MEMO
The manager of the Quality Assurance Department has brought to my attention a fault in one of our toys. A routine test revealed traces of lead in the whistles, which are part of the elementary package, destined for shipment at the end of the week. This is an issue of considerable concern because of the potential risks it presents to our target users and the cost implications of altering the shipment plans.
The memo from the Quality assurance manager revealed that there were traces of lead in the metallic whistles, which were above the allowable levels in the USA for children 7 years and below. The decision on what action to take in this situation was based on legal, cost, and time considerations. The first alternative will be to export the package, as it is if it meets the standards of the destination countries. The second move would be to remove the whistle and indicate on the packaging that it has been removed before exporting. The final option will be to undertake to reproduce the whistle and package the toy collection afresh.
The first alternative was to continue with the shipping plans to South America after ensuring that the destination market has no allowed toys with the levels of lead in the whistles. This decision was because different countries have varying regulations and restrictions on the levels of compounds allowed in imported goods. If the whistle meets these standards, then the elementary package can be exported as it is. The elementary package will then be prepared exclusively for export where the whistle is permissible.
This option is viable because it requires little or no cost to implement (Dobel, Elmore, and Wemer, 2003). The only expenditure incurred will be in investigating the levels of lead permissible in the South American countries for toys designed for children in elementary school. This investigation can be done within a day and the report given to determine whether to go on with the shipment or not. The toys will be legally sold in the countries because they will be permissible. Ethically speaking, the company will have sold products that meet the requirements of the destination countries. No products will be knowingly exported to markets for which the product is not suitable.
The biggest advantage of this approach is its cost efficiency. The company will not have to make any changes to the initial shipment plans. This will eliminate any costs such as repackaging costs or lost business opportunity.
One disadvantage that this solution presents is that the company may come across as “dumping” its unwanted products in a foreign country. Another disadvantage is that precious time could be lost waiting for the results of the investigations, which may turn out negative and unfavorable. This is why there is the second approach, which will eliminate the faulty toy only and allow the rest of the shipment to go as planned. This alternative will require the removal of the faulty whistles from the package. The remaining toys will then be exported to avoid missing the business opportunity that the beginning of the school year presents.
This alternative looks for a way to single out the problem and tackle it without affecting other components of the package, which are not faulty. It will not make business sense ground the whole shipment because of faulty whistles. This approach is legal because it removes the faulty component from the package. It will requires a certain amount of additional expenditure on repackage , but this will be prevent the company from losing a more valuable business opportunity. This alternative is ethical because the business will not be selling a possibly dangerous item to young children.
This alternative will prevent the business from losing a business opportunity, which would happen if the shipment were grounded. There will be no wastage of time investigating the regulations of the South American countries because the faulty pieces will be removed. The department may not be able to meet its sales targets because the selling price will have to be reduced because of the missing component. This puts at risk the overall performance of the company. There will be additional costs involved in repackaging the products and indicating that the whistle is excluded. This will push up the overall cost of production for the elementary line of toys.
The final option will be to delay shipment as the product is reproduced, repackaged, and shipped. The estimated cost for this process is $100,000. This does not include the cost of missed opportunities, which the company will have incurred for missing the school opening period. This alternative ensures that the company will supply the elementary package as it was originally designed. This new package will be able to meet all the regulatory requirements for both the USA and the destination market. This is a big advantage for the company because it will be meeting both legal and ethical considerations. The cost implication for this alternative will be very high but the business will be protecting its reputation, which is invaluable.
Apart from the high cost of this move, the business could lose the big business opportunity that the opening of schools presents if the reproduction and repackaging takes long. Once the packages are ready, it may not be able to recover the lost opportunity.
My recommendation would be second alternative. This is because this option eliminates the faulty product while minimizing the potential loses this could cause. The company will be able to supply the market with the product while protecting its clients from any risks. The company will also not miss a viable business opportunity because of one faulty component. The new elementary package will be safer for the consumers and in their best interest. If the package does not indicate the actual components of the elementary toys, then the clients will not know what is missing. Ethical considerations will require the price to be adjusted to reflect the missing whistle whether the client know about it or not.
