Inter Office Memo
Background:
Our quality assurance department informed about the elementary toys that did not pass the quality test due to small quantity of lead in the toys. These toys are produced to be supplied to the elementary schools and will be used by young children. The quantity of lead identified in the toys is slightly above than the legal standards set under the USA laws. According to Consumer Product Safety Commission, the acceptable quantity of lead in children products is maximum 100 parts per million (ppm)(US:CPSC , 2011). Our company has already scheduled a large shipment of elementary toys that will be shipped by the weekend to different schools located in South America. Estimated cost of reproduction and packaging of the products is around USD 100,000.The issue requires urgent attention and quick action.
Alternatives
The objective of this memo is to discuss the problem that company is facing due to metal whistle identified during quality check. This memo is presenting possible solutions to the problem of metal whistle without hampering the image of the company and at minimum expenses. The memo is three alternative solutions along with advantages and disadvantages associated with each solution. An effective business decision making process is followed to develop effective solution. In present competitive environment, it is essential that company take decisions by considering brand image, customer’s expectations, and social responsibilities and over and above country’s law and regulations.
Five steps decision making process starts from identification and description of the problem. Second step deals with information collection related with possible effects of the problem. Third step deals with analysis and evaluation of decision. Fourth step deals with selection of final decision, and fifth step deals with explanation of final decision and its impact on different internal as well as external stakeholders. All these five steps are utilized while evaluating various solutions and making final decisions.
Solution 1:
Company may ship the shipment as it is because the amount of lead in the toys is only slightly above than the limit specified by the authority under the law.
Advantages: solution one will enable the company to deliver products on time to its clients. By choosing this option company will also be able to save huge cost that is required for reproduction and packaging of the products. Company will also protect its name from late delivering of the products.
Disadvantages: Company may face serious consequences by opting this decision. The decision may lead company to any litigation or lawsuit. The company has well established brand name and recognition in the market. Our loyal customer base trust us for the quality and safe products. Therefore, any lawsuit will significantly hamper the brand image. It is also not ethical to deliver unsafe products especially to the younger children below 7 year age. By taking this decision company might save cost of $100,000 and deliver products on time, but in long-term the decision will adversely impact not only the brand image but also the customer base and profit of the company.
Solution 2:
The second solution could be to stop the shipment and reproduce it. This decision will require company to act quickly and producing, packaging and shipping products in time. The company can consider whistle products for those countries where permissible quantity of lead in toys is higher than USA and suitable as per whistle products.
Advantages: the decision is legal, as well as, ethical as the company will not be delivering products that contains undesired quantity of lead. The quantity of lead is only slightly higher hence it will not be harmful. There are various developing countries that accept such quantity of lead legally. By opting this solution company will be able to maintain its brand image, trust and customer base.
Disadvantages: The only disadvantage associated with this decision is cost associated with storage of the faulty products and identification of the client that can purchase those products. There are also chances that company may not find buyer to purchase those products which will result into huge loss to the loss. Hence, this decision will cost only major financial loss to the company without impacting ethical brand image.
Solution 3:
Company can inform customers about the problem occurred with some products and ask them about replacement of those products with some other products. Customers can also ask for the shipment of remaining products after excluding the faulty products.
Advantages: this decision will help company to act ethically and legally and save from the possible litigations. The company will also be in better position to save the financial cost that might require for reproduction and packaging of whistle products. Any litigation will cost company millions of dollars and image of the company will also be damaged. Informing customers about the issue will facilitate the development of strong bonding of trust between customer and the company(Waddock, 2005).
Disadvantages: There are very rare chances that any customer will cancel the complete shipment even after knowing the fact that company is not providing some toys because they are not of high quality standards. However, customer will be pleased after knowing the fact that company is operating very ethically without considering its profit and without compromising with the quality.
Recommendation
I would recommend the company to go with solution 3.
Justification:
This decision will help company to protect from huge financial loss that may occur if company decide to reproduce the products and unable to sell whistle products in any other country. The decision will also protect company from any litigation and negative impact on the brand image.
Analysis:
Solution 3 will allow company to work closely with the customers and letting them know that how important they are for the company. In solution 3 customers will be provided to two options they can ask their shipment without faulty products or they can replace faulty products with some other products at no extra cost.
Social Responsibility:
Recommended solution will reflect that company operates ethically by considering its responsibilities towards its customers. In given situation solution 3 will show that company is giving top priority to its customers and their safety without considering the financial loss.
Actions
Leaders of an ethical company develop clear mission, vision and code of ethics to inform its stakeholders about purpose of the company and rules that company follow in all processes and decision making. Leaders enforce company’s vision and code of ethics in all decisions of the company at all level. Leaders by developing clear mission, vision and code of ethics ensures that all employees adhere with company’s values and ethics. All stakeholders should be provided with training and guide of code of ethics in order for their effective implementation(Carroll and Buchholtz, 2012).
Google is considered as one of the most ethical company that consider welfare of all its stakeholders while performing its processes. The company has developed clear code of ethics that need to be followed by the all internal stakeholders. The company’s vision is “to organize the world’s information and make it universally accessible and useful”. Google vision reflect the purpose of the formation of organization. Google’s code of ethics helps in developing healthy organizational culture, transparent operations and facilitate ethical decision making. Company’s code of ethics focuses on customers. Google believes in: earning money by doing good; great is not the end and not enough hence, continuous innovation is essential; need of information is uniform across all borders; and making work a fun(Chitu, 2005). These codes ensure that all activities performed by the company and its employees are ethical and customer focused. Effectiveness of code of ethics can be measured by seeing the performance of company on: customer satisfaction, allocation of resources for community development, return to stakeholder, employees’ satisfactions and development of business partners.
Recommendation:Toy Company should not deliver faulty or unsafe products to any customer located in any company. Company should focus on earning money by doing only good things and serving customers very efficiently. Like Google, Toy Company should design its code of ethics keeping in mind the safety and requirements of the customers. The safety of all customers including young children should be on top irrespective of their location and country.
References
Carroll, A., and Buchholtz, A. . (2012). Business and Society: Ethics, Sustainability, and Stakeholder Management. Stamford, CT: Cengage Learning.
Chitu, A. (2005, October 25). Google Operating System. Retrieved from googlesystem.blogspot.in: http://googlesystem.blogspot.in/2005/10/google-corporate-values.html
Total Lead Content . (2011, August 14). Retrieved from cpsc.gov: http://www.cpsc.gov/en/Business--Manufacturing/Business-Education/Lead/Total-Lead-Content/
Waddock, S. (2005). Leading Corporate Citizens: Visions, Values, Values Added. Satyanarayana Parayitam Academy of Management Learning & Education, 4(3), 382-384.
