Precision Tool Corporation sells a product that is capable of seriously injuring consumers who misuse it in a foreseeable way, even though the label warns against the misuse. Does the firm have an ethical duty to take this product off the market? What con¬flicts might arise if the firm stops selling this product?

Answer 1

Ethical behavior can sometimes generate sufficient goodwill to warrant practicing it out of a desire for increased profits. By the same to¬ken, unethical behav¬ior can sometimes generate enough bad publicity to warrant avoiding it out of the same desire. A business firm's activities that are perceived as ethical and receive wide publicity can benefit the firm's owners in the short runand even in the long run if the firm's enhanced public image continues to attract more consumers to its products. There is nothing unethical about making a profit. It is the behavior that generates the profit that can be questionable. Business ethics thus has a practical element. A business firm should act in its best interest. A firm inter¬ested in profits should also be interested in the public's opinion. Of course, it is not a company's fault when consumers mis¬use its product despite the warning.If continuing to sell a product is not a strict violation of the law, stopping its sale would likely re¬duce profits. This could affect the firm's owners, employees, and others. But suspending sales could re¬duce injuries, and it could lead to increased profits from the sales of other products, if the suspension stops negative publicity. Whena busi¬ness en¬tity decides to re¬spond to what it sees as a moral or ethical obliga¬tion by removing a product from the market, an ethi¬cal conflict is raised be¬tween the firm and its employees and between the firm and its share-holders. This conflict arises directly out of the impact that the decision has on the firm's profits. If meeting this perceived obligation in¬creases the firm's profitability, then all parties "win," and the dilemma would be easily re¬solved in favor of "doing the right thing.".