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(Product Responsibility)
Group 5 Elvira Joselle R. Castro Ian Lloyd Cubelo Joseph Gener Cristine Parajas
I. Relevant Details
Nutritional Foods, Inc. (NFI) A $50M dollar manufacturer of healthful foods (natural and nonpasteurized) in Western U.S.
II. Timeline
July 20, 2013 (Morning) Reports come from 2 county health departments (Seattle and Southern California) of a possible link between an acute food poisoning of 2 children and an unpasteurized apple of NFI July 20, 2013 (after the meeting) 3rd and 4th reports of food poisoning come from two new counties
II. Timeline
July 20, 2013 (mid-day) Health officials from 4 counties are virtually certain that NFI products are involved in the poisonings. Further, batch numbers from 2 cases are discovered to come from a single days production. July 20, 2013 (end of work day) 3 additional reports of possible food poisonings are relayed by two newspaper reporters
II. Timeline
July 20, 2013 (late in the afternoon) In an internet chatroom for nutritional foods it was being spread that NFI has a food poisoning problem. July 20, 2013 (7pm) NFI announces publicly through its retail network that it is pulling all batches of the unpasteurized product associated with all but one of the alleged poisoning.
II. Timeline
July 20, 2013 (late night) July 21, 2013 (early morning) 50 more calls come in reporting cases of food poisoning and 5 more reports from health professionals who stated they were treating possible poisonings. July 21, 2013 (9am) 80% of newspapers carry the poisonings in their frontpage.
II. Timeline
July 21, 2013 (9am) Calls alleging adverse reaction to many other products of NFI pour in. 2 children who were part of the previous incident are reported to be in critical condition. Fred James meets with the Crisis Action Committee of NFI
III. Assumptions
Fred James as Chief Executive has the power to decide for NFI Reports linking poisoning to the product are not conclusive but is becoming clear to be possibly linked Move to pull out the products and any other attempts at damage control will devastate the companys reputation and stock price. Showing concern to the affected consumers will show the public that they are admitting liability. Showing concern includes giving financial aid to those affected.
Strategy considered for those seriously affected is paying for their hospital bills and other incidental costs.
Perspective : Fred James Chief Executive of NFI Time Frame : During his meeting the Crisis Action Committee of NFI
III. Analysis
ARISTOTLE
recall that phronesis requires the constant search for the mesotes this in habituation creates a virtuous cycle stopping at just recalling their product and notifying the public interrupts the flow in creating a virtuous cycle
ARISTOTLE
Conclusion: stopping the virtuous cycle will hinder the honing of phronesis / practical intelligence determining the mesotes (the right action, at the right amount, in right time, to the right peron, with the right means) is being limited
ARISTOTLE
Recommendations: In the meeting Fred James should
Direct the Crisis Action Committee to look for other areas for improvement Create a fact finding body to re-asses the process used in producing the final product and update these. Provide health care assistance to those who were poisoned by their product Conduct surveys on how the public feels on each action
ARISTOTLE
Specifically By creating a fact finding body to re-asses the process used in producing the final product and update these. Provide health care assistance to those who were poisoned by their product Conduct surveys on how the public feels on each action
Moral Dilemma
Amidst the crisis that the company is facing, should they just stop at recalling their products or they show concern to those who have been sick by their product
Begins to strike balance between profits and doing right Doing right is more to the advantage of the company Begins to recognize that the organizations role is not just purely economic one but it also has duties and obligations to the society Dominated by reactive mentality
Pulled out their products Showed concern to those who were affected Worried on the effect to their reputation in case they would show concern to their clients No code/policy that would guide them in this kind of situation
Direct that budget be allotted for the welfare of the victims Direct that a fact finding team be created Direct a reevaluation of the processes to avoid this from `happening again
KANT
Maxim:
When a critical report about our product possibly causing food poisoning has been reported, I will only recall the specific product associated to the food poisoning through my retail network, ask consumers to return all unused products to their local suppliers, and ask retailers to stop selling the said specific product
KANT
Universalizability: (1) Imagine that this maxim is universal law (2) Then, what and where is the sense of product responsibility (3) No one then, will be responsible or accountable for an action/circumstances of a certain wrongful act (4) therefore, it is not morally right.
