Innisfree Ranch
The Ethics Project

SUNDAY, AUGUST 16, 2009

Business Question




Ok, I'll admit it. The first couple posts were somewhat political. But they are still questions of ethics, not politics. I hope you will enter into discussion on those topics---from an ethical viewpoint because those issues are important. They are important enough to spark division.

Now it's time for a business question.

You are the manager of a medium sized company which produces a food product. Because of the economy, business has been very, very slow. So slow, the business might not make it through the recession.

One day you are out checking the plant and make a terrible discovery. One of the machines is leaking oil into the vat where your food product is mixed before baking. It's not just a drop, it's a steady drip of machine oil. You taste some finished product but are unable to detect any flavor difference in the product. You have no idea how long this has been happening. A check of the maintenance records shows that particular machine has been consuming a lot of oil for the past 3 months. The maintenance manager recommended halting production and repairing the machine a month ago though he did not note the oil leaking into the food.

You've had no complaints. No one has been made sick and no one should be sickened by a small amount of motor oil. This is assumed because you have no reports from unhappy customers.

If you stop the line and report this problem to the public. Surely someone will come forward with a health complaint. The lawyers will see to that.

The burden of litigation would ruin the company. 26 jobs would be lost, the plan would close.

Again. There is no real health threat to anyone. It's not good, but, it's really not harmful.

Do you report it? I know, we all say yes, we have a moral obligation to do so. But remember, 26 jobs will be lost. Including yours. It might be difficult to find a new job since you'd be responsible for ruining this company.

What if it meant 75 jobs? Does the potential financial consequence have any impact on your decision to report or not report the motor oil leak?

I want your thoughts.


posted by CHRIS REICH, THE ETHICS PROJECT  August 16, 2009 16:24 

General   


I WANT YOUR COMMENTS! CLICK TO ADD YOUR   comments (3)


COMMENTS


[ Posted by Al Radley, September 01, 2009 14:58 ]
     Seems to me that this was a humanitarian gesture. I understand why you don't agree with the decision, but calling it unethical? I think it was ethical to let him return to his homeland to die.

Al


[ Posted by Mark, September 20, 2009 13:49 ]
     Do we report the oil leak and take the consequences, yes.

First, order the line down to repair the problem and get rid of the product know or suspected to be tainted. Then be honest with the proper agencies that come calling. Even on a good day, people dream up lawsuits, so it’s a reasonable fear that someone will file a suit, be ready for it. Take a page from the Tylenol problems from some years ago. They didn’t know how things got contaminated or where, but they took immediate steps which cost a large amount of money. Next they changed the packaging to prevent future problems and spawned a major change in the industry (for the benefit of everyone, though I’ll grant some extra expense along the way.) You can’t assume that it’s not hurting anyone just because you haven’t seen a complaint. Would you want to eat the hamburger that just fell on the floor when you were not looking? Naturally you’re thinking “no.” The floor was recently mopped so it’s relatively clean, is that a justification to serve it?

I’d also be up front with the 26 employees. Here’s what happened and what we’re doing about it. The very real risks of economic failure are in front of us, but it’s the right thing to do. What if the employees are also customers of the tainted product? How would they feel? I’m confident that some will grumble and say they wished everyone kept quiet, but they are the same ones that would holler if their child was made ill by the tainted product.

If we stop doing the right thing, the whole society suffers. Not only that, poor ethical choices have a way of catching up to you. It might get by for a while like Enron or WorldCom, but they eventually got cought.


[ Posted by Chris, September 20, 2009 15:12 ]
     Mark,

That was a brilliant essay on exactly what I believe would be the proper handling---I especially like that you would gather the employees and be very upfront with them.

OK, now what do you do with the employee who runs to the media with "I have more stories about the company that clearly show this recent event is a pattern---and always covered up"

Though the employee is only trying to gain a moment of fame, still it makes it very hard to disprove a cover-up---after all, it's all covered up, right?

So what do you do with the employee?

Chris


 




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