Business law

Fuego Phones International is a corporation that recently kicked off the sale of its new smartphone, the Rapid Fire 6. After three months of sales, the management team has received some troubling reports that the Rapid Fire 6 phones are unexpectedly catching on fire. The management team asks the accounting department to run some numbers to determine how much it would cost to recall the Rapid Fire 6 phones, to suspend manufacturing, and to conduct more tests to determine the phones safety.

After running some numbers, the accounting department states that it would be more cost-effective to leave the phones on the market shelves and propose settlement proceedings for anyone who was injured and initiates a lawsuit. In-house legal counsel agrees and states most consumers will not seek legal action against Fuego Phones Intl.

You are the CEO of Fuego Phones Intl. and must decide what to do. Remember, if you recall the Rapid Fire 6 phones, it will result in a delay of dividends paid to shareholders, loss of market share, and a loss in revenue, affecting shareholder profit.

For this discussion:

As the CEO, develop three questions you need to ask your management team to make this decision. Your questions can center around, shareholder profits, ethical reasoning, social responsibility, customer safety, etc.

ANSWER

Some of the questions that I will consider asking my team include; how to analyze ethical reasoning theory that will be operating in Fuego Phones International. How to identify pros and cons that will necessitate leaving of Rapid Fire 6 phones on shelve with intend of maximizing shareholders profits.  Which approach is to be used to recalling the Rapid Fire 6 phone as it owes a duty to the public, government and consumers in terms of social responsibility.

Supposed am the CEO of Fuego Phones Intel, my decision will be recalling the Rapid Fire 6 phones than leaving them on market because it’s a long term decision because it is reasonable and it will be beneficial to the company. It is considered that a business should have moral standards and behavior that favor both the consumer and the organization. it is useful to recall Rapid 6 phones on the market even if the process result in loss in revenue, loss in market shares and delay of shareholders dividends rather than allowing them to exist on the market because the organization is focusing on low profits. If the phones are left on the market shelves, the profit obtained will be divided as dividend to the shareholders.

The customers won’t be compensated especially for those who will not sake a legal action hence will give the company any opportunity of spending less.  If the company decides to recall the products on the market, it will in cur significant losses such as profits, loss market and revenue. I will consider recalling the phone on the market regardless of the losses that will be incurred and focus on making small profits. This will help in maximizing shareholders small profits rather than waiting for the company reputation to be ruined in the near future for selling imperfect products. The responsibility of the Fuego is to ensure that the government, consumers and the public at large are satisfied with our products. We will have to improve on our products to ensure that they don’t cause any harm to the consumers. Some of the strategies that Fuego Phone International can deploy to recall the phones on the market include; the company offering should consider offering a certain refund percentage to those returning the phones and ensure they communicate to the consumers in a transparent manner. This will help them to understand the incoming hazards and ways of mitigating it. This will show that will are socially responsible for the welfares of others by minimizing negative impacts for approximately three decades. For instance, product improvement will help Fuego Phone Intel to gain huge profits if they consider mitigating their hazards currently (Watson, 2020).

Reference

Naismith, A., Armijos, M. T., Escobar, E. A. B., Chigna, W., & Watson, I. M. (2020). Fireside tales: understanding experiences of previous eruptions and factors influencing the decision to evacuate from activity of Volcán de Fuego. Volcanica, 3(2), 205-226.