Develop elaborate Standard installation and operation procedures (SIOP)
Right of revoking supply contract unilaterally in case of non-compliance to SIOP
Optimal good achieved
Case of the Sole Remaining Supplier
The case of 'sole remaining supplier' is regarding a firm that manufactures heart pacemakers. The pacemaker is a modern device that is used by the heart patients who have a medical problem of skipping heart beats. If regular heart beat (averagely after each 1.2 seconds) does not take place, the pacemaker stimulates the heart and it beats regularly. In its earliest years of invention, patients solely depended upon pacemaker whereas their own heart normal heartbeat was suspended. There were serious reservation in public, doctors, and the supplier company as to the ethical aspect of selling a 'medical device' that ran the risk of failing and depriving the patient of life. Since the installation of this device required extremely delicate handling, doctors were also least adept at installing pacemakers. Some specific stories about patients dying of issue related to the pacemaker also made the management of supplying company to immediately decide upon whether or not to continue supplying the product (Shanks, n.d.). Since there were several ethical dilemmas involved in both sides of decision, continuing or suspending the supply, all this gave rise to heightened tension within the board meeting as to what should be the most appropriate ethical stance of the company to follow.
There were several stakeholders involved in this case scenario. These belonged from both within and outside the case organization.
The internal stakeholders involved in this case were the Chief Executive Officer (CEO) board of directors (BOD), the engineering team of supplier organization, and the legal team responsible for handling the law suits. The biggest stake within the organization was that of the employees of this organization whose employees depended on organization's earning for their salaries. Thus, in case that a law suit was filed after failure of a pacemaker, the supplier company as a whole including its directors, employees, CEO, and engineering team, was to face the consequences.
The external stakeholders engaged in this case scenario were the buyer company to which supplier was delivering the pacemakers for sales, the patients that were being installed with the pacemakers, doctors performing the installation, and the shareholders of the company. In case of a negative consequence of installing the pacemaker, patients was the most effected stakeholder group as there was a threat of losing the life. Secondly, doctors were the most imminently threatened group of stakeholders under the threat of law suit from patient relatives. Shareholders of the company were to lose significant earnings in form loss of cash dividends and fall in the share price should there occur an incident of law suit on the supplier company. The buyer company was also directly under the threat of law suit and should the supplier suspend the delivery of pacemakers, the buyer company would have immediately run out business. On the other hand, in case of law suit also, the buyer company's business prospects would have become bleak.
Utilitarian ethics: Action plan
Utilitarian ethics are the basis of normative theories of ethics that guide business actions. According to the classical utilitarian theories, the action that promotes and ensures greatest good for greatest possible number of people can be termed as the 'ethical action' (Driver, 2009) that a firm may follow while conducting business operations.
According to the described position in the case, it is pertinent to mention few aims that Board of Directors should achieve while making the decision on whether or not to supply the pacemaker to the buyer company. The BOD should:
Ensure that such policies and practices are adopted that minimize the risk to patient life as patients are the most vulnerable stakeholder if and if not the pacemakers continue to be sold. If supply is suspended, there will be no device in the market that could cater to the needs of patients whose hearts skip 'heart beats'. On the other hand, not suspending the supply and continuing with same policies and practices of device development and sales will leave the company vulnerable to law suits, should there occur a loss of life. Therefore, development of policies and practices…