Question

Ethics in Accounting and Business Question

My question focuses on Ford’s cost/benefit decision—If a firm meets the present regulations, do you think it is appropriate that they make decisions with cost/benefit analysis? Ford is clearly an extreme case, however there are other life-and-death decisions that are made in a similar way everyday—think, for instance, of how an actuary determines whether they should offer insurance to a very sick individual or to deny them coverage because it will cost the company too much? Are there times where this type of decision making is appropriate?

Answer 1

Ethics play a huge role in today's modern day world in running business. That is why there are often coflicts in the decesion a company has to make just as we saw in case of an insurance company . The business model of an insurance company is to cover the cost of the insured person but insurance is generally denied to the people who are sick or elderly . Conflict here is human ethics demand insurance to the sick people but the business model disallows insurance to such person due to increase in potential costs.

The same thing may be applicabe to Ford motors. For example inclusion of the air bags on pay per basis which is a necessity these days. The company may operate within the regulation but the ethics demand human saftey is must. But it should be understood that it is the business model that the company follows because of which it is surviving and it is not irrational to charge the customer for the extra services . Cost benifit analysis is necessary in todays world for the survival of the company. Each company has its own business model which needs to followed for it to live in the future only then the compnay will be able to provide services. Often times there will be conflict between the business models aand the human ethics but the company cannot be blamed for following the thw business model if those are within the regulation.