x - ethical issues in industry

8/3/2019 X - Ethical Issues in Industry

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Product Design It is concerned with the efficient and effective

generation and development of ideas through aprocess that leads to new products


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Process of Product Design

Idea Generation Need Based Generation

Mid Stage

Design Solutions Production

Final Stage

Marketing


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Health

Health is the condition of being physically & emotionallyable to perform vital functions normally or properly

It includes general physical & mental well being

Employees who have good health are more efficient

Occupationally related diseases result from long termexposure

Employers are not held liable for that

Some diseases occur after exposure of 30 to 40 years


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Health Hazards Pneumoconiosis or black lung disease

Silicosis or white plague Caisson disease (among divers)

Contracts (glass blowers)

Skin cancer

Phosphorous poisoning

Mercury poisoning

Hatters shakes (produces tremors)

Routine exposure to hazardous substances: Asbestos, cotton dust, lead, cadmium, benzene, phenols,

pesticides, radiation, etc

Occupationally related diseases


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Safety The use of any product involves certain risk

Safety is freedom from danger Safety is likelihood that one will stay healthy

Working in safe environment

Employees working in safe environment are more

efficient

Occupational Safety & Health Act (OSHA) has forced allorganisations to be concerned

Social responsibility


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Safety Hazards

Loss of limbs

Burns

Broken bones

Electrical shocks Bruises

Sprains

Impairment of sight or hearing


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SAFETY

People consider, anything to be safe if the risk associated with

it and its use are judged to be acceptable.

Safety is frequently thought of in terms of something asfairly safe or relatively safe

The safety norms or standards are mandatory/statutory whichare as per various laws like pollution control, Indian StandardInstitution, etc.

The norms/standards can be set voluntarily by the Firm

Safety would mean the safe operation of systems and theprevention of either human caused or process caused disaster.


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Safety

Products Services Process Disaster

ProductDesign

ManufacturingProcess


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Product Safety

Products are to be designed in such a way to

reduce the accidents and ease of operations for the

customers.

Products should be sold with proper testing for

safety, else it would lead to accidents.

No compromises on safety quality standards

The standards complied by ISI should be properlyregulated.


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High Risk/ High Safety

High cost price

Aircraft, nuclear power

High Risk/Low Safety

Low cost high price

Automobiles

Low Risk/ High Safety

High cost medium price

Electrical products

Low Risk/Low Safety

Low cost Low price

Computers

High Low

High

Low

Safety

Risk


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Safety in Services

Postsales

Repairs with original equipment spare parts

Avoid duplicate spare parts

Test after installation and repair

Adequate training should be given to safety

engineers, testing engineers and quality

engineers.

Safety audit.


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Process at work place

Includes manufacturing process in the shop floor.

Work place has:

Static equipments like machines

Operating equipments like material handling

equipments

Raw materials


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Preventive Measures Should carry instructions about the safety precautions

prominently displayed.

Training to escape accidents Clean shop floors not oily and slippery.

Space allocation clearly marked.

Yellow line to show place for movement.

Proper maintenance. Avoid spill over's.

Proper storage of raw material.

Provide glows and shoes to the persons handling chemical andother hazardous materials

Use of mask and caps over head.

Process should prevent mal functioning of equipments.

Selection of technology.

Treatment on gases and water before releasing in atmosphere

Execute safety norms.


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Handling of Raw Materials

Their properties should be clearly mentioned

A Material Safety Data Sheet (MSDS) should

be submitted by chemical companies.

Safety guidelines should be given before the

use of any Toxic


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Disaster

Engineers should plan for disaster .

Training and education should be given to

users in event of any disaster.

Firefighting training

Simulation studies are used while training

people for disaster.

All engineering companies assign safety one of

the highest priorities.


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CERC

Consumer Education & Research

Centre

CERC has a full fledged large laboratories to

conduct tests and give performance results. CERC purchased 14 brands of ceiling fans from

market of 1200mm and were put through 22 tests.


