Ethical Concepts and Ethical Issues in the Automotive Industry
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Course
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Ethical Concepts and Ethical Issues in the Automotive Industry
- a) “Unsafe Products. How would you classify companies selling an unsafe car?”
- a) Ethical and legal, b) ethical, but illegal, c) unethical, but legal, d) unethical and illegal?
“Suppose a car manufactured by the Renault-Nissan-Mitsubishi alliance will explode when rear-ended and the driver and passengers will be burned alive. A cost-benefit analysis is done, which determines the company can save $100 million if they don’t recall the cars and instead give money to the families of those who were killed when the car exploded.
What is the ethical dilemma? Explain your point of view fully.”
The primary ethical dilemma in this Renault-Nissan-Mitsubishi scenario is safety versus cost. The manufacturing process of the cars took vast amounts of investments both in terms of money and time. Therefore, recalling all the cars that will explode when rear-ended for repair will be very costly on the point of the company. It might even end up making huge losses which is not suitable for their business. However, if they do not recall the cars, then it is expected that more people will be harmed and die since the company has a considerable market share. It is also unethical and illegal to manufacture an unsafe car.
Additionally, considering the principle of harm, it is wrong to harm others. If the company does not call back the cars, it will be hurting a majority of its innocent customers. Therefore, even though it is costly to recall the vehicles, it is the only ethical way out because the fault is not with the customers for purchasing defective cars unknowingly but with the company for releasing defective cars.
“Discuss fully if it is ethical or unethical sell defective products and your rationale.”
Ethical manufacturing business should put the priority on the safety of both their employees and that of their customers. Selling defective products is both unethical and illegal. Markgraf (2018) writes that “Knowingly shipping dangerous products is illegal and unethical.” This statement further emphasizes on the illegality of distributing defective products to customers. Every manufacturing company should consider product safety first before producing and distributing their products. Product safety is usually governed by legislations such as “The Consumer Product Safety Act of 1972” which was enacted to establish a standard for prevention of risks and dangers associated consumer products (Product Safety Laws, 2018). Also, defective products do not adhere to the corporate social responsibility of the respective organizations. Therefore, selling of defective products is not only unethical but also illegal.
- b) “Executive Actions. Renault executive was accused of doing a variety of things that some consider controversial, unethical and even illegal. For example, having the company pay for a lavish event on his birthday. Describe actions and explain fully why you feel his actions were either:”
a) “ethical and legal, b) ethical, but illegal, c) unethical, but legal, d) unethical and illegal?”
Some of Carlos Ghosn’s actions were unethical, some illegal and some both according to the accusations. He was accused of underreporting his income using his colleague Greg Kelly underreported his income to a deficiency of a total of $85 million (France 24, 2020). If this action is true, then it is both unethical and illegal. It is illegal because it is part of tax evasion and hence he should be charged for tax evasion. Secondly, he was charged with shifting some losses to Nissan, which amounted to a total of 1.85 billion yen (France 24, 2020). If this allegation is true, then it was unethical since it is a total breach of trust and can also be categorized as corruption. His other action was skimming off some of the Nissan’s funds which amount to $5 million for his personal use (France 24, 2020). This action is both unethical and illegal. It is immoral because it is corruption and illegal since it is a form of stealing from the company which demands that he should be convicted for this crime. He is also involved with other actions such as using the company funds for his wedding in 2016. He also earned a total of $110,000 between 2003-2016 as payment of being an adviser which was a fictitious role and used company’s money to pay for his residences in Paris, Rio de Janeiro and Beirut. All these activities are both unethical and illegal. Therefore, the Renault executive’s actions were mostly unethical and illegal, and for this reason, he deserves to experience the consequences of his actions.
“Imagine you are a consultant. What are your concerns and what actions would you recommend to the Renault executive team and Board of Director?”
The Renault case is a very unique and serious case that demands special attention. According to the principle of lawfulness, one is not expected to violate the law. However, the Renault executive violated the law; hence the pragmatic action is for him to face the consequences of violating the law. His actions had a personal benefit and did not benefit any other person except maybe his close family members. He was entirely out of line. He violated the principle of honesty by deceiving the company in so many ways and causing it a lot of harm. He was unethical and violated the principles of the corporate social responsibility of the organization.
Further, he violated the theory of utilitarianism that required him to do the highest good for the benefit of the most significant number of people (Tardi, 2020). As such, he is liable for punishment. He should pay for his illegalities and unethical actions so that he can serve as a lesson to others of the same calibre.
None the less, there is a positive side of the Renault executive. His actions were for his benefit and enabled him to live a comfortable life. This comfort helped him to give even more of his time to work for the company. His reasonable efforts were clear to everyone after he managed to revive Nissan from the ditch of losses. His hard work hard a lot of social benefits to both the employees of the company and its customers. Therefore, the Renault executive has some rights, and the principle of justice should take its course. But, as a way of appreciating the executive’s hard work at the company, the Board of Directors can as well consider pardoning him for his mistakes but cancel his pension plans and take back all his resources that he acquired illegally. After all, they say a man is to error.
References
France 24. (2020). Carlos Ghosn: the charges against him – France 24. France 24. Retrieved 8 August 2020, from https://www.france24.com/en/20200108-carlos-ghosn-the-charges-against-him.
Markgraf, B. (2018). Legal & Ethical Issues With Manufacturing Companies. Small Business – Chron.com. Retrieved 8 August 2020, from https://smallbusiness.chron.com/legal-ethical-issues-manufacturing-companies-74890.html.
Product Safety Laws. (2018). Product Safety Laws. LegalMatch Law Library. Retrieved 8 August 2020, from https://www.legalmatch.com/law-library/article/product-safety-laws.html#:~:text=Product%20safety%20laws%20are%20designed,sale%2C%20and%20resale%20of%20products.&text=The%20Consumer%20Product%20Safety%20Act,are%20associated%20with%20consumer%20products.
Tardi, C. (2020). Utilitarianism Defined. Investopedia. Retrieved 8 August 2020, from https://www.investopedia.com/terms/u/utilitarianism.asp.