ABC Ltd. is a large transnational company having diversified business activities with a huge shareholder base. The company is continuously expanding and generating employment. The company, in its expansion and diversification programme, decides to establish a new plant at Vikaspuri, an area which is underdeveloped. The new plant is designed to use energy efficient technology that will help the company to save production cost by 20%. The company’s decision goes well with the Government policy of attracting investment to develop such underdeveloped regions. The Government has also announced tax holiday for five years for the companies that invest in underdeveloped areas. However, the new plant may bring chaos for the inhabitants of Vikaspuri region which is otherwise tranquil. The new plant may result in increased cost of living, aliens migrating to the region, disturbing the social and economic order. The company sensing the possible protest tried to educate the people of Vikaspuri region and public in general that how its Corporate Social Responsibility (CSR) policy would help overcome the likely difficulties of the residents of Vikaspuri region. In spite of this the protests begin and some of the residents decided to approach the judiciary as their plea before the Government did not yield any result.(a) Identify the issues involved in the case.(b) What can be suggested to satisfy Company’s goal and to address the resident’s concern.
What the examiner wants
Identify issues in ABC Ltd's plant project and suggest how to meet both company and resident interests.
Demand-wise check
- 1Stakeholders: company, residents, migrants, government, judiciary≈80 words
- 2(a) Issues: development vs local disruption, inflation, migration, cultural change, trust deficit, consultation≈80 words
- 3(b) Solutions: local hiring and skilling, community consultation, CSR aligned to local needs, infrastructure, social impact assessment, grievance redress≈80 words
Open in about 30 words and close in about 30.
Answer plan
Where marks usually go
- Siding with only one party
- Ignoring social licence
Draw this
- Stakeholder map: ABC Ltd, residents, migrants, state, court, with each one's main concern
Value addition
- LawSection 135 Companies Act 2013 mandates CSR spending.Companies Act, 2013
- ThinkerFreeman's stakeholder theory (1984) argues firms must address all stakeholders.Freeman, 1984
- ExampleSterlite's Thoothukudi plant was closed in 2018 after protests.Tamil Nadu, 2018
Mapped topper copies
Reviewed public-source references related to this PYQ. Same-syllabus references are labelled separately.
- Shakti Dubey · AIR 1 · Page 37 ↗Reviewed PYQ reference
- Aakash Garg · AIR 5 · Page 39 ↗Same syllabus reference
- Shakti Dubey · AIR 1 · Page 35 ↗Same syllabus reference
- Shakti Dubey · AIR 1 · Page 33 ↗Same syllabus reference
Links open original public sources. MainsBuddy does not host these answer sheets.
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