Chat with AIExam 3: Ethics in Business
Recreation & Sports Equipment Corporation sells a profit-generating product that is capable of seriously injuring consumers who misuse it in a foreseeable way.They are contemplating adding a warning to the product but that warning will increase the cost of the product and they are worried that it may scare some potential customers who might not buy the product.Thinking about the two main theories of the role of business in society,discuss whether Recreation & Sports Equipment Corporation behaves ethically by continuing to sell the product without warning.
(71) 
VerifiedThere are two primary theories of the role of business in society.First,the historical role of business was to maximize profits.The second theory is that business should behave as a corporate citizen.
As a profit maximizer,Recreation & Sports Equipment Corporation should evaluate this decision to minimize costs and maximize profit to the company.Adding a warning would increase the cost (and decrease the profits)of the product.At the same time,a lawsuit because of injury could be very expensive.It is unclear whether the addition of a warning would result in decreased sales.The decision maker should have a professional analysis done of the financial impacts of the lawsuit as well as lost sales caused by either a lawsuit or the addition of a warning.
As a corporate citizen,the company may consider the triple bottom line.There is no information on the "planet" and so that factor won't enter the analysis.The "profit" analysis will be similar to that in the prior paragraph.The "people" analysis would include the impact on the consumers who might be injured by the foreseeable misuse.Because a warning could prevent this injury (either through more responsible use or by elimination of a sale to the consumer who might misuse the product),the corporate citizen model is likely to result in the addition of a warning.
Questions of what is ethical involve the extent to which a company has
(80) VerifiedB
Ethics is a branch of philosophy that focuses on morality.
(78) VerifiedTrue
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(82) 
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