Posted: August 7th, 2013
Managing Our Worth
Managing Our Worth
In a decision to recall faulty products or a decision based on compensating cases in which injury occur due to faulty products, the one thing businesses consider is the cost of either choice. In this case, one looks at the cost of compensating injury and the cost of recalling goods. In as much as the cost of compensating injury will be cheaper, it is necessary to recall the products. In the case of Ford Pinto, recalling cars that endanger the lives of others is the right and ethical approach to business. The recalling products is an expensive affair, but in the in the end, it boosts the company profile as a socially responsible entity that cares for the consumer as much as they care about making profits. The Ford Pinto should be recalled to avoid injury and protect life. This is because when injury results in the loss of life, there is no way in which one can measure the intrinsic value of life. No compensation will ever compensate for the loss of life and the value this life had on other people and dependants.
The greatest stakeholders involved include the company employees at Ford and customers who rely on their products. These two entities need to co-exist for the business to continue. This is true since the customer is dependent on the products and the employee wages depend on the resultant profit from sales. If the customer fears the product is flawed to an extent it can cause injury, then the company may suffer in terms of the sales made for the product. Recalling the products ensures that the consumer is free from unnecessary risk. This will restore confidence in the consumers and sales will be back on track if not better. Good sales mean high levels of profit that will be important to ensure that the company employees do not lose their jobs due to reduced sales. The decision to recall the products is expensive, but it recognizes the value of the customer and the value of the company. The decision is designed to maintain customer loyalty, and also to preserve the reputation of the company and enhance continuity.
The financial impact of the decision to recall products will be much higher than the decision to compensate for injury arising from the Ford Pinto faulty nature. The immediate impact would be expensive for the company, and there will have to be cut backs on spending and production to relieve the impending financial blow. Cutbacks on spending could translate to the wages of employees being reduced to meet the cost of production. A recall will also slow the production of new products since the recalled cars will have to be fixed to ensure that the design flaws have been rectified. However, foresight would judge the decision as being prudent and will serve for the greater good to enhance the company outlook in the public eye. The company reputation will be strengthened and enhance the trustworthy character of the brand. This may translate into considerable profit for the future.
The intrinsic value and instrumental value of human life is extremely beneficial. The instrumental value of the individual is measures from the products ability to maintain health and its ability to reduce risk and enhance safety (Hartman & DesJardins, 2008). This is not to say that the cars do not have any underlying risk, but if the company can reduce the risks involved with driving, then it is essential that they rectify the situation. In maintaining the safety and health of the car users, the instrumental value is enhanced especially since the health and safety of a person will enable them to do more that add value in their lives. Compensation can be used to pay for lost wages because of the loss of life or ability to do something by an individual. However, the intrinsic value is the very nature of man. When loss of life occurs due to the faulty cars, compensation dos not have the ability to restore human life. Recalling the products saves the Ford from the blame arising from loss of life by the victims dependants.
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