Question

Case Study: Engineering Ethics in a Technology Startup

Introduction

A business’s reputation and brand name depend upon the behavior and values of that
business. Businesses should be socially responsive, fair and just, with a positive
reputation for business conduct. Engineering entrepreneurs must confront ethical
challenges such as engineering design reliability and salespeople’s ethical standards.
Ethical decisions in sales include: intentionally misrepresenting a faulty product,
economic tradeoffs, short-term v. long-term gain. In general, a company’s beliefs and
values matter, along with business conduct and the representation of facts to customers
and investors.
This case study attempts to identify the specific ethical issues and obligations of an
entrepreneur and his employees in making decisions for his startup company.
The Case
Tina is a new hire at a startup company that produces very expensive security cameras
primarily for large organizations. Tina is hired to engineer and troubleshoot
malfunctioning cameras.
One day, one of its Fortune 500 customers reported to Tina that a number of the cameras
out of its last big shipment were not functioning properly. The customer also informed
Tina that the serial and revision numbers on these units were different from the rest of the
units.
Tina’s technicians inspected the cameras. Based on the results of their inspection, Tina
realized that her company sold units that were from a bad batch. Tina wanted to tell the
customer why the units failed but recognized that if she disclosed this information, the
customer would be eligible to receive replacement units at no additional cost. On the
other hand, if she blamed the failing units on something else, such as improper care, her
company would be able to charge the customer for replacement units.

As a recent hire, Tina decided to discuss the case with David, the owner of the startup.
David told her that she should minimize his company’s losses. Tina is concerned with her
job security. But she also wanted to be honest with this major customer.

Questions:
1. What are the ethical issues in this case?
2. Who are the actors and what is their obligation in this case?
3. Would the issue in the case have occurred if the actors followed the IEEE code of
ethics (https://www.ieee.org/about/corporate/governance/p7-8.html)?
4. What sections of the IEEE code of ethics would have been relevant in this case?
5. Should Tina’s personal beliefs play a role in this case? What about the personal beliefs
of David?
6. What should Tina do? Does she have a moral obligation to obey or disobey the owner?
Why?

Answer 1

1. The company sold the security camera units from bad batch to the customers which units must have not passed the quality test. Customers are paying money to the original product which is free from any fault/error and also post sales service from the supplier. First ethical issue from the above case is Comapny has sold some of the products from their bad batch though customers have paid money to original and fault free product. Second issue is, company might have sold faulty units by mistake but when they come to know that those units are from bad batch, their action should be to replace them with original products for free of cost to customers as a part of post sale service but company owner David still expects that Tina should try to minimize the company loss by not accepting company's mistake and charging customers for new units which is very unethical.

2. There are two actors in this case i.e. Tina and Company Owner, David.

Tina's obligation is, company must acknowledge its fault and need to replace the faulty cameras with original cameras without any cost

David's obligation is, Tina should think about minimum loss about company and should not acknowledge the fault so that customers will have to charge for new replaced cameras and company will not suffer from any loss.

3. The issue wouldn't have occured if the actors followed the IEEE code of ethics because according to IEEE code of ethics, it's very important to be honest and realstic while doing business and also assist collegues and co-workers to follow code of ethics.

4. From the Section 7 part A, IEEE code of Ethics 7.8, sub parts 2, 3, 7, 9, 10 have been relavent in this case.