Case Study: Nexel Corporation

Nexel Corporation Case Study
Name
Institutional Affiliate
Nexel Corporation Case Study
Introduction
Business organizations are tasked with the responsibility of doing what is right or morally acceptable to all its stakeholders. The accepted moral codes conduct and behavior towards the stakeholders involved are guided by a consensus of what is right or wrong by the different parties involved. The Nexel Corporation case study provides an excellent platform for the analysis of the ethical issues and concerns affecting business organizations around the world. It also allows for the analysis and evaluation of such issues through the lens of different ethical theories towards developing an informed understanding of the ethical issues and dilemmas that may arise across different workplaces. Provided herein is a comprehensive report highlighting some of the ethical issues facing the company and theoretical evaluation of the same towards establishing an informed understanding of the underlying factors defining the ensuing ethical dilemmas.
Ethical Issues
An interview with the corporation’s head of legal department, Linda Wright, also highlights another ethical issue facing the company in the form of accountability. It is evident that the company, through its management, approved the production of the faulty model despite knowing the potential harm to users or consumers. The company’s vice president of car engineering, A. D. Rodford supervised a feasibility study that approved the new design with mechanical complications. The Corporation’s Product Planning Committee was also complacent in the approval of the concept that allowed for the manufacture of the new line of subcompact cars. An accident involving one of the model’s consumers, Mrs. Ray, makes for a manifestation of the potential harm posed by the approval of the faulty design and concept behind the manufacture of the Vinta line of cars. The design of placing the fuel tank behind the rear axle reduces the crushing space upon rear contact from another vehicle, which may result in pushing the tank forward and puncturing of the same by the flange or bolts within the differential housing. Such was the case with Mrs. Ray’s Vinta, whose rear collision with a Ford Galaxie at 28 to 37 miles per hour led to an explosion of the car and severe burning of its occupants. Mrs. Ray died from the complications arising from the accident while the other occupant, the thirteen-year-old Richard, suffered severe burns’ complications and lost several fingers. Richard required intense and extensive care in attempts to restore his appearance. Both victims suffered the adverse consequences of the management’s complacency in disregarding the set protocols and procedures in the manufacturing of new lines of automobiles. Failure to address the safety concerns requiring the adjustment of the fuel tank’s position to increase the car’s crushing space exposed users to fatal outcomes in case of a rear collision or contact with another vehicle. The legal team faces an ethical dilemma in the form of upholding its responsibility of providing legal protection to the corporation’s senior management and attending to the moral obligation of enhancing the company’s accountability to its actions. It is also the corporate social responsibility of the company to attend to its liabilities arising from the incompetence of its senior management in addressing the safety concerns of its products. Consumers make for one of the important stakeholders within business organizations who play a significant role in the achievement of sustainable growth and development of the firm. Exonerating the senior management’s responsibility or accountability for the occurrence of the accident and stalling the victim’s liability claim on the company contradicts the firm’s corporate social responsibility. Nevertheless, it is the duty and responsibility of the legal team to protect the interests of the company irrespective of the effects of its actions on other parties. These duties transcend over the individual concern for what is considered and widely accepted as the right course of action or way of doing things. Members of the legal team take a course of action that functions in the best interest of the company as failure to discharge their mandates would result in redundancy and incompete3nce on their part. Failure to preserve the company’s interests is also a breach of the profession’s ethical code of conduct, which may result in adverse effects on their careers and practice. The fact that the legal team may have knowledge of the company’s complacency in the liability claim further creates a conflict of interest scenario regarding their perceived individual reservations towards protecting the accountable members of the senior management and the company at large.
The corporation’s engineer in charge of crash testing, Harley Strop, presents a complex situation touching the company’s code of conduct on the privacy of confidential information and personal obligation to do what is right concerning the company’s complacency to producing faulty cars. Harley Strop confirms the company’s complacency in releasing a faulty model into the market by admitting to the fact Vinta failed to meet the federal regulations to withstand the impact of a fixed barrier at 20/mph and 30/mph respectively. Crush testing of the Vintas using fixed barrier at the outlined speeds led to the moving forward of the fuel tanks and subsequent puncturing by bolts on the differential housing, which resulted in excess leakage of fuel into the driver’s compartment. Models with diverse modifications related to the placement of the fuel tank on the subcompact care lead to positive results in withstanding the impact on a fixed barrier at speeds of 21/mph and 31/mph, respectively. The different results were presented to the senior management concerned with the approval of the designs and concepts accompanied by a breakdown of the costs of making the necessary modifications for enhancing the safety of the model. The senior management ignored the crush testing report and recommended modifications by insinuating higher regard for sales at the expense of the consumer’s safety. The management not only ignores Strop’s calls for implementing the recommended modifications but also challenge him to think of the company and his co-workers in what appears to be an attempt to silence his dissent. Strop is denied the right to express participation in enhancing the safety of the consumers through proposed modifications on the design of a new line of cars. The management’s disregard for the consumers’ safety reflects an ineffective code of ethical conduct and behavior of the organization that disregards its accountability to one of its key stakeholders. The crash testing engineer uses different channels in the attempt to gain support for the implementation of modifications on the model without any success. The corporation’s cultural orientation appears to facilitate complacency towards breaching the code of ethical conduct and behavior in carrying out its daily operational activities. Both the senior management, including A. D. Rodford and other staff members support the company’s decision to move on with the production and release of the new line despite knowing the safety concerns of the model. The organization is only focused on profitability and revenue generation without any consideration for the means through which it achieves the objectives. The corporation’s disregard for ethical conduct in dealing with consumer safety concerns is also evident in the confidential cost-benefit analysis report of the firm on implementing the recommended modifications on the model. Strop gains access to the confidential report confirming the company’s complacency in exposing consumers to potential harm and fatal outcomes in the occurrence of collisions, which places him in an ethical dilemma as he is set to appear in court to testify on the crushing and burning of the company’s Vinta. The crash testing engineer is bound by the responsibility of upholding the privacy of confidential information contained in the cost-benefit analysis report and submitting to the oath of telling the truth in court concerning the matter. Harley Strop also faces an ethical dilemma in deciding whether to safeguard his integrity and expose the company or protect his position at the organization with the promise of reaping the benefits of profits gained from the sales of the faulty model.
Nexel Corporation’s marketing department also makes for another ethical concern in its handling of the model’s promotion in the market. The head of marketing, John Richardson, is unfazed by the company’s release of a faulty model into the market and instead focuses on maintaining its competitiveness in the market. The fact that that the corporation’s marketing department is charged with maintaining higher sales volumes of the new model creates an ethical dilemma for the company as it fails to create a balance between profitability and consumer safety. The department overlooks the safety concerns of the model and continues with its advertising campaigns to entice more consumers, especially the young consumers aged between 16 to 24 years. Findings from the market research indicate that the firm recognizes wishes to take advantage of the carefree attitude among the young people. The marketing approach seeks to appeal to the carefree attitude of the young consumers, who often pay little attention to the detailed features such as safety and reliability of the automobile. The proposed advertisement features young enjoying the fastness of the car with total disregard for the safety concerns of the car. The slogan used in the advertisement is also misleading as it emphasizes on the users’ carefree nature for a car that deserves to be driven with a lot of caution. The advertisement lacks accuracy and clarity of information as it leaves out the safety concerns to consider in purchasing the new model. Enjoying the fast rides of the car is bound for misinterpretation by the targeted young market as it encourages dangerous driving. Another advertisem...