Question

(1) You work for the Worldwide Tire and Rubber Company as a marketing executive. You have just been informed that a new tire made by your company has a very slight chance of resulting in a blowout which could cause a serious accident. The Engineering Division assures you that the total number of people that could be hurt by this product defect is at most 5. The problem has been corrected, but there are still 5 million of your tires out there with this slight defect. The Legal Department asserts that it would be cheaper to do nothing and see what happens. If 5 people are injured, the maximum cost to the company would be approximately $20 million in settlements. On the other hand, a product recall of the 5 million tires in use would cost at least $500 million, would generate a huge amount of bad publicity that would hurt future sales, and the effect on the price of the stock would be devastating to shareholders. Certainly, there would be no money for executive bonuses. What is your recommendation? • The recommendation that I would make business wise is to inform everyone that purchased these tires that there may be a slight defect with their purchase and that there may be a small chance that something could go wrong. The company should give people a choice whether or not they want to exchange their tires out for new ones. When you look at it from an economic standpoint a total recall is not the best option. When you look at this from an ethical standpoint you may choose otherwise. Even if the engineering division advises that only 5 defects could take place. This means that 5 lives could be affected or more depending on if there are other people in the car or not. A lot of things come into play when looking at situations like this. I would say most companies would take the choice of not recalling the entire product so that is the recommendation I would make. (b) Same scenario as above. The CFO informs you that if you recall the product, the company will go bankrupt and 3,000 jobs will be lost. What is your recommendation now? • This is another reason why I say there a lot of things that go into making a large decision like this. So many different scenarios come into play when something like this happens. I think the best ethical business decision is to not recall the product. All those people out of jobs would not sit right with me. I think that the costs of people actually going in to change out there tires would be less than what it would cost the company to actually recall the entire product. (2) You work for the Wholesome Hamburger Company. You own 100 fast food restaurants in California. There is a big drought and people are being told to use less water. You know that it takes 1,800 gallons of water to produce one pound of beef [it takes 12 gallons of water to produce a head of lettuce, 2 gallons for one walnut, and 468 gallons of water to produce a pound of chicken]. You discuss this with the executives in your firm and they tell you that the way water is allocated by government, the company does not incur any additional expense: water will remain very cheap for business. The head of the company is soliciting ideas for its strategic plan for the future. What are your recommendations? • I think that the conversation that is being held with the executives helps out my recommendation here a lot. I think that the water being allocated by the government is what makes it easy for me. If the business does not incur additional expenses for the amount of water they use and the cost of it remains cheap then I say they should just go about their business. Although it seems like the water drought does not affect the company in a sense I am sure there are some things that the restaurant could do to help if they felt like being nice. One recommendation I would say that they could make is to maybe change the hours of operation. Maybe they could open an hour later and close an hour earlier. This reducing the amount of burgers that needs to be made and demanding less water to be used.

Answer 1

Ans:

In present case ethical issue get contradict with business benefit- If something is happen due to negligence of particular quality control department personnel, in that case first check was this incidence is result of error or total negligence. If it found its part of negligence then such responsible person must be refer for disciplinary action. If in case If it found its part of possible error due to reason beyond control or under limit of tolerance in that case updated in calibration to rectify such error with the help of research team.

As to maintain ethical side, the organization must think to spend $20 million for research & if any amount still remain then it must spend for quality training activity for employee. So that this investment will help to encounter quality issue at elementary stage.

As to mainting reputation- recalling tiers or 3000 job lost are artificial created fears, as in case of pressure vessel the safety factor maintain is 12 which may balance most of all possible error from engineering point of view. Hence its of least worried but it does not allow any freedom to intentionally develop artificial error for business benefit, it's an offence.