Ethics Lauren is faced with a choice between letting a substandard product go through, which would require her to lie, and reporting, it above her supervisors' heads, which would damage her relationship with those supervisors. As there is no outcome that does not result in harm, this represents a true ethical dilemma (McConnell, 2014). This is basically the prisoner's dilemma. Yet, there are some subtle differences between this and the prisoner's dilemma that allow this issue to be resolved.

The basic ethical issue here is that the company has a contractual obligation to its customer. Moreover, depending on the nature of the defect, passing this product could put human lives at risk. But more clearly, the two immediate supervisors are asking Lauren to commit fraud. Unlike in the Prisoner's dilemma, she hasn't yet committed a crime, so there is still time to avoid negative consequences entirely. Lauren has to file the report honestly, and let the chips fall where they may. If the supervisors pass along the product that she rejected, she has a duty of care to the shareholders to inform senior management.

Stakeholder Analysis

There are a number of different stakeholders in this scenario. Lauren, the two bosses, the senior management, and the client are all stakeholders, but so too are the customers who will end up using the product. They are perhaps the most at risk, depending on the nature of this defect. There are shareholders for both companies, regulators and employees for these companies, all of whom will be affected. The most important stakeholders, however, are the ones who are either directly affected or have the potential to be directly affected. That means Lauren, the client and the end users who might suffer injury from this defect. The two bosses are not as important as stakeholders go because the outcomes that they face are not the result of Lauren's choice, but their choices. If senior management comes down on them, then that is because they violated company policy. Senior management is on the next tier of stakeholder, just below. But...

Theoretically, Lauren owes a duty of care to the shareholders, but she is looking at the big picture here -- a major product defect that management covered up but that eventually kills someone is a lot more destructive that telling the engineers to raise their game, or seeing if the customer is okay with the current specs and test results.
Ethical Approaches

This scenario is a question of an illegal act -- fraud -- so in that sense it is merely a formality to examine the ethical approaches. Let's get real -- if Lauren is found to have committed fraud she could go to jail and be open for suit in civil court. The scenario was written to frame this as a dilemma in the sense that each choice Lauren makes will have some sort of negative outcome, but in the real world, it is not a dilemma normally to choose between breaking the law for one's own self-interest and not breaking the law.

The utilitarian perspective is fairly simple, as a result of the facts of the case. There is risk, if Lauren passes the product, to the end user, the client, and ultimately to the shareholders of her company and the other company, to say nothing of the she faces committing an illegal act. The trade-off is marginal at best -- Lauren gets to remain buddies with her bosses.. The utilitarian recognizes that there is almost no upside to this choice because both companies are likely to suffer, the minute somebody gets hurt from this product.

The rights approach holds that humanity must be treated as an end, not a mean. The risks that would be put upon the end users and the client are untenable under this philosophy (Velasquez et al., 2014). This is because to approve the product would be to put people at risk, simply as a means of increasing one's own profit, and that is entirely incompatible with the rights approach.

The justice approach seeks to resolve ethical dilemmas by treating people as equals when they are. In other words, this approach is about fairness. In theory, Lauren could rationalize that…