Business Law and Ethics

12

BUSINESS LAW AND ETHICS

Question A.1

It is clear that the defects in the Zero Pedal bicycle might createsubstantial hazards to the users. However, the extent of exposure islimited to warm weather. Since these risks stem from the productdesign, then I would urge Doug to review the product designwith the help of the design team. I would request the design team todetermine the extent of quality defects by conducting an experimenton a batch of products in the warm areas. The team should come upwith written procedures for describing the best way to improve thedesign. The following areas would apply in determining the extent ofthe injury associated with the Zero Pedal bike:

i) What is the utility of the Zero Pedal bike?

ii) What is the extent of the hazards that the product is likely topresent?

iii) Is this risk apparent to the users?

iv) How are the users ready to cope with the risks posed by thecurrent model?

v) Are there adequate instructions to the users on how they canmitigate the risk?

In addition, the company should be ready to address the matters thatinvariably arise such as

vi) How are the consumers fairing with the defective products?

vii) Is the company complying with any regulatory bodies governing onthe possible impacts of the release of defect products to customers?

viii) What is the company’s estimate of the cost of recall?

ix) Are there notifications to make the defective products?

The report from Doug’s team should report on the specificationnecessary to improve on the current model. It would includesdeploying a power regulator to control the energy released whenpropelling the bicycle, supplementing solar panel with thebattery for power storage, and incorporating sensors with emergencybrakes to halt the motion when it exceeds 15 mph. Alternatively, thereport presented by the design team should indicate the conditionsthat would lead to the recall of other products in the market.For example, pressure from the users/ customers would accelerateredesigning of the Zero Pedal bicycle. The reason behind thisdecision is that new technologies are entitled to create reliability,dependability and efficiency in the use of the component rather thancausing harm to the consumers.

Human errors could be related to the predicted hazards tohuman beings. This information would be documented and taken to theappropriate persons (the management) to review it and find the senseof adding more value to the Zero Pedal bike. Since pressure wouldalso result from Robert’s team, approval on corrective actionsshould take the least time possible. Before recalling the products,the design team should work against time on improving the products inthe stocks. The new make should be released to the buyers in exchangefor the defective ones. Moreover, the company would be own terms andconditions for the warranty, make updates on a release of newZero Pedal bicycles. I would ensure that the associated warrantiesremain competitive to boost revenue. The distribution records wouldapply to the release the new models in compensation of thewholesalers.

Question A.2

It presents an ethical issue. Legally, the wholesalers shouldtake the stock from the manufacturers without asking any downpayment. It is because, in doing so translates to a “handshake”or bribery. This analogy is likely to create question the integrityof both the manufacturers and the business. Alternatively, it islikely to create unfair market competition. As a newadvertising manager, one bears the mentality on how to set thebusiness on a high note take off. It means that parting with $5,000would not be an issue since it will create a right image to mybosses. However, considering that the current bicycle model isdefective, the scheme might work against you in future since it isunethical. An advanced model could be in the market within a span ofthe next few years. This situation would make the business vulnerableto huge losses that would not fare well with the company’smanagement. In such a case, the management might shift the blame toyou for the sudden decline of the revenues as well as your ignorancein informing them about the operations carried behind the scenes.

Informing the company to fork out $5,000 in marketing the defectiveproduct might not cut a good image concerning your reliability,honesty and professionalism in business. In case of any failure, youwill take all the blame. The Utilitarian Approach advocatestaking an action that is moral and less injurious: an action thatcreates a balance of the situation. Based on this perspective, itwould be appropriate to embark on improving the design of the ZeroPedal bike. The design team should start with the bikes on stock andthose in the production line. After a good make, the company wouldrelease them to the wholesalers and retailers, and recall thedefective models for redesigning. By so doing, it would save thecompany around $25,000 in half a decade. This money could fund otheroperations.

Question 1.3

Cost-benefits analysis is suitable for determining whether agiven policy should be implemented. The economic theory suggests thatif a system passes the cost-benefit test in relation to thealternatives present, then such a change should apply. Acost-benefits analysis at Green Move Company would involve evaluatingthe cost of redesigning the Zero Pedal bike in relation tomaintaining marketing of the defective model. Practically, for thecost-benefits analysis to be useful, it must depict the status ofveto mechanism. It means that if the anticipated policy islikely to fail in the cost-benefits test, there is no need forimplementing it. Redesigning the current model would cost much higherthan continuing with the sale of the defective model, but thepositive impacts would occur after managing a concrete productionsystem for a more reliable Zero Pedal bicycle. On the issue ofdetermining the worthiness of paying $5,000 annually, it does notgive an equal value for producing improved product. Even if it wouldmean taking the low valuation of manipulating the design, forking$5,000 would be incomparable.

