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MG Rover Collapse Case Assignment Help


1. Set out the main stakeholders in the MG Rover business at the time of its collapse. How would you determine the relative importance of their stake?

2. Think about MG Rover's actions in the case in terms of Carroll's pyramid of CSR - which responsibilities was it upholding, and how would you say it was ranking them? Do you think this is appropriate or inappropriate in this situation? Could it have done more to treat its employees ethically?

3 Arguments for corporate accountability and citizenship emphasize the declining power of governments and the increasing power of multinationals. How would you assess the relative power of the main actors in the MG Rover case?

4 Who, if anyone, should take responsibility for preserving jobs at Longbridge - the company, its directors, the UK government, SAIC, the workers themselves? Or is unemployment such as this simply a ‘bitter pill' that workers have to take in the face of industrial restructuring away from heavy industry in developed economies?

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- Main stakeholders in MG Rover business at the time of its collapse

At the times of collapse of the MG Rover there are several stakeholders there in the organization and can be considered as significant part of the organization overall functioning. The most recognized stakeholders of the company are obviously the following, BMW, The government of United Kingdom. The Shanghai automotive Industrial Corporation, MG Rover employees - workers - vendors etc, Phoenix four and Nanjing Automobiles. Each of these stakeholders do have significant role and the relative significance of these stakeholders is decided by their attachment with the organization. The most significant stakeholders or MG Rover is the pool of the employees, workers and other entities of SCM. All of them do have dependency in the organization; their livelihood is totally dependent on the organizational wellbeing. Their complete efforts are with the company and hence they are the first significant stakeholders. The second is the UK government their interventions are mainly concerned with then election outcomes however still their actions are mainly focussed on to save their own face. Phoenix 4 is the important stakeholder which worked well to bring down the total losses in the organization. The total losses are brought down to about less than 10% from 1999 to 2003 by its focussed action strategies. Other stakeholders significance and existence came into existence only with the interventions of the rest of the stakeholders. The stakes and property rights are sold to SAIC and Nanjing automobiles. BMW has investments still with MG Rover and the sustenance and operations of MG Rover matters to BMW as well(Bailey et al.,2010).

- CSR responsibilities of MG Rover

Carroll Pyramids indicate set of responsibilities in terms of obligations to the organization for calling it as socially responsible organization. The first of that is the economic responsibility; it can be said like the company has the necessary economic stance only when it fulfils its economic obligations which mean being profitable and meeting the expectations of the stakeholders trust kept in that. The legal obligations include abiding the law and following all the principles as enforced by law on the company and for its operations as well.

Ethical responsibilities of the organization will include ethical responsibilities like following the principles of ethics during its compliance with the organization norms. Also it is part of the Carroll CSR pyramid index that the company need to assure philanthropic interests as well.

Figure 1 Carrols pyramid of CSR

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There are several responsibilities there in the portfolio of the company at the time of its execution and it is not actually working in the right sense at that time. Firstly the company has economic responsibilities to fulfil like to remain profitable, to safeguard the interest of the company, to pay the salaries and wages to the employees etc. At legal front the responsibilities of taxpaying and obliging with the legal responsibilities etc were not actually met at that time. Ethical aspects wise the company is in paradoxical scenario.  The company has no interest in the philanthropic aspects(Carroll,1991).

Corporate social responsibility is the obligation and the definite activity that any organization needs to achieve in its core part of functionality. There is need for the financial obligations compliance along with the inclusion of legal, ethical and philanthropic traits as applicable in the case. However Government body as stakeholder does not seems like done its part of its duty to ensure either CSR or social responsibility of MG Rover. This is a typical demonstration of the declining power of influence on the organizations as well it will also indicate the increase in the power of the multi-nationals. Nevertheless the relative importance of these stakeholders can be rooted and evaluated by their contribution to the assurance of letting these things happen in the organization and in assuring the responsibility be fulfilled(Berkeley et al.,2005). 

Well it is not duty but social responsibilities to preserve the jobs rather can be called as lives of thousands of employees and workers in the Rover’s Longbridge plant. There is considerable attention paid by several of these stakeholders in preserving the interests of the company and to safeguard the properties and employment at Rovers, however they are all failed. MG Rover has attempted to protect the company, there are attempts by UK government as well there are attempts by the Phoenix four as well to keep the condition of Rover better, however they all failed in up keeping the condition. This cannot be said at anytime that the unemployment is just a bitter pill that workers need to take up in the face of the industrial restructuring or anything else. Ideally every human being do have right for a decent life and job. If they could not get what they expect, then it is mere case of failure of the system and the stakeholders and there is nothing for it to do with the organizational functionality. Hence considering all these factors it can be said that the  future of the company is resting in the hands of the SAIC and Nanjing and they need to decide the fate of the company. However still it is an obligation and the attempts of the companies will be decided by their CSR standards(Bailey & Kobayashi,2008)

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