This decision is also best for social responsibility because the company will be protecting both the health of the children who will use the toys and the environment. The business should protect its clients from any harm that may be in its products. It should also ensure that it creates environmentally friendly toys, which will not lead to pollution. This presents the best approach for the business in terms of cost, legal requirements, and ethical consideration.
REPORT ON THE IMPORTANCE OF ETHICS IN DECISION MAKING
A business is an entity established for the purposes of selling goods and services for a profit. Success for many businesses is measured by the amounts of profit it makes at the end of its activities. Rarely is time spared to think about the relationship it needs to build with its customers, suppliers, and government. A quality product or service is not the only ingredient of success. Overall success in business requires a well-rounded approach to business. A good reputation is the most valuable asset a business can have. This does not come easily. It takes years to build a good reputation and a second to lose it. To build an admirable company, a business should be able to conduct its activities in a professional and ethical manner. A business’ reputation grows when it is able to build trust among all its associates. Every business should have a code of ethics and conduct. This will regulate relationships within the organization and with its publics. A code of ethics provides guidelines for conduct of employees whenever they are acting on behalf of the organization. This will ensure high standards of conduct and discipline which will build the firm’s reputation.
Introduction
Many businesses have established a code of ethics and conduct which the employees are required to follow. Despite of this, not all businesses have a good reputation. This indicates that the existence of a code of ethics does not automatically translate into a successful business. For a code of ethics to be effective, it has to be adhered.
Possible strategies
The first strategy that the company could employ to ensure ethical decision-making will be to educate all members of the organization on these ethics and their importance (Cuilla, 1995). Once the employees have a proper understanding of the codes they will be able to apply them. If they also understand their importance, they will understand the value of employing ethics in all their decisions. This education should be done to all new employees during their induction. Apart from induction, employees should be reminded of these codes through regular memos and notices. By ensuring that these codes are internalized by all staff, it increases the possibility that they will be used.
The second strategy will be to set up a whistle blowing system in which employees and associates can report any unethical behavior within the company. A clear reporting system will enable the organization to track and investigate unbecoming behavior (Dobel, Elmore, and Wemer, 2003). The whistle blowing system should be accompanied by an investigating arm, which will be capable of looking into any claims made. These two systems will ensure that all reports are properly received and investigated without bias or favoritism. Management should ensure there is a proper way to protect all whistle blowers from victimization or unfair dismissal. With all these in place, employees will be encouraged to use the code and report any instances where it has not been used without fear.
Benefits of a Code of Ethics
The company needs to establish a clear code of ethics. This is because a proper code will provide a standard for the behavior of all employees. They will all be aware of what is expected of them and the consequences of going against these expectations (Wall, 2008). This will instill discipline among the staff who will be working towards achieving the goals of the organization.
Example of a Successful Code of ethics
The Coca Cola Company is a large international beverage company that has managed to remain successful despite its size. Its reputation remains high because the company has been able to maintain a culture of integrity throughout its global operations. The company has built all its operations on trust, which has resulted in a good reputation for the company.
The code of ethics guides the conduct of its employees around the globe, within the company, when dealing with others and wherever a conflict of interest arises. The introduction of the code of ethics is dedicated to spelling out what is expected of all employees including mangers. All Coca Cola employees are expected to uphold the highest standards of integrity in all their operations and relations, which may affect the image of the company. Within the company, the employees are expected to protect company’s interests by keeping proper business records, protecting company assets, and safeguarding company secrets (Reynolds, 2010).
Employees should avoid all instances where conflict of interest may arise. If this occurs, they should report the incident immediately. The code also prohibits all illegal actions such as corruption, insider trading and fraud. This code of conduct is used together with other policies such as Work Place Rights to ensure that the most appropriate conduct is maintained at work. These regulations can be attributed to the phenomenal success of the company.
References
Cuilla, J. B. (1995). Leadership ethics: Mapping the territory. Business Ethics Quarterly,
5(1), 5-28.
Dobel, J.P., Elmore, R., and Wemer, L. (2003). Memo Writing. University of Washington
Reynolds, W. G. (2010). Ethics in Information Technology Third Edition. Course
Technology, Cengage Learning
Wall, T.F. (2008). Thinking critically about moral problems. Belmont, CA: Wadsworth
Cengage Learning. Chapter 2.
