Introduction
Decision-making is a complicated process that implies considering different alternatives and evaluating the outcomes. While choosing between two or more options, the deciding party relies on various standards and principles, including ethical norms. Ethics is particularly important in the context of organizational decision-making as, in this case, the process involves a wide range of stakeholders, and the potential outcomes should be assessed with particular care.
As a result, ethical conduct plays an important role in determining an organization’s image. In practice, some companies still fail to behave in accordance with their proclaimed ethical codes, ruining their own reputations by their behavior. The paper at hand suggests analyzing two case studies that illustrate both ethical and unethical decisions carried out by well-known car companies.
Ethical Decision-Making: Tesla Case Study
Tesla Motors provides a stellar example of ethical decision-making that is performed at the organizational level. Due to the company’s wide use of innovations, Tesla Motors has become a true revolutionary in the relevant industry. As a result, it is not surprising that this company has faced numerous ethical dilemmas throughout its history. For example, in 2013, car accidents caused batteries to burst into fire, and Tesla’s Model S was essentially involved.
This horrifying possibility became the pivot of public discussion. The National Highway Traffic Safety Administration began investigating the case, and the incident immediately received critical media coverage. The federal investigation showed that the damage was not Tesla’s fault. In the meantime, Tesla still made and carried out a decision to replace the batteries in all Tesla Motors Model S cars at no cost to the consumers, on a voluntary basis, “to give Model S owners complete peace of mind” (The Associated Press, 2014, par.8).
First and foremost, it should be noted that this case is a good example of organizational decision-making that is relevant to ethical standards. The key affected party, in this situation, is the company’s clients. Hence, by making this decision, Tesla proved its determination and decisiveness to act in accordance with the interests of the clientele, rather than solely in the interest of profit.
Secondly, it should be pointed out that Tesla had at least two alternative solutions in this situation. Thus, the company would hardly have received any criticism had it preferred to stay on the sidelines, as this decision was rational from the perspective of justice. As soon as the investigation proved that Tesla’s part in the scenario was not a factor, replacing the batteries for free did not seem to be an obvious, mandatory solution. Thus, from a caring perspective, Tesla’s action is of high ethical value.
Finally, it can be assumed that, despite the initial cost of this decision, Tesla still profited from it. Hence, changing the batteries could have been a contribution to the company’s positive image: It is possible that the positive connotations it acquired helped to attract new clients, as well as having the effect of enhancing the loyalty of Tesla Motor’s existing customers.
Unethical Decision-Making: Toyota Case Study
An opposite example, illustrating unethical decision-making in an organization, is Toyota Motor’s case. A series of scandals related to Toyota has been publicized in the media throughout the past decade. In one instance, the company preferred to ignore numerous complaints coming from its customers about acceleration problems. Instead of performing essential changes and improving the acceleration system, the company chose to put the blame on the drivers and take no corrective action (Gorman, 2010).
First of all, it should be noted that this decision-making involved several parties. Thus, it is not only the customers who were essentially affected by the acceleration problems but the partner dealers as well. The latter, in their turn, had to cope with streams of complaints about the quality of the cars sold. Therefore, the company’s conduct was evidently unethical – it showed that Toyota was not prepared to guard the interests of its stakeholders, notwithstanding the circumstances.
In addition, the decision under discussion can be considered unethical from a utilitarian perspective as well. According to the relevant theory, a moral decision is supposed to be made on the basis of the potential outcomes. In other words, it is essential to evaluate the extent of the negative impact that the decision might possibly produce. In the case of Toyota’s decision, the size of the negative impact is excessive – acceleration problems can result in car accidents, putting the lives of customers at risk.
Lastly, it is critical to analyze the cost of this unethical decision and the likely impact on profit. On the face of it, the company managed to avoid substantial expenses by refusing to improve the acceleration system. Thus, the decision was initially profitable. Meanwhile, it inevitably caused the clients’ discontent and had a negative impact on the company’s image. As a result, it might be suggested that, in the future, the company’s failure to act is likely to result in the loss of the clients’ loyalty and their shift to Toyota’s competitors. In other words, it might turn out that the company’s initial profit cannot compare to the cost it will be obliged to pay for its unethical conduct.
Reference List
Gorman, S. (2010). Lawsuit claims Toyota ignored safety issues. Reuters. Web.
The Associated Press. (2014). U.S. closes investigation into Tesla electric car fires. CBC News. Web.