Case study #25 Each company has its own social responsibility, and it is the manager’s job to keep that responsibility. In the Peerless Starch Company of Blair, Indiana case, the president of Peerless Company John Ludwig has to make a decision between keeping the mill in Blair or closing it. So he asks Glen Baxter, a Union economist, to support the company’s plan to keep the plant in Blair open. Baxter disagrees with the decision. In the end, does Baxter have a case? Started with one mill in 1940, Peerless Starch Company rapidly rose to be successful. Although the company continued to grow, the plant in Blair did not. There were several issued with the plant in Blair. First, the plant needed four times as much labor as it should, because the mills’ structure did not fit for a modern operation. Second, the quality of the products was very poor, compared to its competitors. Basically, the company barely made profit because the mills in Blair lost a lot of money. There were two solutions: rebuild the plant, or shut down the plant. Ludwig wanted to rebuild the plant, because shutting down the plant would result unemployment in the town. On the other hand, the shut down of Blair was the only business solution. While Ludwig wanted to keep the plant open, Baxter disagreed. Baxter thought Ludwig had a responsibility not only to Blair but also to the whole company. While rebuilt Blair would maintain 2600 jobs, Ludwig ultimately sacrificed 8000 employees of the company and it would cost $25 million to rebuild. Based on Drucker, Baxter has a case and most today’s executives would agree. In Management, Drucker said, “ the manager is a servant. His master is the institution he manages and his first responsibility must therefore be to it (217). Performance of its function is the institution’s first social responsibility (218).” Similar to Baxter’s opinion, the manager of