Introduction
In spite of the unstoppable growth of technology, the hardware market remains one of the most competitive segments of the economy. While the demand is remaining relatively stable, the number of suppliers is dramatically increasing, especially in the light of the fact that large USA-based manufacturers started to open numerous development centers in the third-world countries, where qualified, but cheap labor is available. Furthermore, the practice demonstrates that more local hardware developers emerge on the business landscapes of those countries, making the competition climate for the companies from the USA more intense.
Rachel, a Quality Assurance Engineer of a big electronics company faces a serious ethical dilemma. Specifically, under the existing contractual obligations, her company should supply a new server every six months, which seriously restricts the time necessary for proper quality assurance tests. Under such time constraints, Rachel adopted an obviously reasonable rationale:
She will not allow a shipment, if the chances of malfunctioning and harming the customers are high enough;
She will allow a shipment, if technical failure can lead to a data loss, but not to physically harm. Otherwise, the company can be supplanted from the market by the competitors (Barlett, 2015).
The purpose of this research is to conclude whether this approach is consistent with the existing classical and modern standards of business ethics and corporate social responsibility. Specifically, this scenario is analyzed through the lenses of deontological, axiological and teleological ethics. In addition, this paper also focuses on the possibility of analyzing this case through normative CSR (corporate social responsibility), values-based CSR or results-oriented CSR.
Ethical Analysis – Classical Dimensions
Even though the era of digital economy has formally and actually commenced, classical approaches to understanding ethics are still popular. Thus, the present dilemma should be viewed through the following ethical dimensions:
Deontological Ethics
The key aspect of conventional deontological ethics is that the correspondence of a particular action to the group of morally wrong or morally right is determined by adherence of such action to a specific normatively described rule, or set of rules (Stegmann, 2014). The nature of such rules may be different – they may be imposed by the government, the business association, or they can be enacted by the internal corporate agencies (Weiss, 2009).
Axiological Ethics
The key idea behind the system of axiological ethics is consistency with harmony between the business operations and values of the society as a whole, and specifically of the local business communities (Stegmann, 2014). Therefore, in order to understand whether the actions of Rachel meet these standards, analyzing whether shipping potentially defected goods servers is a customary practice in the field is necessary. Assuming that six-month timeframe is given to all similar manufacturers in this field, the chances are high that all of them fail to conduct appropriate quality-control procedures. Thus, it is reasonable to assume that there is an implicit agreement between the manufacturers and the retailers that a certain portion of the goods may be defected. Because a larger number of servers is more important than 100% safety for data from the commercial point of view, neglecting certain quality-control procedures appears to be admissible.
Teleological Ethics
The main idea of teleological approach to understanding ethics is that the result prevails over the process (Stegmann, 2014). However, before the analysis is advanced further, understanding what results are important is necessary. The most reasonable speculation is that satisfaction of the customers and their retention is the main task for both the manufacturer and the retailer. If a data loss ever takes place, it is reasonable to assume that these clients will choose to buy from the competitors in the future. Therefore, the decision to ship untested servers does not meet the standards of teleological ethics.
Ethical Analysis – Modern Dimensions
Contemporary approaches to ethics are closely intertwined with the idea of Corporate Social Responsibility (Stegmann, 2014). Analyzing this situation through the lenses of normative CSR involves studying the corporate governance polices. If they allow shipping potentially defected goods for saving future profits, then the actions of Rachel are ethically justified (Weiss, 2009).
Values-based CSR revolves around the axis of stakeholders’ interests. If as a result of this practice, the majority of stakeholders are satisfied, then the shipment should be authorized. To be more specific, in this case the manufacturer and the supplier will reap their profits, while the customers may experience occasional data loss. While some of them may ask refunds, their percentage is not likely to be significant to affect the profits. However, if the majority of servers may have defects, then the profits may suffer, and, therefore, all stakeholders will be displeased. Thus, making valued-based CSR analysis requires additional analysis, i.e. the proportion of potentially defected good should be ascertained.
Finally, results-based approach to CSR says that analyzing the results for the company shareholders is necessary. Yet, this kind of analysis is not possible, until more data is gathered. Specifically, the analysts should find out the potential extent of the data loss. If the reputation, losses may be more devastating than the potential financial losses, then the decision to ship is not ethnical and vice versa.
Conclusions
Today’s economic processes and, especially, unprecedentedly intense competition is the main cause of dichotomy between ethical compliance and profitability (Weiss, 2009). In order to act ethically, the companies should always collect as much data as possible. Furthermore, the development of comprehensive and detailed in-house ethical policies is necessary to help the employees in avoiding confusion and choosing the course of actions, which suits the interests of the company in the best way.
References
Stegmann, J., (2014). Stock value creation and corporate social responsibility: Paper developed ad-hoc for this seminar to support a discussion on Ethics and Corporate Social Responsibility.
Barlett, C. (2015). To ship or not to ship. Web. Retrieved from
Weiss, J. W. (2009). Business ethics: A stakeholder and issues management approach with cases .Mason, OH: South-Western Cengage Learning.
