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Business Ethics

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Business Ethics ­MGT610
VU
LESSON 33
THE ETHICS OF CONSUMER PRODUCTION AND MARKETING
Gas Explosions on a construction site
Gas explosions are caused by an ignition source coming into contact with a gas leak.
Construction workers must always remain alert to the presence of gas leaks. Gas can be a silent
killer, filling an area with flammable toxins while going unnoticed by most people. When a
flame or other source of ignition is introduced to a gaseous environment, the resulting gas
explosion can be catastrophic.
In 1937, a natural gas leak was responsible for the New London School explosion in Texas.
This disaster killed three hundred students and teachers. Similar explosions occur regularly
throughout the world, although typically with a less dramatic loss of life.
Gas explosions are preventable throughout effective safety procedures and responsible
leadership. If you are a victim of a gas explosion, you deserve justice and compensation for
your suffering. Contact an attorney who will fight for what you are entitled to. Do not hesitate
to move forward with your life and speak with a lawyer today.
Multi-Country Per Capita Fatality Data for 2003
Last updated on January 20, 2005 (re USA and Republic of Ireland) and on January 29
(Jamaica)
Number of c
OECD Per Capita
d
Number of m
Population
a
b
Death Country
Deaths
in
(millions)
Deaths in 2004
Pos'n  Rate
2003
12 g
1
----
Brunei
0.37
3.29
2
----
Malta
16
0.4
4.00
3
----
F Y R Macedonia
118
2.1
5.62
3,508 ae
3,221ae
4
1
United Kingdom
60.3
5.81
5
2
Sweden
529
9.0
5.88
6
3
Norway
280
4.6
6.01
7
4
Netherlands
1,028
16.3
6.31
8,877 t
8
5
Japan
127.3
6.97
370/377 aa/ac
9
6
Finland
379
5.2
7.02
10=
7=
Switzerland
546
7.45
7.33
10=
7=
Iceland
22
0.3
7.33
12
Albania
264
3.5
7.54
13
Israel
482
6.2
7.77
Serbia
and
14
858
10.8
7.94
Montenegro
15
9
Denmark
432
5.4
8.00
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Business Ethics ­MGT610
VU
16
10
8.03  Germany
6,613
82.4
1,634 v
17
11
Australia
19.9
8.21
18
12
Ireland
337
4.0
8.43
336 k
19
Ireland -- Republic of
3.97
8.46
2,778 x
20
13
Canada
32.5
8.55
21
Azerbaijan
718
7.9
9.09
22
14
France
5,731
60.4
9.49
23
Moldova
425
4.4
9.66
24
Romania
2,235
22.4
9.98
25
>10
Bahrain
26
15
Austria
931
8.2
11.36
459 y
435 y
27
16
New Zealand
4.0
11.48
28
17
Luxembourg
53
0.46
11.52
s
s
29
18
11.7
Italy
58.0
30
19
Slovak Republic
653
5.4
12.09
31
20
Slovenia
242
2.0
12.10
32
Georgia
572
4.7
12.17
33
Estonia
164
1.3
12.62
34
Bulgaria
960
7.5
12.80
35
21
Portugal
1,356
10.5
12.91
3,966 f
36
22
Turkey
68.9
-----
37
23
Hungary
1,326
10.0
13.26
38
24
Spain
5,399
40.3
13.40
39
25
Czech Republic
1,447
10.2
14.19
r
r
40
26
14.5
Belgium
10.3
41
27
Poland
5,640
38.6
14.61
399 l
42
Jamaica
2.71
14.7
14.75
42,884 ag
290.8 j
42,636 af
43
28
U.S.A.
ag
u
u
44
29
14.9
Repub. of Korea
48.6
45
30
Greece
1,615
10.6
15.24
46
Croatia
701
4.5
15.58
47
Liechtenstein
5
0.03
16.67
48
Belarus
1,763
10.3
17.12
238,584 z
49
China
1298.8
18.37
50
Lithuania
709
3.6
19.69
51
Latvia
493
2.3
21.43
>34,000 q
52
Russian Federation
35,600
143.7
24.77
77
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Business Ethics ­MGT610
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ab
53
25.3
South Africa
12,353
44.3ab
6,286 h
6,223 p
54
Malaysia
23.5
26.75
117 n
Cyprus
0.78
649 o
Ghana
20.8
Multi-Country Data for 2004
See a 15-year history of per capita death rates for the (now) 30 member countries of the OECD,
including the USA. We also have a table showing the 2003 per capita data for all 50 American
states, here
DSA Comments
It must be remembered that there are three primary measures for comparing multi-national
crash and fatality data: the deaths per 100,000 population or per capita rate, as shown here,
deaths in relation to overall distance traveled (known in the USA as the VMT rate), and deaths
in relation to the number of registered motor vehicles in the country. All three measures should
be considered when comparing disparate countries but using just one of these methods is
generally acceptable when comparing countries of similar status (e.g. "highly motorized
countries" [HMCs], developed nations, third world countries, etc.).
