(TCO I) Larry R. Smeltzer and Marianne Jennings wrote an article, "Why
an International Code of Business Ethics Would Be Good for Business,"
which was assigned to be read at the beginning of the course. As you
have worked throughout this session, you should have considered this
article and how it may or may not have impacted different situations in
the world economic/business/legal/political environments. The essay you
will write on the next question should show that you have read this
article and can apply the theories and thoughts from that article to the
scenario provided. Feel free to rely on the information you know about
the situations (if real) or analogize to one that is real, if you wish.
Include in your answer at least two specific concepts from the article,
and apply those concepts to your reasoning in your answer. You will be
graded on your knowledge of the article as well as the application of
ethical theories to international situations.
In 2014, General
Motors promoted a woman to President and Chief Executive Officer, and
almost immediately she announced the recall of over two million GM
vehicles going back as far as 2002 due to faulty ignition switches.
Perhaps most importantly, GM has recognized that the ignition switch
failure has led to 23 deaths. GM is currently settling these wrongful
death claims for an average of $1,000,000. Yes, that sounds like a lot
of money, but remember GM clears about $2 Billion in profits each year.
Based on the public statements of the new CEO, it is clear that GM was
aware of this problem for many years, but avoided the recall to protect
its global reputation as the world’s leading auto maker. As the crisis
has developed, the new CEO has taken center stage and been willing to
accept the blame. She has admitted the problem was ignored and
disbelieved as research was conducted.
For this question, think
about the facts of General Motors recognition and reputation, and the
impact of this recall on their worldwide sales. Due to the loss of lives
involved, and other serious injuries to those who were impacted by the
ignition malfunction, you must ask the question “Was it worth It?” Also,
think about the cost to stockholders, managers, employees, and other
Now think about Smeltzer and Jennings's
international code of ethics article. Would an international code of
ethics have impacted how this entire General Motors travesty played out
in the real world? Would GM have been somehow required to behave
differently, which would have protected so many stakeholders from
losses? Or, would nothing really have changed? Feel free to argue both
sides of this, and include in your answer at least two or three things
you would have derived from Smeltzer and Jennings's International Code
of Ethics and how that would or wouldn't have impacted the GM recall
crisis. Include everything you have learned this session about ethics in
the business world.