Ch 14, Instructor’s Manual, Business & Society, Carroll 10e
Chapter 14
Consumer Stakeholders: Product and Service Issues
LEARNING OUTCOMES
After studying this chapter, you should be able to:
1. Describe and discuss the two major product/service issues-quality and safety.
2. Explain the role and functions of the Consumer Product Safety Commission (CPSC).
TEACHING SUGGESTIONS
INTRODUCTION – In this chapter, the authors discuss two central issues in the business/
consumer relationship—product quality and safety. Within the topic of safety, product liability
and calls for tort reform are explored. Two government agencies that play important roles in
product safety and quality are described, and finally, businesses’ responses to the consumer
stakeholder issues introduced in Chapters 13 and 14 are reviewed.
KEY TALKING POINTS – For many people, the most important elements of business ethics
and corporate social responsibility are the products and services provided. Products hold a
central position because these are (1) the items on which consumers spend their money and (2)
the primary interface between business and consumer. What businesses say about their products
Ch 14, Instructor’s Manual, Business & Society, Carroll 10e
Gioia doesn’t mention the connection, and why 60 Minutes chose not to discuss the similarities
between the Mustang and the Pinto is not clear, but it does seem suspicious.
Even though the Pinto case is dated, it provides a clear example of product safety issues. It
becomes an eye-opening experience for the students when, at the conclusion of the Pinto
discussion, the 60 Minutes video is shown and students are asked to explain why neither source
PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of:
Cases:
1-Wal-Mart- The Main Street Merchant of Doom
2-The Body Shop (A) – Pursuing Social and Environmental Change
16-Coke & Pepsi in India
20-DTCA – The Pill Pushing Debate
21-Big Pharma’s Marketing Tactics
22-A Smoke-Free Generation in Tasmania
23-McDonald’s Coffee Spill
24-The Betaseron Decision (A)
30-Targeting Consumers – (& Using Their Secrets)
34-Hidden Price of Fast Fashion
36-Two Vets, Two Dogs, and a Deadlock
39-To Take or Not to Take
Ethics in Practice Cases:
The Pirated Popcorn
Was “Pink Slime” a Victim of Social Media Frenzy?
Spotlight on Sustainability:
Ch 14, Instructor’s Manual, Business & Society, Carroll 10e
Power Point slides:
LECTURE OUTLINE
I. TWO CENTRAL ISSUES: QUALITY AND SAFETY
A. The Issue of Quality
2. Dimensions of Quality
3. Ethical Underpinnings
B. The Issue of Safety
1. Food Safety
3. Product Liability
a. Reasons for Concern About Product Liability
b. Doctrine of Strict Liability
c. Extensions of Strict Liability Rule
II. CONSUMER PRODUCT SAFETY COMMISSION
III. FOOD AND DRUG ADMINISTRATION
IV. BUSINESS’S RESPONSE TO CONSUMER STAKEHOLDERS
V. CUSTOMER SERVICE PROGRAMS
VI. TOTAL QUALITY MANAGEMENT PROGRAMS
VII. SIX SIGMA STRATEGY AND OTHER PROCESSES
VIII. SUMMARY
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
Students should recognize that their answers to these discussion questions should be well
reasoned and supported with evidence. Although some answers will be more correct than others,
students should be aware that simplistic answers to complex questions, problems, or issues such
as these will never be “good” answers.
1. Question: Identify the major dimensions of quality. Give an example of a product or
service in which each of these characteristics is important.
Ch 14, Instructor’s Manual, Business & Society, Carroll 10e
Answer: As the text notes, quality means different things to different people.
2. Question: What ethical theories can help us to better understand the issue of quality?
Discuss.
Answer: Three ethical theories shape our understanding of quality: (1) the contractual
theory, (2) the due-care theory, and (3) the social costs view. The contractual theory
3. Question: Identify the principal reasons why we have a product liability crisis. Have any
reasons been omitted? Discuss.
Answer: The main reason we have a product liability crisis in the United States is our
emphasis on litigation as the way to solve problems. If we have a problem we sue
4. Question: Differentiate the doctrine of strict liability from the doctrines of absolute
liability and market share liability. What implications do these views have for the business
community and for future products and services that might be offered?
Ch 14, Instructor’s Manual, Business & Society, Carroll 10e
Answer: The doctrine of strict liability holds that anyone in the value chain is liable for
harm caused to users if the product as sold was defective and unreasonably dangerous.
5. Question: Given the current business and consumer climate, what do you anticipate the
future to be for the CPSC and the FDA? What role does politics play in your answer?
Answer: Although business is, by far, the most powerful social institution in the United
6. Question: What is your assessment of business’s response to product and service quality
and safety? Have they done enough? What is missing from their approaches?
Answer: It seems that businesses have strived to improve the quality and safety of products
and services over the last decade. Corporate focus on these issues is driven by businesses’
Ch 14, Instructor’s Manual, Business & Society, Carroll 10e
GROUP ACTIVITIES
Group Activity 1 – Product Recalls
Divide students into groups of four to five students. Assign each group to research a recent
product recall. Students should determine why the product was recalled and whether the
company could have taken steps in the production process to avoid the recall. Students should
establish whether the firm in question embraces the contractual theory, the due-care theory or the
social costs view. Finally, each group should draft a sample press release for the company
addressing the recall and how the company intends to manage quality issues.
Group Activity 2 – Quality and Safety Movie Night
Invite groups of students to watch the movie “Supersize Me.” This movie focuses on the fast
food industry’s contribution to the growing obesity problem in the United States. Specifically,
the subject consumes only McDonald’s food for breakfast, lunch and supper for 30 days and
INDIVIDUAL ASSIGNMENT
Distribute the following instructions to each student:
Research how Toyota handled complaints that it received from 2008-2010 regarding runaway
acceleration problems. Specifically, note how the company dealt with the vehicle problem, those
directly impacted by acceleration issues, and its own shareholders and employees. Compare
Toyota’s response to Johnson & Johnson’s response to the Tylenol crisis. Based on this
comparison, evaluate Toyota’s response. What did the company do right? What should it have
done differently? How could a company that had been held out as an exemplar of product
quality produce over 8 million vehicles with safety issues?