world's top 10 chemical manufacturers are located (BASF, number one, Germany; Hoechst, number 2, Germany; Bayer, number 3, Germany; Imperial Chemical, number 5, Britain; Montedison, number eight, Italy; Rhone Poulenc, number nine, France; and Royal Dutch Shell, number 10, The Netherlands and Britain). The remaining three firms in the top 10 are located in North America (Du Pont, number four, United States; Dow Chemical, number six, United States; and Union Carbide, number seven, United States).
Sophisticated and capital intensive production processes are required for the manufacture of chemical products. These processes are costly in the consumption of energy and water, and they pose significant risks for the physical environment. Economies of scale are significant in the basic chemical industry. For that reason, most firms which survive in the basic chemical industry become very large firms.
In the basic chemical industry, the product output largely consists of commodities (Schneider, 1991). Commodities, chemical or otherwise, are, by definition, undifferentiated from those manufactured by competitors. Without a product differentiation characteristic, prices for the output of the basic chemical industry are governed by supply and demand balances to a much greater extent than is true of most other industries (Schneider, 1991).
The basic chemical industry has a poor public reputation for ethical conduct. Most of this reputation is due to harm caused to both the physical environment and human beings as a consequence of the conduct of chemical processing and manufacture, and by the response of the chemical industry to such damage. An ethical audit of strategy for the basic chemical industry is presented in figure 1, which may be found beginning below on this page.
Figure 1
Ethical Auditof Strategy
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