Human Resources Task II
Toy Company
1234 Toy Alternative Drive,
Ideal Strategy, HR 10100
Success in any business organization can be attributed to integration and streamlining of effective practices within the organization. Time and resources must be invested in each individual practice to create a strong and efficient organizational front. One important component of good company-wide investment would be the public and private ethical image of the company. The reputation of the organization as ethically superior should be thoroughly established in order to create an impression of trustworthiness and reputability in the minds of consumers.
In regard to issues surrounding the Toy Company, there are three alternatives to absorbing the impact of unintended publicity problems spawned by production of the toy whistles. With regard to the image of product quality, the company would be advised to address these issues by implementing alternatives that will have a positive impact on the financial, legal and ethical standing of the company. Consider the alternatives listed below:
1.
End production of the collection.
Statistics demonstrate that children under the age of seven are frequently injured by items with high levels of lead content: such as those used in the production of the toy whistles.
Companies that forego the production of an item has an alternative to risking the health of consumers may suffer losses upfront but will in the long run garner trust and reputability from consumers. Thus, the company reaps the benefits of repeat and back order on the basis of brand trust. Ending the production of lead-based whistle early in the process can actually be used as a tool to build good publicity.
Observation of the legal ramifications of a maneuver of this nature offers a good outlook. Credibility with legal watch groups will be established and help to avoid legal audits and harassment. Taking the extreme measure of shutting down an entire line of production will also establish the company’s ethical reputability from the consumer’s perspective.
2.
Recall the product.
Chen, Ganesann, & Liu (2009) explain that product recall simply means retrieving product(s) from all distribution channels and from the end consumers. They further point out that the main purpose of recall is to “locate and remove all defective products as quickly as possible from consumers and channel members .” One major advantage is that this strategy may have positive consequences on consumer perceptions. Research shows that consumers perceive firms that act in a socially responsible manner as being of a higher quality (Siegel & Vitaliano, 2007). Recalling the toy collection can be interpreted as an indication that the firm is trustworthy and that it cares about its consumers; in this scenario, elementary school age children ages 7 and younger (Chen, Ganesann, & Liu, 2009). Furthermore, this strategy signals product and service quality (Chen, Ganesann, & Liu, 2009) – an ethical consideration. While the above mentioned advantages center on possible benefits of maintaining consumer confidence and instilling brand loyalty, it may have some negative impact on the stock market and investors. According to Chen, Ganesann, and Liu (2009), “investors are concerned about the company’s ability to maintain a healthy cash flow in the short run and how the recall event may negatively affect product sales – a financial consideration. To investors, recalling a product from the market may signal severe financial loss, which is not limited only to recall process, potential litigation, liability, and penalty payment for damages to consumers (Chen, Ganesann, & Liu, 2009- financial and legal considerations. In addition, Stilwell (2007) points out that manufacturing companies may be liable for post-sale duty; that is, liability upon a seller (or manufacturer or distributor) for harm resulting from the failure to provide a warning after the time of sale. A good example, which may also be a legal consideration, is the $2.3 million fine imposed on the No. 1 toymaker company, Mattel Corp., in civil penalties for violating federal laws regulating lead paint in toys (CNN News, 2009) despite recalling the toys.
3. Modify the metal whistle in toy collection.
The American Academy of Pediatrics points out that all children have traces of lead in their bodies, but that the absence of an agreed “safe level” of lead means they should be exposed to it as little as possible. Renee Jenkins, professor of pediatrics at Howard University College of Medicine and the president-elect of the American Academy of Pediatrics claims that children under three are at the greatest risk of lead poisoning (Parham, 2007). Lamb (2010) explains that firms change (modify) product items by modifying products. “Product modification either changes a product’s dependability or durability or its versatility, effectiveness or safety” (Lamb, 2010). The action of modifying the metal whistle in the toy collection intends to cater for both the consumers and the organization as this reduces the consumers’ chances of getting lead intoxicated. A recent article by Foltran et.al. (2011) explained that “product modification by manufacturers has resulted in a decrease of children’s mortality rate for chocking in the last decades”. One advantage of this alternative identified by Groucutt, Leadley, and Forsyth (2004) is that product modification creates an image that the company is consumer-focused or customer-driven.
Of the three strategies mentioned, recalling the product remains the most ideal alternative. While this recommendation may have some negative impact on the company’s finances; its short term impact cannot be compared to the long term benefits, and on the long run, the expected profits associated with recalling the product from the market. Furthermore, this alternative will improve and strengthen the consumer-company relationship as it considers the consumers’ health and business ethics; thus, garnering public regard for social responsibility and consumer welfare in toy production.
The Actual Selection Process
The selection process for each alternative should be streamlined and methodical. It should also be based on multiple tests and case studies. Quality assurance personnel and middle management need to be consulted in assessing whether or not the company has the capability to efficiently convert to modified production procedure or whether or not the company can withstand the rigors of over producing to make up for losses in the case of ending a product line.
Any option chosen needs to based upon the premise of the ideas behind the company code of ethics. Any alternative implemented must be backed with a reason well grounded in the idea of protecting the company’s consumer-first image. Public relations will be extremely important as failure in communicating a community-first image will do permanent damage to an otherwise good company. However, a good public relations campaign can turn a potential disaster into a healthy display of the company’s superior policy in ethics.
A well handled recall or discontinuation communicates an image safety and dependability. In a media driven society good public image is solidified by good image campaigns. Take, for example, how professional sports organizations produce commercials and by-lines for community service activity. These stunts give the impression of the athletic organization as a part of a community rather than a cluster of greedy and selfish men. The idea here is not to start trouble to make a good go at a string of publicity stunts but to fix a problem and avoid any failures in properly communicating ethical standards.
