Evaluation of Metal Whistle Containing Low Lead Level for South American Shipment

Cale C. Mitchell

Western Governors University

Table of Contents

Situation Synopsys 3
Possible Alternatives 3
Recommended Course of Action 4
Future Actions 5
References 6

Whistle Evaluation

Situation Synopsys

Toy Company had developed and sold a child’s toy set containing a whistle. These sets are set to be sent to the South American market, primarily elementary schools, for order fulfillment. The toy has been found to contain levels of lead that exceed what is considered safe in the U.S. marketplace.

Possible Alternatives

In order to evaluate each of the following possible alternatives Toy Company needs to establish some level of a decision making matrix. For example each alternative needs to be evaluated on three core questions. What is the cost, in dollars, of this alternative? What is the potential for harm to the consumer by using an alternative? What is the long term impact to Toy Company by moving forward with this alternative? In the process of asking and answering all of the questions a more plausible outcome evaluation will develop. In the evaluation and decision making process the long term impacts need to also be considered, some of the choices may potentially strengthen the relationship with the consumer. All of the considerations need to always be tested with the question “Is this the right thing to do?”. Each alternative that is provides explores the practical aspects but the overarching question needs to address “the right thing”. By selecting one of the alternatives your value system, your character or your integrity should not be compromised (Myatt, 2012).
There are a variety of choices Toy Company has to deal with this issue. This first potential course of action would be to do nothing, allow the internal quality control process to document the findings and reference the lead safety standards for the intended marketplace. Toy Company would most likely arrive at this point by simply utilizing the standards that are in place. Toy Company clearly has an internal control process that would be able to identify issues but there is little in the way of directions once an issue has been identified. This decision does nothing to identify the problem nor does it do anything to mitigate future issues. Additionally this option would not require any repackaging or incur any additional production costs. Also this would also not violate any local law given that they toy was to be exported to other markets. Toy Company does run the risk of public relations issues if independent testing shows the elevated lead levels and that nothing was done to address this fact other than to ensure that the toy set was not sold in the U.S. marketplace. Toy Company could, justifiably adopt the stance that they are operating within the legal limits established by the government, but that would require a large amount of press and continually establishing that the company did not act irresponsibly. This option comes with the least amount of upfront cost but with the highest level of potential of loss of consumer trust and future funds. Another option would be to remove the whistle from the toy set altogether. This would require the repackaging of the toy set and should include a partial refund of the total retail cost of the set. Along with the partial refund, a letter explaining the company’s commitment to the highest safety standards in the market place. The consumer may have issue with the set being repackaged and sold as something different from what they ordered. It is possible that some may feel that this was a “bait and switch” sales tactic. It is vital that the company hold press conferences about the change in the product and what the actions will be moving forward. Moving forward with this decision would require the involvement of management and clear direction would have to be passed down to line workers. Making this decision should come from the core values that Toy Company has or will have with the development of a code of ethics that includes a value statement. In many cases if you give the consumer the opportunity to question and understand the actions that are being taken the consumer will find that the company does in fact have the consumers’ best interests at heart. This option would prevent any type of legal action based on lead exposure and the associated expenses of a legal defense. There would be expenses in repackaging the set and the cost of the refund. It is possible to avoid some of the repackaging expense by just removing the whistle and using the existing packaging, a simple sticker could be placed in the whistle area instructing the customer to read the enclosed communication. A third option would be to remove the whistle, remanufacture it ensuring it meets the higher standards, repackage with the new whistle, destroy the old whistles and move on. This option will increase ship time, cost for repackaging, cost of the original whistle, cost for the new whistle and the cost to destroy the old lesser quality whistle. Toy Company would still avoid potential of legal action. This option would avoid any type of public admission that there was a problem with the product in the first place and avoid a potential public relations debacle. Given that the company could move forward without any kind of consumer interaction may provide some advantages but there should be a simple press release about the company’s decision to protect its consumers by complying with the highest global standards possible. There are many pros and cons associated with each of the possibilities provided. To arrive at the list of suggestions Toy Company needs to understand the consumer and their relationship. If Toy Company wants to maintain a long term, mutually beneficial relationship with the customer then each one of the possibilities needs to be examined and a determination made that supports that outcome. As explained in each option, the risk of loss of customer is examined and there are clearly some options that best maintain that valued relationship.

