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Working with Non-Governmental Organizations: Schmidt Gifts and Novelties, Inc.

Please help with the questions based on the following scenarios:

Schmidt Gifts and Novelties, Inc. imports a product from a company in a developing nation. Schmidt promotes itself as a socially responsible and green organization. It provides good wages and benefits to its employees, recycle, and complies with all environmental regulations. It has never been cited by OSHA or the EEOC for its practices.

Recently, however, one non-governmental organization (NGO) has accused Schmidt of violating fair trade practices because only a small portion of the price of the imported products it sells actually benefits the women workers who manufacture the goods in the developing country where they reside. The NGO is making specific demands regarding fair trade.

An environmental NGO complains that Schmidt uses too much packaging, resulting in a waste stream and environmental impact for the consumer. The NGO wants Schmidt to reduce its packing waste by using recyclable materials or no packaging.

The media is aware of these concerns, but has not yet reported to the public. One writer has contacted the public relations department for comment, and Schmidt assumes there will be some media attention to these issues soon.

1) What specific demands were made by each stakeholder?
2 What issues must the company consider to address these concerns?
3) What are the NGOs prepared to do if their demands are not met?
4) What powers do these NGOs have?
5) What are the potential media reactions whether or not action is taken by Schmidt Gifts and Novelties, Inc.?
6) What stakeholders are affected by these demands?
7) What recommendations might be made by the stakeholders?

Solution Preview

1. What specific demands were made by each stakeholder?

NGO is a stakeholder in this case. Their demands include a reduction in waste and changing unfair pricing practices. The media is also a stakeholder, as they have become involved. Their demands will include answers to the current circumstances that have been identified by the non-governmental organization (NGO). Other stakeholders that have demands which aren't included are the employees, the company's management, the citizens due to the environmental damage taking place, and the company's customers. If the company closes, the customers and investors will be affected.

2. What issues must the company consider to address these concerns?

The company needs to consider each element involved in the unfair trade practices. Unfair trade practices are both unethical and illegal. The company must also consider the damage they're doing to the environment. Their public image is at stake, and they are also in a position where they could lose investors and customers once the media releases the conditions that are taking place. The company needs to consider how it will secure the resources needed (mainly cash) to change their packaging ...