Reference no: EM132800489

Railway Development Co (RDC) was considering two options for a new railway line connecting two towns in the country of Zeeland.

Route A involved cutting a channel through an area designated as being of special scientific importance because it was one of a very few suitable feeding grounds for a colony of endangered birds. The birds were considered to be an important part of the local environment with some potential influences on local ecosystems.

The alternative was Route B which would involve the compulsory purchase and destruction of Eddie Krul's farm. Mr Krul was a vocal opponent of the Route B plan. He said that he had a right to stay on the land which had been owned by his family for four generations and which he had developed into a profitable farm. The farm employed a number of local people whose jobs would be lost if Route B went through the house and land. Mr Kurl threatened legal action against RDC if Route B was chosen.

An independent legal authority has determined that the compulsory purchase price of Mr Kurl's farm would be $1 million if Route B was chosen. RDC considered this a material cost, over and above other land costs, because the projected net present value (NPV) of cash flows over a ten-year period would be $5 million if Route A were chosen. The NPV would be reduced to $4 million if Route B were chosen.

The local government authority had given both routes provisional planning permission and offered no opinion of which it preferred. It supported infrastructure projects such as the new railway line, believing that either route would attract new income and prosperity to the region. It took the view that as an experienced railway builder, RDC would know best which to choose and how to evaluate the two options. Because it was keen to attract the investment, it left the decision entirely to RDC. RDC selected Route A as the route to build the new line.

A local environmental group, 'Save the Birds', was outraged at the decision to choose Route A. It criticized RDC and also the local authority for ignoring the sustainability implications of the decision. It accused the company of profiting at the expense of the environment and threatened to use 'direct action' to disrupt the building of the line through the birds' feeding ground if Route A went ahead.

Required:

1. Identify at least five (5) stakeholders being impacted by the local government authority decision to build a new rail line and briefly discuss the ethical issues that impact on each of these stakeholders.

2. From your perspective, what communication and leadership styles are evidenced by the RDC decision making process as outlined in the case study?

3. Assume you were part of the decision-making committee at RDC. Which railway route would you have recommended and why? Critically present the pros and cons of your alternatives.