinery in Port Arthur, Texas. Over the years, subdivisions of attractive ranch-style homes grew up in the shadow of the Fina plant. Home owners became unhappy with the plant in their midst because of its noise and odor. How does Fina have to act in a socially responsible way by helping stakeholders?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter23: Managing Vertical Relationships

Section: Chapter Questions

Problem 8MC

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In 2009, Detroit, Michigan experienced an aggressive recession as compared to the rest of country. With unemployment rates topping 15%, the city was faced with many challenges financially, economically, and socially. In addition to the financial challenges, the city was also experiencing political instability and corruption. Various major city officials were being investigated for fraud, bribery, and other criminal charges. Spirit Electric, operating as a natural monopoly, was the only company in the area providing electric services to Detroit households. Like many other companies, it was experiencing financial difficulties and could no longer continue without some intervention. This was mainly due to high operating costs, foreclosures in the area, and the fact that many households were not paying their bills. As a result, Spirit Electric came to a standstill in the latter part of 2009. Matt Green, Spirit Electric CEO, gathered the Board of Directors and determined that the company…