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Obligation to Inform Consumer Doctrine of Caveat Emptor

Business obligations to consumers never cease Consumers have right to know

Manufacturers inform consumers:

The potential risk of danger to which they are exposed

Nature & source of risk, condition under which risk arises

How great it is & how to get rid of it, prevent or overcome it

Consumer has to use it with care taking due precautions

Manufacturers should produce goods that are uptoconsumers expectations

Consumers need intervention of experts & technical mento decide safety standards of products

I d i


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Introduction A product is more than just a physical object.

The degree to which it satisfies customer expectations

will be the most powerful and lasting communication ofall.

A product displays essential physical attributes such asquality, performance and design.

Also it entails implied attributes such as reliability,warranty with assured after sales support besidesother thing.

Business obligations to consumer never cease, for they

imply fair dealing and product safety all the times. People have a right to adequate information of the

goods they purchase and a fundamental right not to beharmed by the goods and services they purchase.


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Environmental protection and product safety

It is the second order moral obligation of the

organisations to ensure environmental protection inthe manufacture of their product

However, it is equally clear that people will acceptsome degree of risk or harm in return for greater

comfort or good.

If the main question on environmental protection is,how much harm is safe?

On product safety it would be, how much safe issafe?


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Safety Standards

How much safe is safe?

How much safety is demanded with respectto a particular product or activity?

Whether the product comes up to thestandards set by the government or public?


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The Corvairs had a significant design causingsteering difficulties. This led to several seriousaccidents. No improvement was made and GMrefused to recall the cars made. ConsumeristRalph Naders Book Unsafe at any speedcriticized it most and the resulting fight betweenhim and GM which cost company heavily,tarnishing its image and giving it a reputation for

unconcern for customer safety due to this salesand profit were affected.

General motors and Firestones flirting withthe danger with their 500 series radical

tyres.


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In October 1978 Firestone was forced torecall its 500 series radical tyres after the US

National Highway Traffic SafetyAdministration Had received 14000consumer complaints and hundreds ofaccidents.


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For obtaining benefits of free market followingcharacteristics exists.

There are numerous buyers and sellers.

Everyone can freely enter and exit market.

Everyone has full and perfect information.

All goods in the market are exactly similar. There are no external costs.

All buyers and sellers are rational utility

maximizers. The market is unregulated.


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Adequate information about products. Can also be obtained from consumer union.

Consumers are inconsistent and irrational.

Still high profits are extracted fromconsumers.

Consumer laws for consumer protection.


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The contract view of business

duties to consumers Both the parties to the contract must have full

knowledge of the nature of the agreement they areentering.

Neither party to a contract must intentionallymisrepresent the facts of the contractual situation tothe party.

Neither party to a contract must be forced to enterthe contract under undue influence.


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Four main duties to consumers

Duty to comply

It is the duty to provide consumers with aproduct that lives up to those claims that thefirm expressly made about the product, which

led the customer to enter the contract freely. Duty of disclosure

This implies that the seller who intends to entera contract with a customer has a duty todisclose exactly what the customer is buyingand what the terms of sales are.


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Duty not to misrepresent

Misrepresent implies when the seller represent it in

a way deliberately intend to deceive the buyer intothinking something about the product that the sellerknows is false.

Duty not to coerce

It is when the seller takes advantage of a buyersfear or emotional stress to extract consent to an

agreement that the buyer would not make if thebuyer were thinking rationally.

Th D C Th


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The Due Care TheoryThe duecare theory of the manufacturer's duties to consumeris based on the idea that consumers and sellers do not meet as

equal and that consumers interests are particularly harmed bymanufacturer who has a knowledge and an expertise that theconsumer lacks

The due care view is that consumer must depend on the

greater expertise of the manufacturer.

Due care must enter into the design of the product, the reliablematerial , the manufacturing processes, labels and instruction

attached to the product.

Failure to take such steps is a breach of the moral duty toexercise due care


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The Duty To Exercise Due Care

Design

Production

Information


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Problem With Due Care

There is no clear method for determining whenone has exercised enough "due care

It is assumes that the manufacturer cannot

discover the risk that attend the use of a productbefore the consumer buys and uses it

The due care view appears to some to bepaternalistic


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Manufacturers obligation to inform customer of..

