Memorandum and Report
TO: Rebecca M. Melton, ABC Toy Co. CEO
FROM: Carol Harris, Elementary Division Manager, ABC Toy Co. DATE: 6/5/11
SUBJECT: Product quality issue and a report on ethical decision making. This memo addresses a product quality issue with a whistle included in our toy collection. I have included a report on the importance of ethical decision making and strategies the ABC Toy Co. could adopt to ensure that all members of ABC Toy Company make ethical decisions.
This morning I received a memo from the manager of quality assurance. During a routine test, the department discovered a problem with one of the toys included in the elementary toy collection. The collection is scheduled to be shipped to South America by the end of this week. The metal whistle, included in the toy collection, tested slightly above, the United States, legally acceptable limits, of lead in toys intended for children under the ages of seven. It will cost the company $100,000 to reproduce and repackage the toy collection.
After reviewing the data, I’ve included the following information for consideration in rectifying the current problem. And I’ve included a personal recommendation for resolution.
First of all, we could choose to cancel the shipment. The advantage of this is option is that it lets others know that we are socially responsible. And, the company would be following U.S. law. The disadvantage is that profits will be eliminated, clients will be out product and we will be out the initial cost to produce and package and the product. We will also be out the additional costs to discard the unsafe product. The second option could be to reproduce and repackage the product. The advantage of this choice is that the product will meet U.S. legal standards and arrive to the consumer on time. The disadvantage is that it will cost the company $100,000 on top of the original cost to produce and package the toy collection.
And third, we could eliminate the whistle from the toy collection altogether. The advantage of this option is that the collection will arrive on time; there will be no extra reproduction and repackaging charges. It will be safe to use. We will maintain the integrity of the product and the company’s image. And, we will be adhering to the law. The disadvantage, if we eliminate the toy whistles from the collection we will need to lower the cost of the collection which equates to less profit for the shareholders. My recommendation is to eliminate the whistle from the collection. By eliminating the whistle from the collection we are providing a legal, safe product to the consumer. The product will arrive on time. We will be showing social responsibility having made an ethical decision (Miller,B. 2003-2011).This will also help build trust with our clients and the consumer, which leads to better business in the long term. My recommendation will have the least negative impact on the company. The product will be shipped. It will arrive on time. We will offer a discounted price to the consumer to make up for the loss of the whistle. We will build customer confidence by having made an ethical decision. And, client relations by keeping with our commitment to provide a quality product that is on schedule.
Social responsibility has played a big part in the decision making process. Making an ethical choice means taking into consideration all of people who will be affected by the final decision. The first option will let the stakeholders down. No product for the consumer, and more cost to the company. The second option will cost the company an additional $100,000. Plus, the shipment cannot be guaranteed to arrive on time. The last option, delivers the product on time, less the whistle, and follows legal guidelines for a safer product. The...