As a result, some countries in the above table may appear to present bizarre results, either
because -- like China, for example -- they have a very high death toll but it is offset by a huge
population, or they simply have, say, a very low proportion of motor vehicles per head of
population -- such as Brunei, that is currently at the head of the per capita table, or Ghana.
There is also the question of how, exactly, a traffic fatality is defined in any particular country.
Some may only include deaths at the scene, whereas others will stipulate deaths within 24
hours, and some may allow a full week or even 30 days.
In some cases, therefore, the data for the number of deaths simply cannot be relied upon as
being accurate. In Turkey, for example, the national press state that over 9,000 people are killed
in road crashes each year, and yet each year data is published by that country giving a much
lower body count. For that reason we have elected to position Turkey in the table to allow for
an approximate per capita rate of 13.06 (based on the aforementioned 9,000 estimate) but have
not shown the rate in the relevant column.
The Ethics of Consumer Production and Marketing
As the examples of Bridgestone/Firestone and Metabolife International clearly demonstrate,
consumers are exposed daily to high levels of risk simply by using consumer products. The risk
translates into injury, death, and astonishingly high costs as a result. As if product injuries were
not enough, consumers must also bear the costs of deceptive sales practices, shoddy
merchandise, and un-honored warranties. This chapter examines the ethical issues raised by
product quality and advertising.
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Business Ethics ­MGT610
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Markets and Consumer Protection
Consumers are at great risk every day. Many believe that consumers are automatically
protected from injury by the operation of the free and competitive market. In the market
approach to consumer protection, consumer safety is seen as a good that is most efficiently
provided through the mechanism of the free market whereby sellers must respond to consumer
demands. If consumers want products to be safer, they will indicate this preference in markets
by willingly paying more for safer products and showing a preference for manufacturers of safe
products while turning down the goods of manufacturers of unsafe products. Producers will
have to respond to this demand by building more safety into their products or they risk losing
customers to competitors who cater to the preferences of consumers. Moreover, if consumers
do not place a high value on safety (or are unwilling to pay for it), then it is wrong to force
them to accept higher levels of safety through regulation.
Critics to the market approach respond that the benefits of free markets are obtained only when
the markets have all of the seven defining characteristics: (a) There are numerous buyers and
sellers, (b) everyone can freely enter and exit the market, (c) everyone has full and perfect
information, (d) all goods in the market are exactly similar, (e) there are no external costs, (f)
all buyers and sellers are rational utility maximizers, and (g) the market is unregulated. Critics
of the market approach to consumer issues argue that these characteristics are absent in
consumer markets.
Most importantly, markets are efficient only if participants have full and perfect information
about the goods they are buying. This is obviously not always the case, however; some
products are simply too complex for anyone but an expert to understand them. Gathering
information is also time consuming and expensive, so many consumers may not have the
resources to acquire the necessary information on their own.
In theory, of course, if consumers really wanted this information, then a market would be
created for consumer information. It is difficult, however, for such organizations to cover their
costs. Once costly information is released, it is easily leaked to others who do not pay. Because
people know they can become free riders, the number of people who pay for the information is
too small to cover the costs of gathering it. Second, consumers are unwilling to pay for
information because they do not know what its value is until after they get it, and then they
already have it and don't need to pay for it. When we buy information, we cannot know in
advance what we are purchasing until we have it. Markets alone, then, cannot provide
consumers with the information they need.
Another criticism of the free market approach to consumer issues refers to the sixth
characteristic of perfectly competitive free markets that of the consumer is a "rational utility
maximizer." The consumers defined by the theory think ahead, consider, and watch every
penny they spend, knowing how their choices will affect their preferences. This does not really
characterize consumer choice, however. Most consumer choices are based on probability
estimates that we make concerning the chances that the products we buy will function as we
expect. Research shows, unfortunately, that we become inept and irrational when we make such
choices.
