How certain safety program may result in effective lost prevention tool
According to Polinsky and Shave, the gains accruing from product liability may also be offset by its overheads in a number of ways. One advantage is that the risk of product liability may tempt companies to improve the safety of the product. Nevertheless, this benefit is partial. For example, even when product liability is absent, firms would regularly be induced by market dynamics to improve the safety of its products since their sales are expected to reduce if consumers are harmed by their products. For instance, the market share of Tylenol reduced from 36.9% to about 6.8% in 1982 when over six people died after consuming Tylenol pills tainted by cyanide (2008, p.5). In addition, firms are under legal obligations to ensure that their products meet all the safety standards. As a result, product liability may not augment the influence of safety of a product.
Another advantage of product liability is that it increases the price of a product to mirror the riskiness related to the product and in so doing, may improve expenditure habits of the consumers. However, this benefit too entails a loss since the price of the product may increase extremely and result in low sales. Another advantage of product liability is that it recompenses losses suffered by customers who consume the product. However, this benefit is inadequate since victims of product related accidents are usually reimbursed by their respective insurance firms for all or part of the damages. Moreover, the benefits of product liability are potentially offset by its cost, which are usually extremely high (Polinsky & Shave, 2008, p.31).
How Aviation managers can use market forces in new safety element
One of the major issues that aviation managers grapple with is the safety of its passengers and crews. Safety in the aviation industry entails a number of aspects. It implies a distinctive aspect where airlines are constrained by funds to choice between servicing their airplanes and procuring more landing slots at the airport since they cannot have both. These choices show that each airline employs diverse parameters to select an alternative that will satisfy its customers and still realize a profit given the stiff competition in the aviation market (Gibbons, 1988, p.3). Aviation managers need to prioritize the safety of the industry by investing in system safety management program and improving the current safety measures accordingly. For instance, new focus should be laid on logical and systematic assessment of financial status and administrative changes at airlines, practical life cycle plans for overheads and staff for the NAS strategy, and dynamic analysis of programs in risk and human factors for novel technologies (Glendon & McKenna, 1995, p.32). Aviation managers thus need to avail financial resources, technical skills and system safety to sustain these programs (Gibbons, 1988, p.6).
Market Forces and Safety
Many firms have realized the significant input of an effective safety culture on their business activities. A good safety culture can offer a firm a competitive edge in the market. It can determine whether a firm wins or loses a contract. For example, most firms working in the offshore oil sector grant business deals to contractors who have constructive safety cultures. A safety culture also influences consumer’s way of thinking and may result to the design of safety aspects for a number of products that are later used for promotional purposes (Cooper, 2001, p.2). Thus, safety managers need to integrate a safety culture within the core business operations of their business. The same culture should also be reflected in their products and be used as a promotional gimmick.
References
Cooper, D. (2001). Improving safety culture: a practical guide. Hull: John Wiley & Sons Ltd.
Glendon, A.I., & McKenna, E.F. (1995). Human Safety and Risk Management. London: Chapman & Hall.
Gibbons, H. (1988). Safe Skies for Tomorrow: Aviation Safety in a Competitive Environment. Washington, DC: US Government Printing Office.
Polinsky, M., & Shavell, S. (2008). The Uneasy Case for Product Liability. Web.