KANT
Conclusion
It is not morally right to neglect customer product right and satisfaction. Selling and earning a profit is not just the key point on having a business but the end goal is that selling a product that will be beneficial and promotes a healthy lifestyle to the end user
KANT
Recommendations Be liable and or accountable to all the victim of food poisoning by providing health care assistance Educate all product consumer and retailers of the possible cause the food poisoning.
Alternative 2:
Fred James decides to conduct a more aggressive information campaign of the incident
Utilitarianism (Assumptions)
Health - US50,000.00
Life 500,000
About 3,000 die of food poisoning each year. Half of the deaths in Western US
Utilitarianism (Assumptions)
Utilitarianism
Step 2: For each alternative, estimate the foreseeable benefits and costs that it will produce in the future
13,050,000
1,798,653,925,000
Costs
He will not get the majority of the market share in the industry and hence he will not beat the number one competitor Savings from product liability suits (class action) Public Relations (damage control) 100,000
Legal fees 100,000
He will show that deals should be closed based on merit and not on bribes
Savings from wrongful death compensation Increase X1,500 in company morale 1,000,000 =15,000,000
1,798,653,925,000
25,600,000
Alternative 2:
Saving from Public Relations Fee (damage control) 100,000 50,000 = 50,000 Savings from a lesser loss in stock price (one fourth of the value as supposed to half) 25,000,000 12,500,000 = 12,500,000
Legal fees for possible (class action suit) 100,000 Possible compensatory damages for wrongful death 1,000,000 X1,500 =15,000,000
33,050,000
1,798,653,925,000
Costs
share in the industry and hence he will not beat the number one competitor Savings from product liability suits (class action) Public Relations (damage control) 100,000
Legal fees 100,000
Losses due to mass Costs pull out 17,000,000 (products pulled out) He will not close the deal 5,000,000 (cost of pulling out, i.e. Logistics and information He will notcampaign) get the majority of the market = 22,000,000
He will show that deals should be closed based on merit and not on bribes
Savings from wrongful death compensation Increase X1,500 in company morale 1,000,000 =15,000,000
1,798,653,925,000
47,100,000
Alternative 2:
Fred James decides to show concern by aiding (financially) those affected by the incident (including those in critical condition)
Saving from Public Relations Fee (damage control) 100,000 50,000 = 50,000 Savings from a lesser loss in stock price (one fourth of the value as supposed to half) 25,000,000 12,500,000 = 12,500,000
Legal fees for possible (class action suit) 100,000 Suit for damages and Wrongful death compensation 50 X 500,000 = 25,000,000 2 x 1,000,000 = 2,000,000 30,600,000
12,820,000
30,600,000
Utilitarianism
Step 3: Choose the alternative that produces the maximum benefit. Fred James should Further notify the public Pull out ALL products of NFI Show concern to those affected
Utilitarianism
Conclusion: Notifying the public of the possible link between food poisoning and NFI products; Pulling out ALL of NFI products from the market; and Showing concern to those affected by the food poisoning incident produces the maximum net benefits for EVERYONE concerned
Utilitarianism
Recommendations: In the meeting Fred James should: direct the Crisis Action Committee to constitute an investigative panel that will determine any deficiencies in their production line and distribution line order that NFI communicate with the U.S. Food and Drugs Administration in the recall of their products and to further determine if there is a link between NFI goods and the poisonings
Utilitarianism
Recommendations: In the meeting Fred James should: Order that NFI will pledge donation to an organization devoted to food poisoning research Direct that a PR be hired specifically to address the situation and rehabilitate the image of NFI
THE END