The potential risk of the danger to which they are

exposing themselves

The nature and source of risk and the conditionunder which the risk arises

How great is it and how to get rid of it , prevent orovercome it

If there is any alternative and if so what theircomparative merit lies in.


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THE SOCIAL COST VIEW OFMANUFACTURERS DUTY

The view that a manufacturer should pay the costof any injuries sustained through any defects in theproduct even when the manufacturer exercised all

the due care in the design and manufacture of theproduct and has taken all reasonable precaution towarn user of every foreseen danger .


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The theory is strong version of caveat vendor

The theory is based on legal doctrine of strictliability

STRICT LIABILITY

A legal doctrine that holds that manufacturermust bear the cost of the injuries resulting fromproduct defects regardless of the fault



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SOCIAL COST VIEW AND SOCIETY

This view argues that injuries are externalcost that should be internalized

Internalization of the costs results in

increased prices of the product whichsociety has to pay


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POSITIVE IMPLICATION

Efficient use of scare natural resources

Manufacturer will strive to cut down the socialcosts of injuries

Manufacturer will be able to distribute the lossesamong all the user of the product by increasing theprices


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PROBLEMS It is unfair to manufacturer

-it violates the compensatory justice

It is unfair to consumer also

It will encourage carelessness in consumers

It focuses on financial burdens on manufacturerand insurance carriors


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ADVERTISEMENTS BY TOBACCOCOMPANIES IN PAST

There is no proof that the cigarette smoking is oneof the causes

A cause and effect relationships between smokingand disease has not been established

Nicotine is not addictive


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OTHER PRODUCTS THAT POSES THREAT TOCONSUMER SAFETY

ALCOHOLIC DRINKS

SOFT DRINKSPROCCESSED FOOD

USE OF PRESERVATIVES IN FOOD

USE OF ADDICTIVES IN FOOD TO ENHANCE THECOLOR AND TASTE

DYES USED


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The Ethics of Consumer safety


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Introduction

A product is more than just a physical object.

The degree to which it satisfies customerexpectations will be the most powerful and lastingcommunication of all.

A product displays essential physical attributes suchas quality, performance and design.

Also it entails implied attributes such as reliability,warranty with assured after sales support besidesother thing.


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Contd.

Business obligations to consumer nevercease, for they imply fair dealing andproduct safety all the times.

People have a right to adequate

information of the goods they purchaseand a fundamental right not to be harmedby the goods and services they purchase.

Environmental protection and product


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Environmental protection and product

safety

It is the second order moral obligation of theorganisations to ensure environmentalprotection in the manufacture of their product

However, it is equally clear that people willaccept some degree of risk or harm in return forgreater comfort or good.

If the main question on environmental protection

is, how much harm is safe?on product safety it would be, how much safe is

safe?


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Whether the product comes up to thestandards set by the government orpublic?

From this it follows that as knowledge andtechniques advance the level of acceptance

risk will diminish

General motors and Firestones flirting with


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The Corvairs had a significant design causingsteering difficulties. This led to several seriousaccidents. No improvement was made and GMrefused to recall the cars made. Consumerist

Ralph Naders Book Unsafe at any speedcriticized it most and the resulting fight betweenhim and GM which cost company heavily,tarnishing its image and giving it a reputation for

unconcern for customer safety due to this salesand profit were affected.

General motors and Firestone s flirting withthe danger with their 500 series radical

tyres.


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In October 1978 Firestone was forced to recall

its 500 series radical tyres after the USNational Highway Traffic SafetyAdministration Had received 14000consumer complaints and hundreds of

accidents.


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MARKET AND CONSUMER

PROTECTION

Free market approach.

Buying safer products. Turning down unsafe products.

Meeting the demands.


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For obtaining benefits of free market followingcharacteristics exists.

There are numerous buyers and sellers.

Everyone can freely enter and exit market.

Everyone has full and perfect information.

All goods in the market are exactly similar. There are no external costs.