When consumers feel taken into consideration they feel as though themselves will gain from buying from the company. Observe how at times buying from your company will actually become a moral responsibility in some companies. Companies with reputations for high ethics in standards of employee treatment will find that they are not only a sought after employee but regarded as one of the “good guys.”
The Company as an Agent for Social Improvement
Gone are the days of taking advantage of employees and selling products with the knowledge of health risk in order to maximize profit. Today’s consumer is savvy and knowledgeable. She has defenses such as online social networks and easily accessible information on any company she chooses. Seems unfair but it is not. This a part of a positive change in how capital companies relate to the people on which they depend to stay open: the consumers. Company and consumer are, in actuality, and ecosystem. If one of the two components is unhealthy than the entire systems harmful and in great need of change then the entire system is destructive to all parties involved. Companies that have aware and consumer-sensitive are on the rise. Today’s consumer expects companies that they can trust and that will—at least their eyes—display ethical and fair treatment for everyone.
Manufacturers of mass-produced items bear the responsibility of creating environmentally safe consumer-safe products. Companies are the most aware of what components are used to manufacture an item. Their responsibility would be to assure that those items are safe.
Attachments
Copy to:
The CEO
The Executive Team
The Toy Company
References
Chen, Y., Ganesan, S., & Liu, Y. (2009). Does a firm’s product-recall strategy affect its
financial value? An examination of strategic alternative during product-harm crises.
Journal of Marketing, Volume 73, pp 214-226.
CNN Money. (2009). Mattel fined $2.3 million over lead in toys.
http://money.cnn.com/2009/06/05/news/companies/cpsc/index.htm
Groucutt, J., Leadley, P., & Forsyth P. (March, 2004). Marketing: essential principles, new
realities. Kogan Publishers.
Lamb, C. (May, 2010). Marketing: A new approach to learning principles of marketing built
with you in mind. Nelson Thomas Publishers.
Mellum, M. and Casey C. (1995). Breakthrough Leadership: Achieving Organizational
Alignment through Hoshin Planning. Chicago: American Hospital Publishers, Inc.,
Parham, M. (January, 2007). Toy recalls & lead poisoning: What parents need to know
Jet Journal, Volume112, Issue 12, pp 48-49.
Plenert, G. (2001). The eManager: Value Chain Management in an eCommerce World. Dublin, Ireland: Blackhall Publishing
Stilwell, T. (2007). Warning: You may possess continuing duties after the sale of your product.
The Review of Litigation, Volume 26, issue 4.
REPORT
To: The CEO and The Board of Directors
From: ELEMENTARY DIVISION MANAGER
Date: January 10, 2012
Subject: ETHICAL STRATEGIES
Business Ethical Strategies
Business ethics refers to the structure of applied or professional ethics used to investigate the principles and moral challenges which are inherent to the typical business environment. There are several strategies that a company may adapt to ensure that ethical decision making takes place at all levels of the organization. These include highlights listed below.
Management strategy
Employees are observed to be the spring of inventive energy of a company and the essential participants in affecting the workplace decision-making process. Therefore, the company should implement strategies that integrate the employees into the decision-making process. This measure often improves the working standard of an organization. Sustainable company success under girded by the humane treatment of satisfied personnel.
Sales and Marketing
This strategy integrates virtual ethics, and simplicity in the decision making process. It also incorporates deontology and relativism to ensure that the ethical aspect of the business is sustained and or improved to perpetuate an adequate working environment. In this strategy, the principles, values and ideals by which marketers intend to act upon are investigated and some approaches devised to ensure that they make evidence-based decisions with respect to ethical issues (Goldstein, Timothy & William, 1993).
Benefits of Code of Ethics to the Company
Business codes of ethics are standards that a business organization should operate under in order to ensure an efficient operation and good practices. (King, 1989) There are several benefits established as a company observes these codes. A few of these advantages are:
Good Business Reputation-
The government, customers and other stakeholders will view the business positively and desire association with it. This helps to boast the business in the current market against competition from similar businesses.
Expansion within the Market-
It leads to expansion of the market as many people will buy the products of the company intending to take advantage of the benefits in health and quality products which do not risk with the safety of the consumers and society as a whole.
Select Code of Ethics: Ethical Standards
Considering code of ethics in a food manufacturing company, one code of ethics that the company adopts is ethical standards. Ethical standards help to prevent conflicts of interest on the personnel and company level. Ethical standards in the company also integrate corporate opportunities which prohibit covered parties from taking advantage of the merits that come as a result of good business and corporate ethics. It is through the ethical standards that organizational assets are protected and properly used by the employees and other covered individuals. (Plenert, 2001). Ethical standards in the company also integrate corporate opportunities which prohibit covered parties from taking advantage of the merits that come due to business corporate ethics. It is through the ethical standards that organization assets are protected and properly used by the employees and other covered individuals (Harrison & Stokes, 1992).
In general, codes of ethics in a business are essential in controlling company activities and practices. This is very fundamental in the achievement of the corporate goals and objectives
of the company.
References
Goldstein, L. D., Timothy, M. N. and William J. P. (1993). .Applied Strategic Planning: How to Develop a Plan that Really Works. New York: McGraw-Hill, Inc.,
Harrison, R and Stokes, H. (1992). Diagnosing Organizational Culture. San Francisco: Pfeiffer,
King, B. (1989). Hoshin Planning: the Developmental Approach. Methuen, MA: GOAL/QPC,