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Business Ethics ­MGT610
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First, most of us are not good at estimating probabilities. We typically underestimate risks and
overestimate the probabilities of unlikely but memorable things. Our probability judgments go
astray for five reasons:
1. We ignore prior probabilities when we get new information, even if the new information is
irrelevant.
2. We emphasize "causation," but underweight evidence that is relevant but not seen as
"causal."
3. We generalize based on small sample findings.
4. We believe in the nonexistent "law of averages."
5. We believe that we control purely chance events.
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Table of Contents:
  1. INTRODUCTION:Business Issues
  2. INTRODUCTION (CONTD.)
  3. THEORY OF ETHICAL RELATIVISM
  4. MORAL DEVELOPMENTS AND MORAL REASONING
  5. MORAL REASONING:Arguments For and Against Business Ethics
  6. MORAL RESPONSIBILITY AND BLAME
  7. UTILITARIANISM:Utilitarianism: Weighing Social Costs and Benefits
  8. UTILITARIANISM (CONTD.):rule utilitarianism, Rights and Duties
  9. UNIVERSALIZABILITY & REVERSIBILITY:Justice and Fairness
  10. EGALITARIANS’ VIEW
  11. JOHN RAWLS' THEORY OF JUSTICE:The Ethics of Care
  12. THE ETHICS OF CARE:Integrating Utility, Rights, Justice, and Caring
  13. THE ETHICS OF CARE (CONTD.):Morality in International Contexts
  14. MORALITY IN INTERNATIONAL CONTEXTS:Free Markets and Rights: John Locke
  15. FREE MARKET & PLANNED ECONOMY:FREE TRADE THEORIES
  16. LAW OF NATURE:Theory of Absolute Advantage, Comparative Advantage
  17. FREE MARKETS AND UTILITY: ADAM SMITH:Free Trade and Utility: David Ricardo
  18. RICARDO & GLOBALIZATION:Ricardo’s Assumptions, Conclusion
  19. FREE MARKET ECONOMY:Mixed Economy, Bottom Line for Business
  20. COMPETITION AND THE MARKET:Perfect Competition
  21. PERFECT COMPETITION
  22. MONOPOLY COMPETITION:Oligopolistic Competition
  23. OLIGOPOLISTIC COMPETITION:Crowded and Mature Market
  24. OLIGOPOLIES AND PUBLIC POLICY:Ethic & Environment, Ozone depletion
  25. WORLDWATCH FIGURES:Population Year, Agriculture, Food and Land Use
  26. FORESTS AND BIODIVERSITY:The Ethics of Pollution Control
  27. THE ETHICS OF POLLUTION CONTROL:Toxic Chemicals in Teflon
  28. THE ETHICS OF POLLUTION CONTROL
  29. THE ETHICS OF POLLUTION CONTROL:Recommendations to Managers
  30. COST AND BENEFITS:Basis of social audit, Objectives of social audit
  31. COST AND BENEFITS:The Ethics of Conserving Depletable Resources
  32. COST AND BENEFITS:The Club of Rome
  33. THE ETHICS OF CONSUMER PRODUCTION AND MARKETING:DSA Comments
  34. THE ETHICS OF CONSUMER PRODUCTION AND MARKETING:Should Consumers Bear More Responsibility?
  35. THE CONTRACT VIEW OF BUSINESS' DUTIES TO CONSUMERS
  36. THE CONTRACT VIEW OF BUSINESS' DUTIES TO CONSUMERS:The Due Care Theory
  37. THE SOCIAL COSTS VIEW OF THE MANUFACTURER’S DUTIES
  38. ADVERTISING ETHICS:The Benefits of Advertising, The harm done by advertising
  39. ADVERTISING ETHICS:Basic Principles, Evidence, Remedies, Puffery
  40. ADVERTISING IN TODAY’S SOCIETY:Psychological tricks
  41. ADVERTISING IN TODAY’S SOCIETY:Criticism of Galbraith's Work
  42. ADVERTISING IN TODAY’S SOCIETY:Medal of Freedom
  43. ADVERTISING IN TODAY’S SOCIETY:GENERAL RULES, Substantiation
  44. ADVERTISING IN TODAY’S SOCIETY:Consumer Privacy, Accuracy
  45. THE ETHICS OF JOB DISCRIMINATION:Job Discrimination: Its Nature