All buyers and sellers are rational utilitymaximizers.

The market is unregulated.


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Adequate information about products. Can also be obtained from consumer union.

Consumers are inconsistent and irrational.

Still high profits are extracted fromconsumers.

Consumer laws for consumer protection.

The contract view of


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The contract view of

business

duties to consumers both the parties to the contract must have full

knowledge of the nature of the agreement they areentering.

Neither party to a contract must intentionallymisrepresent the facts of the contractual situation tothe party.

neither party to a contract must be forced to enterthe contract under undue influence.


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Four main duties to

consumers

Duty to comply

is the duty to provide consumers

with a product that lives up to those claimsthat the firm expressly made about theproduct,which led the customer to enterthe contract freely.


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Duty of disclosure

thisimplies that the seller who intendsto enter a contract with a customer has aduty to disclose exactly what the customeris buying and what the terms of sales are.


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Duty not to misrepresent

misrepresent implies when the

seller represent it in a way deliberatelyintend to deceive the buyer into thinkingsomething about the product that the

seller knows is false.


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Duty not to coerceis when the seller takes advantage

of a buyers fear or emotional stress toextract consent to an agreement that thebuyer would not make if the buyer werethinking rationally.


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The Due Care Theory

The due care theory of the

manufacturer's duties to consumer isbased on the idea that consumers andsellers do not meet as equal and thatconsumers interests are particularly

harmed by manufacturer who has a

knowledge and an expertise that theconsumer lacks


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The due care view is that consumer must

depend on the greater expertise of the

manufacturer.

Due care must enter into the design of the

product, the reliable material , themanufacturing processes, labels andinstruction attached to the product.

Failure to take such steps is a breach of themoral duty to exercise due care

Th D T E i D


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The Duty To Exercise Due

Care

Design

Production

Information

P bl With D C


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Problem With Due Care

There is no clear method for determining when

one has exercised enough "due care

It is assumes that the manufacturer cannot

discover the risk that attend the use of a productbefore the consumer buys and uses it

The due care view appears to some to bepaternalistic


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Manufacturers obligation to inform customer of..

The potential risk of the danger to whichthey are exposing themselves

The nature and source of risk and thecondition under which the risk arises

How great is it and how to get rid of it ,prevent or overcome it

If there is any alternative and if so what

their comparative merit lies in.

E E


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The view that a manufacturer should pay the costof any injuries sustained through any defects in theproduct even when the manufacturer exercised all

the due care in the design and manufacture of theproduct and has taken all reasonable precaution towarn user of every foreseen danger .

THE SOCIAL COST VIEW OF


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The theory is strong version of caveat vendor

The theory is based on legal doctrine of strictliability

STRICT LIABILITY

A legal doctrine that holds that manufacturermust bear the cost of the injuries resulting fromproduct defects regardless of the fault



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SOCIAL COST VIEW AND SOCIETY

This view argues that injuries are externalcost that should be internalized

Internalization of the costs results inincreased prices of the product whichsociety has to pay


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POSITIVE IMPLICATION

Efficient use of scare natural resources

Manufacturer will strive to cut down the socialcosts of injuries

Manufacturer will be able to distribute the losses

among all the user of the product by increasing theprices


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PROBLEMS It is unfair to manufacturer

-it violates the compensatory justice

It is unfair to consumer also

It will encourage carelessness in consumers

It focuses on financial burdens on manufacturerand insurance carriors

ADVERTISEMENTS BY TOBACCO


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ADVERTISEMENTS BY TOBACCOCOMPANIES IN PAST

There is no proof that the cigarette smoking is oneof the causes

A cause and effect relationships between smokingand disease has not been established

Nicotine is not addictive


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OTHER PRODUCTS THAT POSES THREAT TOCONSUMER SAFETY

ALCOHOLIC DRINKS

SOFT DRINKS

PROCCESSED FOOD

USE OF PRESERVATIVES IN FOOD

USE OF ADDICTIVES IN FOOD TO ENHANCE THECOLOR AND TASTE

DYES USED

x - ethical issues in industry

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