MODULE 11: Stakeholder Focus: Customers and Dangerous
Products
Core Module Issues:
• When, if ever, do companies have special obligations to their
customers?
• Are the obligations more pronounced if safety is involved?
Module Teaching Notes
This concluding unit in the stakeholder/shareholder unit focuses on customers. This is yet another group of
stakeholders without whom a company cannot operate.
But a shareholder model advocate might say: customers benefit by using and enjoying their purchases, and
companies benefit through increased profits. End of story. There is no obligation beyond that.
Stakeholder model advocates will often argue that taking care of customers is the right thing to do,
regardless of profits and losses. Particularly when safety is on the line.
I wrote this module in the days after the enormous Toyota “sticky accelerator” story dominated the
headlines. If a more recent recall is in the news, by all means focus your lecture on it instead – there is
nothing special about the Toyota example.
I find that, at the end of the unit, there is not a lot of new background information to add. And so, we have
produced another video [“Fan” in the South-Western Digital Video Library “Business Ethics” series] of
the scenario at the end of the module. To access the DVL, log in to your Cengage Faculty Account at
login.cengage.com, select “Digital Video Library Instant Access Code” when you add the Bredeson text to
your Bookshelf, and then click on the “Business Law Digital Video Library Online Access” link under
“Additional Resources”.
I would suggest running it in class. I’ll be glad to have it in mine.
After rolling the clip, off to the five questions.
When the questions are done, it might be worth five minutes to summarize the ideas presented in the unit.
You might also give a brief preview of or mention the next unit, which will feature ethical issues in selling,
marketing, and advertising.
Discussion Points for Scenario Questions
1. If you were in Mark’s position, would you recommend a recall today? Why or why not?
A. TODAY – WHAT IF YOU LOSE THE BIG CONTRACT?
B. LATER – WHAT IF SOMEONE IS KILLED? DOES THAT SEEM LIKE A
REMOTE RISK?
2. If you were in Mark’s position, would you recommend a recall in two months, after the
Rooms-To-Go deal has been completed?
A. YES – WOULD YOU FEAR A BACKLASH IF THE FULL STORY CAME
OUT?
3. Ann’s testing showed 6 percent “bad” results (sparks) and 4 percent “really bad” results (fire
and thrown metal). Would your answers to questions 1 and 2 change if Ann’s testing had shown
18 percent “bad” and 12 percent “really bad” results? What if it had shown the same number of
“bad” results but zero “really bad results”?
[ASK THESE QUESTIONS INDIVIDUALLY. TRY TO DRAW OUT HOW MUCH
RISK STUDENTS WOULD BE WILLING TO TAKE WITH OTHERS’ SAFETY.
ASK HOW THEY WOULD FEEL IF THEY HAD ONE OF THE FANS IN THEIR
OWN APARTMENT/HOUSE/DORM.]
For questions 4 and 5, assume that no recall is made. Assume further that a fan started a
fire and burned a home in your town to the ground, and that a local newspaper identified
the ceiling fan as the cause. The newspaper later reported that the Cooper Fan Company
knew about the potential problem and did nothing about it. Finally, assume that no one
was badly injured in the fire.
4. If you had read the newspaper article and later that year went shopping for ceiling fans,
would you consider Cooper fans, or would you pass them by even if they were competitive in
pricing, appearance, and features?
A. STILL CONSIDER – WHAT IF THERE HAD BEEN A FATALITY?
5. Assume that you are a juror in a lawsuit filed by the family with the burned down house. If
you were convinced that the Cooper Fan caused the fire and that Cooper knew about the
potential problems, would you award the family more than the value of its lost home and
possessions, if you had the chance? Would you award substantially more?
A. NO – REALLY? YOU MAY STAND ALONE IN AMERICA
B. MORE – HOW MUCH MORE?