Question B.1

If Robert decides to terminate the agreement, the interest ofGreen Move Company would be at stake. It is not that Solar Groupfactory are the only manufacturers of the solar panels, but theagreement and work relations with Robert’s company have beensignificant to their growth. Robert should convey a meeting with themanagement at Solar Panel factory, and discuss the best way ofimproving the working environment of her employees. In this way, itwould have little to do with increasing the wages of the employee. Ifanything to go by, the two managers should look into ways ofeliminating child workers from the Solar Group factory. It would be agradual process entailing giving the children training away from thecompany. While these children will be getting the technicalknowledge, the will also be developing in age. In the meantime, adultworkers would be absorbed to take these positions. Eventually,children laborers would be eliminated from the group, maintaining agood reputation of the two companies. It will incline more customersto purchase the product brands from these two companies.

Question B.2

Robert is now aware that the Solar Group factory is employingchildren workers contrary to the policies in his company. To addinjury to this condition, an online blogger has threatenedposting a malicious link on the child abuse carried in Solar GroupCompany. Since this move will terminate the brand name with most ofhis customer irritated, he needs to approach this matter withprofessionalism and respects that stand between the two companies. Inconsidering the working standards and wages in Bangladesh Company,Roberts will be guided by the standards below.

Minimum wage- he should analyze the minimum wage given to children inrespect to that given to the adult workers. It is so because onewould not expect an adult worker to be paid an equal amount with thechild laborer. The differential in payment would lead the managerfrom the two companies to investigate proper remunerating the adultworkers and gradually eliminate the working children whilemaintaining the working behaviors and pace.

The working hours- Mr. Robert should access the compensation ofchildren to that of the children for regular working hours andovertime. This aspect should also cover the issue of the workingstandards. He should try to stress the important of working inwell-ventilated and lighted workshops. Through this behavior, theSolar Group is likely to improve the working habits of its workers,and, therefore, the production.

The working behavior and operations- Safe working practices arelikely to lift the production of the company. If these ideas occurredlong enough, the blogger would not have any grounds to aggravate hisaccusations.

Type of employees-Since the working conditions and the average incomefor a worker is small employing more casual laborers would create adiverse community with little demand on wages. Since our caseindicated that the workers at Solar Group factory earn more than anaverage employee in Bangladesh, it would be logical to employ adultsthan children to fill the positions.

Flexibility at work- Mr. Robert should stress on the safety ofdifferent operations carried out at Solar Group Company. He shouldemphasize on the suitability of rotating workers, work on differentshift, hence increasing the productivity and efficiency. Forinstance, Akash is tired of working for long hours. It could resultfrom poor working behaviors.

The method of payment- Mr. Akash is aware of planned attempts todemand more wages. As a result, Robert should evoke a talk on theneed for motivating worker, putting them under company’sremuneration policies.

Question B.3

Since the Green Move is an affiliate to the Solar Group Factory,there is possibility that the demand of the Zero Pedal bicycle isgoing to decline. The blog is likely to generate a bad reputationabout Green Move Company. Generally, a good reputation captures theattention of potential clients, connect with new buyers and attractpotential customers. If the blogger is going to turn the link viral,this will cut a negative image to both companies. Even though higherinjuries will be on Solar Group Factory, the Green Move Company willlose the market for its brand. While it is importance to sell theproducts online, it is essential to listen to the comments andcomplaints made by the online participants. As a result, Robert couldevoke the best approach to discussing this matter with the managementat Solar Group Factory in order to maintain the quality profile ofhis company.

Question C.1

Since the Green Move Company aims at improving its operations, thereis the need for Viktor to submit his bid. The lease managerhas already informed him that the lease will involve competitivecriteria. Therefore, it means that Viktor has the task of preparing apotentially winning bid. Based on the instruction given to him, hewill provide two envelopes, one to the property manager and the otherto the government office. However, the bidding scheme is questionabledue to the special instructions given to Viktor. Favoritism inbidding is unethical and illegal. Worse than this, the best bidderrarely wins. In fact, bidding in modern days is deceptive since itassumes that commercial parties are given equal chances to developwinning bids, but this is not the case. If this is a competitivebidding, it is senseless for the property manager to expect a “token”from Viktor so that he may approve his bid to win for this lease.This could mean that there are barriers imposed on the foreignbusinesses by the sovereign government. If Viktor gives the token tothe property manager, it will not guarantee their company to win thebid given that their company does not have its roots in this country.Then giving any cash for special considerations will be illogical.Furthermore, theirs is a new enterprise hence no losses will beaccrued for the failure. Since the government has the bargainingpower in determining the company’s operations and businessstrategies, it is undisputable that the game of interest will beapplied.

