RE: Response to Arising Ethical Issue
The memo outlines the ethical dilemma faced by the company and how this dilemma is addressed. There are multiple dilemmas, but the memo focuses on one of the dilemmas.
There are claims that the unpasteurized Nutritional products have caused health concerns though the data has not been authenticated. In addition, there are reports from the health officers in the counties indicating that the health officers believe there is a direct link between the company’s products and the health cases. The batch numbers obtained by the company’s managers are linked to the products though they happen to be from a single day’s production. As a result, the company has two cases of food poisoning that are attributable to its products.
Moreover, the company decision to inform the public of its plans to recall its products through the retailers has put the company at pains. This is because, to some extent, the company is admitting liability and hence has to act.
The ethical dilemma facing the company is how to take a particular decision in the light of the allegations. It involves recalling the products, notifying the customers about the effects of unpasteurized products or admitting liability and taking care of those who have been affected by its products.
The ethical issue in this case is about admitting liability for the cases directly attributable to the company’s products. Admitting liability or not will be based on the two cases the company fears are attributable to its products. This is an ethical issue because it involves considering a range of actions and solutions together with their consequences. In addition, it involves making a decision on whether to deny liability, a factor that may be against the company’s ethics of ensuring safety of its products to the consumers. The decisions to be made are not clear cut, and the company, through the board, will have to call a crisis meeting even in order to address the problem. Ethical issues are hard to resolve due to their nature, and the effects of any resolution have to be thoroughly considered.
According to the virtue ethics, you may decide to admit liability. This will be based on the ethics of the company on responsibility, loyalty and honesty to its consumers (Robinson, 2003). In addition, the decision may be dictated by rights ethics. This is the company belief in the respect to the right of life for every person and therefore support and take responsibility for anyone who got sick as a result of its products.
However, admitting liability would have adverse effects on various stakeholders. This includes future customers who may not have confidence your products and others who may have confidence due to the brave act of the company accepting its liability. Investors would be wary to invest their funds with the company since nobody will want to be associated with a firm’s bad reputation and declining stock price. On the other hand, this may also prove to be non-consequential in the long run as evidenced by Toyota recalling its brands that were defective and had even led to accidents.
On the other hand, you may decide to deny liability. This is because, of the reports that you have continued to receive on a monthly basis, none have turned out to be true of the effect of the company’s products. In addition, based on subjective relativism, you may decide not to admit liability and leave people to decide for themselves. As per this theory, what may be right for one person may not be right for the other (Robinson, 2003)? However, this would involve the company going against its morals of ensuring that its products are safe for consumption.
I would advise that you do not admit liability and go against the company’s morals in the short-term. Since people are uncertain about the actual health effects of the products, some will go on consuming the stocks they have at home while those who do not have stocks will be reluctant to buy. Comparing this with admitting liability, not admitting liability will be less expensive. This is because legal costs will not arise from people seeking to be compensated if the company does not admit and the company will not be forced to meet the hospital bills. This will give the company the opportunity to replace the retailers’ stocks with new ones so that the company can do further tests on the existing ones.
The company may have to meet some legal costs in the future if any case on trial proves to be true. However, the cost would not be as high as if the company admitted liability at the moment since cases in the future will be minimal. Though the other industries may gain some advantage as a result of the news, there is a grace period for you to determine the current cases. This will give you the chance to enhance products qualities and hence regain any lost ground. However, not admitting liability may set a negative precedent to other industries in the future even in clear liability cases.
This case involves the company’s foods dilemma of the health effects of the products as a result of few reported cases. The company has to decide whether to or not admit liability though both decisions have implications such as meeting legal costs either now or in the future. The company decision involves not admitting liability since the future costs will be cheaper compared to now.
William, A. A. (2000). Identifying, Resolving, and Managing Common Ethical Dilemmas in the Workplace: An Experimental Approach. Developments in Business simulation & Experimental Learning, Vol. 27, Stetson University.
Robinson, A. D. (2003). Ethics & Ethical Dilemmas, Introducing the Business Ethics Synergy Star-A Technique for Defining a Dilemma and Resolving it. Queensland University of Technology.