Your company makes baby seats for cars and RVs. Your main product was designed s

Question

Your company makes baby seats for cars and RVs. Your main product was designed some time ago, and new and better engineering data are available, but your product has a good record with very few quality problems. Even in most crashes, the seats perform well. Still, the new information would allow you to upgrade the product significantly (about a 7% improvement). However, changing the manufacturing process would be a significant cost, which you are unlikely to recover because competing products are already cheaper than yours. You have a legal fiduciary responsibility to your company to maximize your profit. What should you do?<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

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Explanation / Answer

From an ethical standpoint, your company should either spend the additional money to improve its product or continue to produce the same product, but make consumers aware that they are using older technology. The company is responsible for selling a safe product that consumers can rely on, as well as alerting consumers of any possible safety hazard related to their car seats. By taking one of the paths listed above, you company is following through on their obligation to consumers and acting in a fully truthful and honest way. If they spend the money to improve their product, they have upheld their obligation by producing the best and safest product possible. If decide on the second approach, and continue to produce the same car seat but notify consumers that their technology is slightly less reliable, then they are putting the decision in consumers' hands. By giving consumer all possible information and allowing them to decide, the company acts in a way that is still truthful and honest. This in turn would still allow them to be an ethical company.

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