Jack Ward is working in product development for an auto parts contractor. Ward's firm received a large contract last summer to manufacture transaxles to be used in a new line of front wheel drive cars which a major auto manufacturer plans to introduce in the near future. The contract is very important to Ward's firm, which has recently fallen on hard times. The contract will generate revenues of over $150 million over the next five years. Just prior to obtaining the contract, half of the firm's employees, including Ward, had been scheduled for an indefinite layoff. The firm has already spent $30 million on R&D, facilities and equipment. Final testing of the assemblies ended last Friday and the first shipments are scheduled for three weeks from today. As Ward began examining the test reports, he discovered that the transaxle tended to fail when loaded at more than 127% of its rated capacity and subjected to strong torsion forces. Such a condition could occur with a heavily loaded car braking hard for a curve down a mountain road. The results would be disastrous. The manufacturer's specifications call for the transaxle to carry 130% of its rated capacity without failing. Ward showed the results to his supervisor and the company president who indicated that they were both aware of the report. Given the low likelihood of occurrence and the fact that there was no time to redesign the assembly, they decided to ignore the report. If they did not deliver the assemblies on time, they would lose the contract. Jack must now decide whether to show the test results to the auto manufacturer.

1.Identify the ethical dilemma(s).

2.State the relevant facts that are related to the ethical dilemma.

3.Apply at least two moral standards or ethical decision making rules of thumb to evaluate the ethical dilemma(s) and decisions needed.

4.Suggest additional information that might be needed to evaluate the situation and where that information might be obtained.

5.Provide a solution to the ethical dilemma(s) and give the rational for the solution selected.

6.Explain the influence of ""corporate culture"" in the behavior of the organization in making these business decisions.