Question
Fuego Phones International is a corporation that recently kicked off the sale of its new smart phone, the Rapid Fire 6. After three months of
Fuego Phones International is a corporation that recently kicked off the sale of its new smart phone, the Rapid Fire 6. After three months of sales, the management team has received some troubling reports that the Rapid Fire 6 phones are unexpectedly catching on fire. The management team asks the accounting department to run some numbers to determine how much it would cost to recall the Rapid Fire 6 phones, to suspend manufacturing, and to conduct more tests to determine the phones safety. After running some numbers, the accounting department states that it would be more cost-effective to leave the phones on the market shelves and propose settlement proceedings with anyone who is injured and initiates a lawsuit. In-house legal counsel agrees and states that most consumers will not seek legal action against Fuego Phones International. You are the CEO of Fuego Phones International and must decide what to do. Remember, if you recall the Rapid Fire 6 phone, it will result in a delay of dividends paid to shareholders, loss of market share, and a loss in revenue, affecting shareholder profit. Consider the following questions regarding this example: What would you do, and why? Depending on the decision, under what ethical reasoning theory are you operating Fuego Phones International under? Would you leave the Rapid Fire 6 phone on the shelves because you feel your duty as a corporate manager is to maximize shareholder profits? Would you recall The Rapid Fire 6 phone because you feel the corporation owes a duty to the public, consumers, and the government in terms of social responsibility? Would your answer change if the Fuego Fire 6 phone was only sold internationally? Identify a company that is acting in a socially responsible manner and discuss specifically what they are doing.
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