04 May WHAT ARE THE ETHICAL AND LEGAL ISSUES?
Acme Mowers, Inc. has developed a new lawn mower that will outperform all competitive machines currently on the market. The firms marketing research indicates that the market for the product could be very strong if it is priced at roughly $130. Acmes research and development department developed two versions of the product. Version I is a small, easy to handle, lightweight mower that would retail for $120. Version II is bulky, harder to handle, and would retail for $300. The firms research suggests that Version I is a virtually perfect product, with one exception—tests show that some users may experience hearing loss after normal use of approximately 10 to 20 years. Version II, which incorporates noise reduction material in the product, shows no evidence of hearing-loss issues. Jerome Brown, Acmes president, is now trying to decide which version to bring to market.
A few months ago, Jerome asked the research and development team to find a solution to the hearing-loss issue in Version I. The teams suggestion was to include a set of high-quality earphones with the mower, to be worn when using the machine. The earphones would increase the cost of Version I significantly, however. Additionally, marketing research found that consumers reject the idea of wearing earphones or ear plugs while mowing. Jerome concluded that Version I would probably not succeed if the use of earphones was recommended.
During lunch one day last week, Jerome overheard a conversation about his main competitors new lawn mower. The new product sounded almost exactly like Acmes Version I, down to its lightweight structure. When he got back to the office, Jerome made some phone calls and verified that his competitor was indeed developing a new lawn mower. He knew that the competitive product would encounter the same noise problem. His sources also verified that the rival company knew about the noise problem but plan to proceed with production anyway.
Jerome is reviewing his options. If he does not make a decision quickly, his competitor could beat him to the market with the new product. If Acme launches Version I first, it could capture the market and get out of its current sales slump. But use of this product could lead to deafness for some consumers in 10 to 20 years. If Acme decides to market Version II, on the other hand, sales would likely be unacceptable, especially once the competition introduces its lightweight mower in six months, cutting in half any market share Acme might have gained. Jerome ponders the development of an advertising campaign that calls consumers attention to the risk of deafness. But this action might expose Acme to a lawsuit brought by an angry competitor. Jerome concludes that such an advertising campaign is not a viable option.
To help make his decision, Jerome decides to ask his operations manager how a decision not to market the new mower would affect the company. The manager tells him that if the new mower is not successful, Acme will probably have to lay off 200 of its 1,000 production workers. Jerome then contacts Acmes vice president of finance, who is equally pessimistic. “Given the current sales slump, the expense of developing an unsuccessful product could lead the company into bankruptcy,” he tells Jerome.
1. What are Jeromes options? What consequences might each option have?
2. What are the ethical and legal issues?
3. What moral philosophies might Jerome use to help him make a decision and what is the likely outcome of each?
4. What Would You Do?
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