Transcript Consumer Stakeholders: Product and Service Issues

Chapter 13 • Consumer Stakeholders: Product and Service Issues
Consumer Stakeholders: Product
and Service Issues
Search the Web
The American Society for Quality provides a
web site with an aray of information on quality
topics: www.asq.org
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-11
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Chapter Thirteen Objectives
• Define quality and product safety issues
• Explain the role of the Consumer Product Safety
Commission and the Food and Drug
Administration
• Consider the concern about product liability, as
well as strict liability, absolute liability, and market
share liability
• Outline business’s responses to consumer
stakeholders
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-22
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Chapter Thirteen Outline
•
•
•
•
Two Central Issues: Quality and Safety
Consumer Product Safety Commission
Food and Drug Administration
Business’s Response to Consumer
Stakeholders
• Summary
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-3
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Introduction to Chapter Thirteen
The chapter focuses on product quality and
safety, product liability and tort reform.
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-4
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Quality and Safety
Two Central Issues
The Issue of Quality
Driven by an increase in
family income and
intense global
competition
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
The Issue of Safety
Driven by the public’s
increasing concern with
safety and risk-free
products—and
business’s responsibility
to address this concern
13-5
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Quality Issues
Critical Dimensions of Product Quality
•
•
•
•
Performance
Features
Reliability
Conformance
•
•
•
•
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
Durability
Serviceability
Aesthetics
Perceived quality
13-6
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Quality Issues
Ethical Dimensions of Quality
• Contractual theory
• Due care theory
• Social costs view
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-7
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Safety Issues
Historical View
• Caveat Emptor
• Caveat Vendor
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-8
Top 10 List of Safety Principles
Build safety into product deign
Do product safety testing for all foreseeable safety hazards
Keep abreast of and implement latest developments in product
safety
Educate consumers about product safety
Track and address your products’ safety performance
Fully investigate product safety incidents
Report product safety defects promptly
If a defect occurs offer a comprehensive recall
Work wit the CPSC to make sure your recall is effective
Learn from mistakes – yours and others
13-9
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Product Liability
Reasons for the Growing Concern . .
.
FIRST . . . Product liability has
become a major issue because of the
sheer number of cases where products
resulted in injury, illness, or death and
the amount of the financial award.
SECOND . . . We have become an
increasingly litigious society.
THIRD…Rise in the strict liability doctrine
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-10
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Product Liability
Extensions of the Strict Liability
• Absolute liability
• Market share liability
– Delayed manifestation cases
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-11
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Product Liability
Other Issues
• Product tampering and extortion
• Product liability reform
– Tort law
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-12
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Consumer Product Safety
Commission
1. Protect the public against unreasonable
risks of injury associated with consumer
products.
2. Assist consumers in evaluating product
safety.
3. Develop uniform safety standards.
4. Promote research into preventing productrelated deaths, illnesses, and injuries.
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-13
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Consumer Product Safety
Commission
CPSC Risk Management
• Develop voluntary
standards with industry
• Issue and enforce
mandatory standards
• Ban a consumer
product if public
cannot be protected
• Recall a product or
arrange for its repair
• Research potential
product hazards
• Inform, educate and
respond to consumers
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-14
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Consumer Product Safety
Commission
Challenges Facing the CPSC
•
•
•
•
Lack of corporate compliance
Limited public access to key information
Inadequate consumer notification
Insufficient funding
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-15
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Food and Drug Administration
Some major responsibilities . . .
• Regulate the labeling of foods
• Develop safety standards for drugs
• Conduct product recalls
• Premarket test new drugs
• Regulate safety of medical devices (implants, etc.)
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-16
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Business’s Response to Consumers
Establishing
Consumer
Affairs Offices
Instituting
Total Quality
Management
Programs
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
Establishing
Product Safety
Offices
Undertaking
Costumer
Satisfaction
Measurement
13-17
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Business’s Response to Consumers
Consumer Affairs Offices (CAO)
• Basic mission is to heighten management’s
responsibilities to consumer stakeholders
• Essential functions
–
–
–
–
Establish a database
Audit programs
Recommend programs, policies and practices
Establish effective communications
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-18
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Business’s Response to Consumers
CAO Factors for Success or Failure
• Proximity to CEO’s office
• Clear access to all information about the company’s
customers and authority to create the information
• Availability of quantified information about consumers
• Accessibility to effective performance measures to
evaluate all employees in the company
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-19
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Business’s Response to Consumers
Product Safety Offices
Need for Greater Organization
1. Complexity of products
2. Subtlety of hazards generated during
product use
3. Coordination problems in large
organizations
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-20
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Business’s Response to Consumers
Levels at Which to Locate Product
Safety Offices
•
•
Divisional level
Corporate level
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-21
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Business’s Response to Consumers
Other Functions of Product Safety Offices
•
•
•
•
•
•
•
•
Set the tone for the product safety effort
Structure and enforce penalties
Develop links to other quality and safety initiatives
Assist with product safety litigation
Assist the regulatory liaison
Set up product safety committees
Perform safety audits and tests
Design contingency plans for product recalls
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-22
Total Quality Management
13-23
Total Quality Management
13-24
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Total Quality Management
Sigma Six Version of TQM
TQM on steroids
– 3.4 defects per million versus sigma four
6,000 defects per million
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-25
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Total Quality Management
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
13-26
Chapter 13 • Consumer Stakeholders: Product and Service Issues
Selected Key Terms
• Absolute liability
• Consumer Product
Safety Commission
(CPSC)
• Contractual theory
• Delayed manifestation
cases
• Due care theory
• Food and Drug
Administration (FDA)
•
•
•
•
•
•
•
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
Market share liability
Product liability reform
Six sigma
Social costs
Strict liability
Tort reform
Total quality management
(TQM)
13-27