The Adhesive Bandage Division of Black and Blue Products has discovered that the sterility of a large batch of product is potentially compromised. As a result of this discovery a report needs to be given to Senior Management regarding the incident and recommendations about how to deal with it. It is your responsibility to present this report and you know that you will have to communicate bad news to your Managers. You are concerned how an unprecedented quarterly loss will affect your career at the company and what to do about all of the compromised product. The issue is what is the ethical decision to make: protect yourself, the company, or the public as a result of this incident?
Central to the analysis of this case is Black and Blue’s reputation for high quality products. In fact, the company’s reputation was one of the reasons you took the position in the first place. Additionally, you know that your staff is highly capable and seasoned and that you can depend on their insights and judgments. They have identified five alternatives for how to deal with the potentially damaged product. The alternatives are:
1. Distribute the product as is.
2. Sell product to a retailer at reduced cost to hedge liability.
3. Distribute product to a developing country where quality might not be such an important factor.
4. Give the product to schools to be used as play or learning equipment.
5. Destroy the product and publicize Black and Blue’s commitment to quality.
In reviewing these five alternatives you need to consider how your recommendations will affect your career at Black and Blue, profitability for the quarter in the Adhesive Bandage Division, and the company’s public image.
There is no ethical or practical way to disguise the fact that a large batch of product has potentially been compromised. The reality is that regardless of your recommendations about how to deal with it, Senior Management will be aware that the incident took place under your authority and management. Additionally, your subordinate staff has rallied around you to provide alternatives, and your actions and decisions will likely affect your legitimacy of leadership. Choosing an option which minimizes your own accountability but places the company and public at greater risk would be seen as unethical and selfish by your staff. As Yukl states, “The trust of followers will be lost if they discover the leader has exploited or manipulated them in the pursuit of self-interest”(188).
Several of the alternatives recommend that Black and Blue distribute the damaged bandages in ways which could put the public at risk. A non-sterile bandage can cause more than just “a small skin infection.” In fact, any infection, no matter how small, has the potential to develop into a systemic infection which can be fatal. Distributing to a third-party retailer would not necessarily protect Black and Blue’s reputation if a serious incident took place. The retailer, under pressure from investigators or media, would likely point the finger back at Black and Blue.
Similarly, distributing the product to a third-world country does not necessarily eliminate Black and Blue’s liability for a defective product. Business operates in a global environment now, and any incident regarding the defective bandages has the potential to become a major news story or lawsuit. A decision to distribute the bandages without disclaimers of the defect, under any circumstances, puts Black and Blue at risk for litigation and damaged reputation. You also have to consider how it will look to your subordinates and Senior Management if you recommend a major healthcare products company ignore something as crucial as bandage sterility. They may interpret such a suggestion as an indication you do not have faith in or an understanding of the products you are in charge of producing.
Given the above discussion, alternatives 1, 2, and 3 are definitely not options. When writing your report to Senior Management be as straightforward and as accountable for the incident as possible. Try to find out what malfunction in the manufacturing process occurred to cause the damage in the first place and include in your report steps which you will implement to ensure this type of malfunction does not occur in the future. This will represent accountability, commitment and a proactive approach to preserving Black and Blue’s reputation for quality products and future profitability to both Management and staff. Both will appreciate your determination to avoid this situation in the future.
The report also needs to address the consequences of the manufacturing error and how it will affect the corporate bottom line. The first issue is what to do with the defective product. You should recommend that the bandages be distributed to schools or other organizations involved in training healthcare practitioners. A disclaimer regarding the compromised sterility of the bandages must be issued with the distribution to protect both Black and Blue and the public. Any product not distributed in this manner should be destroyed. In your report, suggest that the public relations department “leak” a story about the donation, and have them fully explain why the donation was made. Then Black and Blue can issue a public statement reiterating the company’s commitment to quality healthcare products and perhaps even it’s support in training quality healthcare professionals in the future. The resulting spin could produce enough public goodwill to offset any negative reactions from shareholders over the quarterly loss.
By making the above recommendations to Senior Management you provide several examples for positive moral leadership. First, you show responsibility and truthfulness by reporting the incident and aggressively pursuing the cause of the incident. Second, you exhibit compassion and respect for life by seeking to protect the public from the potential dangers of non-sterile bandages. And last, you show fairness and unity to the organization by considering all of the alternatives and recommending the ones which you feel have the most positive outcome for everyone involved.