Question C.2

Green Move Company should consider expanding its business operationssince it has several advantages. This idea will help the companyimprove the production rate, engaging in more planning and strategicoperations to increase the revenues. As a result, the business willcreate a surplus inventory of goods and services, thus affordingproducts for external markets. In addition, Viktor imagines thatstarting a business in Russia will be cost saving since it willabsorb underemployed and unemployed persons. Though this is a hugegamble, the company might be lucky to absorb skilled individuals whoshall transform the business into great achievements. Expanding abusiness is significant since it helps in branding the company. Ifthe new that Green Move is also operating in Russia, customers willbelieve that most of the good produced by this company are genuineand appropriate to use. This idea is suitable in manipulatingpotential customer to do business with you.

In addition, it will be advantageous to invest in Russiasince this is an industrial country. The materials for the productionwork will be sourced from companies in this country. Through thisrelation, the Green Move Company will develop quickly by embracing atechnological environment to compete with other companies in nationaland international companies. Given that Green Move will retain theglobal identity in Russia, the both private and private companieswill consider investing here. As a result, there will be mutualbenefits between these companies. One of the primary hindrances thatGreen Move will face is the land use policies. Since the land will beleased through competitive bidding, Green Move would be forced to paymore in order to win the contract. Moreover, the social welfare issuecould be a huge blow to Green Move Company. Since the company has aninternational status, it will be forced to set good wages forworkers, develop a good compensation plan for employees and maintainhigh safety standards.

Question D.1

Organizational culture- Robert’s response to the situationsfacing Green Move would define the attitudes and the values of thecompany. Still, the organizational culture is best described throughthe commitment by both the staff and the employees. Lack of fiduciaryrelationship between organizations would hinder the developmentof trust, integrity and fairness in business operations. Cashing$2,000 on top of $5,000 to run the business would indicate a lack ofintegrity. Ignorance by Robert to act to the Solar Panel factorywould create huge losses to his company since customers could evenassume that products from his company are compromised. Moreover,Ignorance could lead Viktor into losing the company’s money bygetting involved with unethical activities.

Uninformed consent- As the CEO of the company, Roberts has thepower to authorize informed consents to different operations. Withknowledge in business administration, it is definite that Robertsunderstand the terms and conditions of contracting. Therefore, it isillogical to bribe the property officer with $ 2,000. In addition,agreeing to give $5,000 annually to the sale of defect products isunethical and illegal.

Undue Influence-Even though Robert would put his trust andconfidence to the property manager by risking $2,000 with hopes ofwinning the contract, the relationship could be broken any time sincethere was no legal agreement of winning the contract. In such a case,Robert and company would face criminal charges for involvement incorrupt deals. Similarly, the relationship between Green Move Companyand the Solar Panel factory would be broken since none of them wouldtolerate working at losses. It is so since Green Move would point theblame to Solar Move for failing to adopt safe working behaviors andcomplying with the regulatory terms on labor issues. Apparently, itis immoral for the managers to participate in child abuse whereasthey are supposed to be in front line to deter with it.

Question D.2

Green Moves Company could be at risks of facing criminal charges. Forinstance, it is criminal to entertain the sale of defect products tothe consumers/users. It is because the company holds the fullresponsibility for manufacturing. Moreover, giving a cumulative$7,000 as the price to advance the business is illegal. Governmentpolicies advocate for fair contracting and business operations.

Question D.3

Some of the short-term steps that the management at Green MoveCompany ought to take include increasing the production locally,contacting the customer to listen to their view about their products,conducting cost-benefit analysis to determine the profitability oftheir business in relation to the resources used and stressing toSolar Panel factory on the importance of adopting safe operations andbehaviors.

Long-term steps would include expanding the business abroad,collaborating with a reputable company, and absorbing skilledpersonnel in different capacities.

Question D.4

The government is responsible for making regulatory policiespertaining the quality, safety and reliability of products. Policieson products make the company remain devoted to producing safeproducts. Moreover, the government should ensure that the companiescomply with the statutory requirements of labor, environment safetyand safety of workers.

It is also government responsibility to ensure that contracting isdone with transparency where the most competitive bidder wins thecontract.