Recommended Course of Action

It is my recommendation that Toy Company remove the whistle from the packaging insert a new whistle and ship the toy set with a notice that they whistle was replaced with a new, safer model. This notice should also include the reason the whistle was removed from the set in the first place. Additionally we need to explain the companies continued commitment to our customers, ensuring their safety and enjoyment of the products that Toy Company produces. This option is by far not the cheapest option, but it does do a lot to reinforce consumer confidence and the creations of a lifelong customer base. A basic business model would show that business development has two key components; 1. Keep the customers that you have and 2. Develop new customers. If Toy Company violates the basic trust of the customers that they already have they will lose them to competitors and they will drive away potential customers due to the negative reviews of the previous customers. By simply putting the customer first over pure profit, and communicating this action the company can stabilize the existing customer base and rely on them to drive positive word of mouth. Toy Company has a responsibility to provide safe toys that are manufactured to the highest safety level. As a company there is a need to communicate that this is a guiding principle. To better communicate these principles a comprehensive code of ethics needs to be developed. A well written code will provide the consumer a set of expectations and provide Toy Company employees the tools to meet those expressly stated expectations. Given that the target market for our products are children we have an even greater responsibility to ensure safety. Companies who willfully disregard the safety of children don’t last long and usually end up in a court room answering for their actions. As a general philosophy it would go a long way to adopt a philosophy along the lines of the medical field that simply states, Do no harm.

Future Actions

In order to ensure that Toy Company does not have any difficulty in making decisions like this in the future, there are a few things that can be done to guide corporate culture in a positive direction. If Toy Company were to develop a list of values and communicate those values to the staff and consumer it would provide a relevant basis for corporate decision making. An example would be Toy Company values, safety, honesty, etc. Then by providing definitions it would allow for the understanding of how decisions are crafted. Another tool that could be used is the formation of a code of ethics for Toy Company that would also provide a clear framework for decision making from the line worker to the CEO. An excellent example of a code of ethics is the one produced and followed by the Coca-Cola Company (Coca-Cola, 2009). The document produced by Coca-Cola clearly outlines what the consumer should expect from the company and what the employee should expect from the leadership. Coke’s code provides clear examples of expected behaviors and provisions for if that behavioral threshold is not met. The components of the document are inclusive of internal and external behavior and expectations as well as the global nature of the Coca-Cola Company. The document poses simple questions that are intended to provide a framework for decision making, those question are ‘Is it Consistent with the code’, ‘Is it ethical?’, ‘Is it legal?’, “Will if reflect well on me and the Company?’ and ‘Would I want to read about it in the newspaper?’(Coca-Cola, 2009). Another area that Toy Company needs to include in the Code of Ethics is the “Integrity When Dealing with Others” section that Coke includes (Coca-Cola 2009). This section of Coke’s code provides a framework for the expectations of the corporation when dealing with anyone, internally or externally. Toy Company needs to include this section to provide the basis for interactions with the customer and to ensure that unfair practices are not tolerated within the company. The Coke code covers all aspects of the company for it, from the dealing with governmental bodies to the general fiscal reporting. Coke identifies an ethics officer for each of its locations, that person is to act as the point of contact for all questions of ethics compliance. Having a dedicated individual who is charged with the task of ethics compliance ensures that all persons know where to direct questions or concerns as they arise, The Toy Company would have had the testing division contact the ethics officer who would have been able to reference the Toy Company code of ethics and that would have provided the employees with the ability to devise appropriate suggestions prior to talking with management, being proactive will always save management time and effort when dealing with issues. Additionally, since Coca-Cola is a global brand it is outlined that the ethics of the company apply to operations globally. This is the sort of information that would be useful to the Toy Company and would have helped to manage the questions involving the whistle. None of the questions are difficult and clearly give direction. The code goes on to say that employees need to seek guidance when trying to resolve issues (Coca-Cola, 2009). This section of the code also explains the protections that employees should expect for being a “whistle blower”, this not only complies with the federal law but with the general philosophy of the company (Coca-Cola, 2009). This is an excellent policy to include empowering the employee to act as consumer advocate; this could have been the action of a Toy Company employee if the company acted in a way to threaten the safety of the consumer. If Toy Company were to create and live by a code as well developed as the one at Coca-Cola situations, like the whistle, would not require multi-level responses. Toy Company also needs to examine and include the conflict of interest policy. Coca-Cola has an excellent example to work from addressing this issue. This comprehensive look at conflict of interest goes into great detail as to what a Coca-Cola employee can and cannot do in a variety of situations. For example it addresses the selection of a supplier and how to determine if there is a conflict if your spouse works for that supplier (Coca-Cola, 2009). It is clear examples like this that Toy Company needs to provide in its own code to ensure that an ample amount of clarity is provided. Not only does an ethics code supply employees with guidance it is a great way to communicate to the consumer the company’s commitment to them thus creating positive public opinion of the company.

References

The Coca-Cola Company (2009) Code of Business Conduct, Acting with Integrity around the Globe, Retrieved from http://coca-colacompany.com

Myatt, M. (2012) 6 Tips for Making Better Decisions, Retrieved from http://www.frobes.com