MGM365-1501A-04: The Legal and Ethical Environment of Business
Task Type: Individual Project Deliverable Length: 850–1,100 words
There are many examples of how the actions of a company have negatively affected consumers. Product recalls, bans, and warning labels have helped to protect consumers and companies are focusing more today on social responsibility. Examine why has there been such a relatively high number of these incidences and what companies can do to protect consumers.
Assignment Guidelines: * What legal and ethical responsibilities do companies have to their customers? * Cite and discuss in detail two cases in which a company endangered customers because of the manufacture or design of their products. How did
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Ethical and legal responsibility All businesses within the United States have a legal responsibility to abide by all federal and state laws regarding product safety and unfair or deceptive business practices. A business has an ethical responsibility towards its customers by making a commitment to improve the lives of others, which is accomplished through the enactment of a corporate social responsibility policy. Businesses owe their customers safe and reliable products that are free from defects or that could cause injury when used. When businesses do not act in an ethical manner it can lead to legal consequences such as having their products recalled or being assessed a penalty for the infraction (Editorial Board, 2012). The legal responsibility a company owes its customer is different from an ethical responsibility. In an effort to protect, the public from unsafe consumer products Congress enacted the Consumer Product Safety Act in 1972 and created the Consumer Product Safety Commission (CPSC). Since the enactment of the Consumer Product Safety Act there has, been several revisions with the latest being in 2008 known as the Consumer Product Safety Improvement Act (CPSIA). The Consumer Product Safety Commission has the authority to recall products under its jurisdiction that fail to comply with current safety regulations and has the authority to assess penalties and fines to those businesses that manufacture or distribute those products