Business Ethics
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Case2ThapaPP1.docx1
BUSINESS ETHICS 2
BUSINESS ETHICS 2
Step 1: Ethical Issues
One ethical issue in the case is whether to follow the broader view or narrow view of corporate social responsibility. As explained in “Chapter 5 Corporations’, the narrow view of a company’s corporate responsibility is its obligations to the shareholders and the corporation’s owner. That means that the corporation’s only responsibility is to generate profits. A broader view, on the other hand, extends the company’s obligation to include all stakeholders, employees, consumers, and society where the corporation operates. In this case, the narrow view is to consider only the legal considerations. According to Allen, it is perfectly legal to sell the three-wheel version in Brazil. By just focusing on the legal considerations, we will be able to produce the 3-wheel version and cut manufacturing costs and, eventually, lowering products’ prices. By having affordable products, the company’s sales will increase and so the profits. The wider view, on the contrary, is to consider the moral responsibilities of the company in consumer safety. That is, to consider the negative consequence of producing the 3-wheel version on consumer safety.
Another ethical issue is whether to comply with the Consumer Product Safety Commission (CPSC) regulations or do what’s just best for the company’s owner and shareholders. We know from ‘Chapter 6 Consumers’ that CPSC was passed in 1972 by the Consumer Product Safety Act (CPSA) to protect consumers from senseless risks. Complying with the CPSC regulations means not considering the production of 3-wheel version as it is not safe to the public. On the other hand, doing what’s just best for the company’s owner and shareholders means ignoring the dangers caused by the 3-wheel version and do what benefits the shareholders and the company’s owner. That is, to make the 3-wheel version, thereby, reducing manufacturing costs and lowering prices and eventually increasing sales and profits.
The other ethical issue is whether to abide by the principle of wellbeing or do what’s just best for the company’s owner and shareholders. The principle of wellbeing is among the three principles (wellbeing, fairness, and freedom) which are expressed in the Bill of Rights for Consumers that President Kennedy announced in 1962. The rights include the right to be protected from dangerous products(well-being), among others. By complying with the principle of wellbeing, this means that I will not allow the production of the 3-wheel version because they are not safe to the consumers. By doing what’s just best for the company’s owner and shareholders, this means that I will allow the production of 3-wheel version for the overall benefits of the shareholders and the company’s owner.
Another ethical issue is whether to consider the legal liability of the company(manufacturer) or just do what’s best for the shareholders and the company. It is explained in ‘Chapter 6 Consumers’ that the CPA enforces strict liability on producers of faulty products for damage created by the products. Individuals can sue the manufacturer if they are harmed by the faulty products. By considering the legal liability, that means that I will do the right thing to protect the company from being sued by customers for compensation. On the contrary, by doing what’s best for the shareholders and the company’s owner, that’s mean that I will fulfil the interests of both the shareholders and the company.
Step 2: Key Stakeholders Analysis
Manager of the Brazilian Operation (Decision-Maker)
1. I need to make a decision that will consider the need of every stakeholder.
2. I want to make a decision that is based upon sound reasoning.
3. I hope to find a solution that will effectively solve the issue.
4. I do not want the company to produce the three-wheel version even if it is perfectly legal in Brazil.
Marcus Allen
5. Allen want the company to reduce product’s prices.
Company
6. The company want to make profits
Shareholders
7. Shareholders want to maximize returns on their investments and minimize the risks of their investment.
Brazilian Consumers
8. Customers want safe products.
9. Customers also want quality products at affordable prices.
Brazilian Employees
10. They want to work with a profitable company for the purpose of their future remuneration.
11. They want to engage with a company that is more concerned with the wellbeing and safety of the customers.
Step 3: Decisions and analysis
Decisions
Decision #1: I will follow the broader view of corporate social responsibility. This means that I will consider the moral responsibilities of the company in consumer safety. That is, to consider the negative consequence of producing the 3-wheel version on consumer safety.
Decision #2: I will comply with the Consumer Product Safety Commission (CPSC) standards.
This means that I will not agree to produce unsafe products.
Decision #3: To add to that, I will abide by the principle of wellbeing. This means that I will ensure that our products uphold consumer safety and wellbeing.
Decision #4: I will also consider the legal liability of the company. This means that I will do the right thing to avoid being sued by customers for compensation.
Decision #5: I will conduct extensive research to find out how we can reduce product prices as it is the cause of the slowing sales growth.
Nonconsequentialist Analysis of the Decisions
Kindness(S): Warmhearted, considerate, humane, forgiving. Decision #1 and #3 indicate that I am considerate of others.
Lawfulness(S): Obeying laws and regulations; working to prove them. Decision #2 prove that I am ready to obey CPSC regulations and other related regulations.
Integrity(S): Consistency between our behavior and stated values; signifying the courage to do the right thing irrespective of the cost. Decision #5 indicates that I am willing to go the extra mile even if it will cost the entity additional money.
Honesty in Conduct (s): Avoiding dishonest conduct such as embezzlement, theft, etc. Decision #4 indicates that I am willing to engage in honest practices to protect our company from being sued for compensation.
Consequentialist Analysis of Decisions
Costs:
7. Decision #5: The cost and time of researching how to reduce products prices may negatively affect shareholders returns in the short run. Conducting the research personally may also need me to ignore other areas of my roles, thereby, leading to bad results in those areas, hence, poor returns to the shareholders.
Benefits:
1. Decision #1: Following the broader view indicates that I will consider all the stakeholders, not just the shareholders and the company’s owner.
2. Decision #2, decision #3, and decision #4: By complying with the CPSC, by abiding by the principle of wellbeing, and by considering the legal liability of the company indicates that I am willing to take decisions that are based on sound reasoning.
3. Decision #5: By personally conducting the research; I will come up with a better solution to the problem.
4. Decision #4 will guarantee that my company will not be sued for damages in the future.
5. Decision #5 will ensure I get an effective solution to address higher prices.
6. Decision #1, #2, #3, #4, and #5 will ensure customer safety, hence more sales and more profits.
7. Decision #1, #2, #3, #4, and #5 will also increase the company’s brand loyalty and reputation, hence more sales and more profits in the long-run.
8. Decision #1, #2, #3, and #4 will ensure customers get safe products.
9. Decision #5: Conducting the research will ensure we provide our customers with quality products at affordable prices.
10. Decision #1, #2, #3, and #4 will ensure customer safety, hence more sales, which means more profits for the company.
11. Decision #1, #2, #3, and #4 will indicate that American ATVs is committed to customer safety.
Analysis:
The benefits outweigh the costs in the long run. The decisions will result in greater benefits to all the company’s shareholders, the company, customers, employees, shareholders, and many others.
