De La Salle University

Ramon V. del Rosario

College of Business

A Case Study 4: TO SHIP OR NOT TO SHIP

In Partial Fulfillment of the

Course Requirements for

CSRGOVE K31
2nd Term, AY 16-17

Submitted by:

Christine Alibutud
Bryan Borje
Charlene David
Andreu Lim
Genalyn Pura
Jonathan Tanlim

Submitted to:
Ms. Azenith Castillo

Submitted on:
March 1, 2017
 I. Determine the facts
● Rachel is the Quality Assurance Engineer of a large electronics company.
● Rachel and her team are responsible for deciding which new products will be
shipped.
● The company that makes the chips which are incorporated to the servers
Rachel’s company makes releases the products every 6 months.
● Rachel and her team have a limited amount of time to do the quality control tests
for every unit.
● The Quality and Assurance department is not going to be able to perform all the
tests because of time constraint.
● Rachel has to ship out a product that has a high likelihood of failure.

II. Identify ethical issues involved

● Legal measures are involved here, especially product liability since the company
is liable for the damage, injury or defect of the product that can harm the
customer.
● Employee morale, especially job consistency, is affected here, especially
because Rachel has neglected her duty as a Quality Assurance Engineer to do
the needed quality control tests for the product.
● Work ethics is involved in this, especially since reliability and correctness in work
can be questioned, especially regarding the shipping out of the product which
has a high likelihood of failure
● There is also a violation in the supposed “quality assurance” of the product
shipped, which the receiving customer assumes is of high quality, when in fact, it
isn’t
● Company integrity vs advantage over competitors comes into play, especially
since the quality control tests were put to expense in exchange for not being
behind the company’s competition.

III. Identify stakeholders

1. Rachel​ - She is a stakeholder because it is her job on the line. It is her duty to
make sure that the products that they release are of high quality. She is also
morally affected with whatever decision the company makes regarding with this
issue.
2. Electronics Company​ - The company’s name and reputation is on the line. If
suddenly, they release a new product in a rush and something goes wrong while
 it is already in the hands of hundreds of customers, the company will be blamed
for it.
3. Company’s Customers​ - The customers trust the Electronics Company with the
products they sell. If suddenly the server they buy has glitches, then they will not
be able to use its maximum potential for whatever reason they intend for it. Their
work will be delayed and may cause damages to them and their companies.
4. Quality Assurance Team ​- It is in their hands, as well as Rachel’s, that the
quality of the servers are put into. It is their responsibility so if something goes
wrong, it is their jobs on the line and also their conscience.
5. Other employees​ - They are also stakeholders because their work also affects
the work of the Quality Assurance Team. If other employees work faster to build
the new product, then the Quality Assurance Team will be able to test it earlier.
6. Supplier of chips​ - The supplier is a stakeholder because if the company merits
a bad name due to their unethical ways, then they could lose customers and do
cost cutting; meaning, they might look for other suppliers. And since customers
know that they are tied with the Electronics Company, their name and reputation
will also be tainted. Lastly, the production of servers are dependent on them
because without their chips the Electronics Company will not be able to produce
their products.
7. Families of all employees​ - There might be a possibility that because of the
release of products with defect that employees be laid off. This will affect the
families that they support.
8. Company’s Competitors​ - Since the company always pushes to release new
products every 6 months, then their competitors would do the same. If they
cannot ensure the quality of their products because of the time constraint, other
companies might also experience the same. Thus, the quality of all servers will
go down.

IV. Consider the available alternatives

Alternative 1:​ Rachel should suggest giving customers a warranty for the product. In
case the product fails. This can compensate for the limited timeframe Rachel gave for
quality assurance

ADVANTAGE DISADVANTAGE
 This can help compensate for the limited Since the product Rachel shipped has a
time frame for checking quality of the very high chance of failure it can lead to
product. high chance of return and fixing.

The warranty can give assurance to the It is hard to recover loss data. So giving a
customer that he/she can get help from warranty won’t necessarily help.
the company if there is a problem.

Alternative 2: ​Rachel should suggest a new work schedule for the servers to be
finished. It can go by batch, meaning if the first batch is finished then it will turned over
to the Quality Assurance Team but they will continue to produce the other batches.
Once the servers are given to the Quality Assurance Team earlier, then the team will be
able to run all the test to ensure its quality and be ready for its release in the market.

ADVANTAGE DISADVANTAGE

There will be enough time to run the Production of the first batch might be
Quality Control tests. rushed.

Products released to the market are New work schedule might not be
ensured of their quality. approved by the company.

Alternative 3: Do nothing. Rachel will just perform every possible test that are
suitable within the time period.

ADVANTAGE DISADVANTAGE

Rachel can still ship the product even Not all tests will be done.
though the time period is not enough.

There is a possibility that the server will

malfunction.

