Babyplus+ is a multinational corporation engaged in manufacturing products meant for newborns. It is a very popular brand and the market leader for products like baby powder, oils, soaps, cereals etc. It also exports these products to many western countries. The company is known for its ethical conduct and high-quality products and hence, has an impeccable image in the market. In a recent random sampling and testing carried out by an independent firm, it was found that the powder made by Babyplus+ was contaminated by a chemical which is known to cause allergies and skin rashes in babies. When Babyplus+ was informed of this finding, it decided to conduct its own inquiry and formed an internal investigation team. The powder samples were tested in the internal lab of the company and it was realized that the findings of the independent firm were indeed correct. The fault was located in one of the machines which malfunctioned and resulted in contamination of the powder. The maintenance record of the machine showed that the regular maintenance of the machine is overdue for some time and this could have caused the machine to malfunction. To avoid the embarrassment and protect its consumer, Babyplus+ recalled the entire batch of the powder which was suspected to have been contaminated. However, by this time more than 30% of stock has already been sold to consumers. Many children suffered allergic reactions and severe rashes due to the use of this product. The entire story was covered by prominent media houses. The media presented the entire episode in a sensational manner, using pictures of children suffering from unrelated infections and warning parents of possible severe impacts of the use of powder on children. This created an atmosphere of panic and soon news started coming from all over the country blaming Babyplus+ for every discomfort, distress and disease of children. The government has also initiated an investigation in this case. Export orders of Babyplus+ were cancelled and the company lost market share in India for not just the powder but for all other products manufactured by it. No one wanted to risk the health of their newborn by using the products of Babyplus+ and the company suffered huge losses. In this situation, a new CEO is appointed to turn around the fortune of this company and win back the trust of the general public. On the basis of the above case, answer the following questions: a) Who are the different stakeholders involved in this case? Also, identify their interests/concerns. b) What should be the course of action of the new CEO to handle the situation at hand? Which ethical principles should guide his actions? Explain.

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