UESTION 1 Fact Scenario A: You are the Vice-President for Sales at a major Autom

Question

UESTION 1

Fact Scenario A:

You are the Vice-President for Sales at a major Automobile Company.  In response to current needs you have developed an economical sub-compact vehicle.  You anticipate selling 11 million vehicles on this production run.

One of your engineering teams discovers that due to the design there is a higher probability of the vehicles catching fire upon rear impact accidents.  You are given a Cost/Benefit Analysis which shows it will cost $22.00 per vehicle to change the design at a cost of  $242,000,000.00.  This change will result in 180 less deaths.

The National Highway Traffic Safety Administration shows the “cost to society” for each estimated fatality is $400,000.00.  This means the design change will save $72,000,000.00.  

Assume that this is an accurate assessment of the costs/benefits involved (that is, you should assume that no additional costs or benefits will arise)(although keep in mind that the true costs of a particular course of action may not always be accurately identified and quantified.)

Refer to Fact Scenario A: Question A1:

Using the standard Cost-Benefit Analysis it does not make sense to make the design change.

True

False

1 points   

QUESTION 2

Refer to Fact Scenario A: Question A2:

Profit Maximization theory (which emphasizes profits and often has a short-term focus) and Profit Optimization theory (which emphasizes profits over time, requiring a consideration of the long-term value and health of the company) might allow for different conclusions regarding whether the design change should be implemented, especially if there are concerns that failure to implement the design change would hurt the company's reputation.

True

False

1 points   

QUESTION 3

Refer to Fact Scenario A (and, again, assume that the assessment of costs/benefits listed above is accurate and complete): Question A3:

Utilitarianism holds that the ethical decision will result in the greatest good to the greatest number, with a focus on costs and benefits to society as a whole.  Thus, it is likely that a Utilitarian analysis of this problem would indicate that the design changes should not be made.

True

False

1 points   

QUESTION 4

Refer to Fact Scenario A: Question A4:

Duty-Based or Kantian Ethics, with a focus on human dignity, human rights, and the imposition of the categorical imperative, would probably require that a design change be made.

True

False

1 points   

QUESTION 5

Refer to Fact Scenario A: Question A5

Using stakeholder theory, who should the company consider when making its decision about whether to implement the design change?

The shareholders, only.

The customers/purchasers of the car, only.

The customers/purchasers of the car and the shareholders, only.

The shareholders, the customers/purchasers, as well as potential customers, the employees, and the community as a whole are the most significant stakeholders in this scenario.

1 points   

QUESTION 6

Refer to Fact Sceanrio A: Question A6

Which of the following business decisions would be the most appropriate from an ethical and legal perspective?

You would decide not to implement the design changes, because businesses may only use cost-benefit analysis to make decisions.

You would decide not to implement the design changes, because affordability and convenience are always the most important considerations.

You would decide not to implement the design changes, but only if the risk of harm was fully disclosed to consumers, consumers had indicated that they wanted more choices, especially more affordable vehicle options, the car would not be affordable if the design change was made, regulators were informed of the risk and had not required a design change, and there were no additional known safety problems with the vehicle which would enhance the safety risk already identified.

You would implement the design changes, because it is never ethical to put human life at risk in the interests of affordability or convenience.

The shareholders, only.

The customers/purchasers of the car, only.

The customers/purchasers of the car and the shareholders, only.

The shareholders, the customers/purchasers, as well as potential customers, the employees, and the community as a whole are the most significant stakeholders in this scenario.

Explanation / Answer

A1. False- Cost Benefit Analysis is an important parameter for design change

A2: True: Hence a change should be adopted only when both the process agree.

A3: False: Utilitarian method suggests that this change should be done because this change will benefit the society.

A4: True.

A5: d. All are stake holders.

A6: d.

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