V. Consider how a decision affects stakeholders

Alternative 1:
 Utilitarianism Duties and Justice and Ethics of Care Implications
rights Fairness for personal
integrity and
character

POSITIVE NEGATIVE NEGATIVE NEGATIVE NEGATIVE

Choosing this It is Rachel’s duty This alternative will A warranty Overall, this
course of action to make sure that still ship low quality won’t help gives a negative
will benefit the customers have products and recover the implications to
customer and will quality products customers will suffer data lost and it the personal
benefit for Rachel and quality from the date they is still unethical integrity and
because she can should not suffer lost with the product. to sell customer character
fix the faulty from limited failed products.
products she timeframe.
shipped But it is
not beneficial for
the company.

Alternative 2:
Utilitarianism Duties and rights Justice and Ethics of Care Implications for
Fairness personal
integrity and
character

POSITIVE POSITIVE NEGATIVE POSITIVE POSITIVE

Choosing this It is Rachel’s duty There will be If this course of Overall, this gives
course of action to make sure that no action is taken, the a positive
will benefit all of the product is in consequences company and implications to
the stakeholders. perfect quality given to the Rachel shows the personal
Rachel and all before it is Electronics concern not only for integrity and
other employees introduced to the Company for their customers but character of
will keep their jobs market. With this their past also for their Rachel and the
while being able alternative, she unethical acts. employees and their Electronics
to serve the can fulfill that It is not fair to families. By making Company.
company and its duty. The just let the sure that products Although they are
customers well by company would company go for are fully functional paying for their
producing quality not have to resort selling faulty and are of quality previous
servers. to unethical acts servers to their shows care to your mistakes, they
just to compete in customers. customers. And will change for
the market. since customers are the better and
 satisfied, the ensure the quality
company will earn of their future
profit and their products.
employees will not
have to laid off.

Alternative 3:
Utilitarianism Duties and rights Justice and Ethics of Implications for
Fairness Care personal
integrity and
character

. ​POSITIVE POSITIVE NEGATIVE NEGATIVE ​NEGATIVE

Choosing this Choosing this Choosing this Choosing this Overall, This give
course of action. course of actions. course of action course of a negative
Rachel gets to work Rachel still does however is not right action is personal integrity
less and the her job as a quality and is unfair for the unethical and character.
company earns assurance customer because because Rachel neglected
more for giving engineer only on a their business can Rachel her duty as a
faulty products. The limited timeframe suffer from data shouldn't ship quality
customer will suffer and it is her right to loss. products that assurance
for buying faulty do nothing. she knows will engineer and
products. So the harm the should complain
benefits outweigh customers and about the limited
the consequences their business. timeframe the
for neglecting the company has
customers. given to her

VI. Make a decision

Decision Criteria Definition Weights Rationale

5 Ethical The most number 30% The frameworks are basis to

Frameworks of positive know whether or not the
outcomes outcomes is to be decision is ethical or not. If all
taken into account are positive, then we are sure
that the decision is completely
ethical.
Legal Measures of Legal measures
Product Liability include company &
constitution
legalities,
specifically product
liability
20% The chosen alternative should
rightfully comply with the
legalities of product liability,
especially because the
company will be held liable for
possible damages or injuries
the product will cause

Product & Process The product 20% The chosen alternative should
Assurance produced should produce a product that is
have all technical assured of high-quality
requirements
present

Customer The customers who 15% The chosen alternative should

Satisfaction bought the product yield the best results for
should be satisfied customer satisfaction
with the quality

Employee Morale & Job consistency is 10% The chosen alternative should
Company Integrity needed uplift employee morale and
strengthen company integrity

Optimization of Employee 5% The chosen alternative should

Employee performance is yield optimal results in
Performance essential to a regards to employee
company to performance
produce efficiency

Ratings
ACA 5 Ethical Legal Product & Customer Employee Morale Optimization Total
Frameworks Measures Process Satisfaction & Company of Employee
outcomes of Product Assurance (15%) Integrity Performance
(30%) Liability (20%) (10%) (5%)
(20%)

1 20 20 10 8 4 3 65

2 30 18 19 13 7 5 92

3 15 17 10 8 5 2 57
 Our decision is to choose the second alternative course of action. It is the
alternative that ranked highest, with a rating of 92%, based on our criteria. The chosen
alternative produces a product that is assured of high-quality, yields the best results for
customer satisfaction, uplifts employee morale and strengthen company integrity, yield
optimal results in regards to employee performance.

VII. Monitor and learn from outcomes

Action Plan
Steps Description

1. Rachel confronts Rachel discusses with her superior the ethical issue
her superior. regarding quality control of their servers.

2. Rachel proposes a Rachel proposes the new work schedule for the servers
solution. to be finished, so that there would be enough time for
quality control tests.

3. The superior There would enough time to run all of the quality control
implements the tests and the company would be providing ensured
suggested solution. quality products.