Product Harm Crisis Essay Examples

Abstract

Through the years, many corporations have had to deal with some magnitude of product harm crisis. No matter the size of the company, there is a code of ethics and responsibility that must be adhered to and followed at all departmental levels. If companies choose to ignore this ethical responsibility they run risk of having an ethical breach levied upon them. This paper will provide an in depth analysis of how GM failed to enforce product harm crisis practices within their ranks and suffered the consequences. I will also discuss recommendations on how an organizations social responsibility has an effect on their brand and customers loyalty.
General Motors has recalled 1.6 million vehicles due to a faulty ignition switch and, based on this fair act, the company is believed to have made the step towards a code of ethics and responsibility for its customers in the United States. After years of struggling with serious quality issues and technical problems, many product recalls were necessitated for the company to be able to compete on the market again. Credible research in the field suggests that General Motors ran a major “road to redemption” campaign with the sole aim of claiming that the company was “building the best cars and trucks in our history” (New York Times, 2004).
In order to discuss product harm crisis and how it impacts companies and corporations, we must first define exactly what a product harm crisis is. A product harm crisis is a well-publicized occurrence where products are found to be defective or unsafe. Today’s current business and regulatory environment provides a more stringent product safety legislation, and the increasing willingness of organizations to assume a voluntary product recall has made product harm crisis a frequent occurrence.
Product harm crisis may be contributed by several reasons; manufacturer’s negligence; product misuse or defective parts which many companies attempt to minimize or limit their liability to lessen the blow of a financial loss. In addition to proving a defect, many Consumer Reports provide information as to if the product failed to perform consistently with a consumer’s reasonable expectations, if a product’s had established unsafe conditions or possessed an unsafe design.
The company has successfully recalled 1.6 million vehicles due to a faulty ignition switch. GM sites this defect due to a heavy key ring or a “jarring event,” such as running off the road, could cause the ignition to slip out of position. The result of the faulty ignition switch has accounted for 13 fatalities. GM is further plagued with 303 deaths in GM vehicles due to uninflated airbags. Since no immediate comments from the company officials were made, mass media were speculating about the defective ignition switches and their direct impact on the safety of car drivers and passengers. However, the company’s official representative has revealed that the issue was discovered during testing for a completely new model, in the season of 2014. Only then, following the disastrous results, the dealers were officially required to stop selling the mid-sized cars in the States. In a totally separate case, GM has also been affected by a number of pickup trucks in the past year across the whole country. Moreover, this year, the company’s SUV’s are scrutinized for extra safety issues.
The unfortunate story about the company develops further, and, in total, GM was recalling 140,067 Chevrolet Malibu sedans in the United States, from 2014, for a potential faulty braking issue. This important notice was made, according to documents filed with the U.S. state regulators (Reuters, 2014). Perhaps the mid-sized cars are the exact stumbling stone for the General Motors Co. The National Highway Traffic Safety Administration has not been ignorant about the several cases involving GM and has put strict efforts in issuing orders to decrease the risk of a crash due to the faulty car models. Dealing with the product harm crisis, the primary concern is public safety, hence, customer safety. Moreover, the crisis has always a negative impact on the brand and its recognition by customers and dealer companies. Following the documentation for recalling of certain car models has made the consumers more experienced and wary of the company’s products. Whether those models will be negatively affected by the harm crisis, only the time will show. The product crisis during the current competition can also change the rules and, definitely, utmost attention will be given to the stages of product pre-testing and post-testing.

Recommendations

The normative stake of an environment alludes to sets of organizational expectations. The cognitive and normative foundations of the environment have an essential impact on embracing of organizational practices as they structure, thus limiting, the set of organizational alternatives and intended pressures. An else pretty alternative may be rejected, because it is not seen as suitable within a certain institutional context. Regulatory pressure, on the other hand, refers to the level that regulators have threatened to impede an organization’s operations. Customers impose pressure to the organization to deliver the best in quality and quantity.

References

NewYorkTimes. (2004). GM Rides Bumpy Road To Quality Redemption.
Reuters. (2014). GM Recalls 140,067 Malibu Cars In U.S. for Possible Faulty Brake Issue. Reuters. Retrieved from http://www.reuters.com/article/2014/05/15/us-gm-recall-malibu-idUSBREA4E0EF20140515
Sohn, Y. J., & Lariscy, R. W. (2014). Understanding Reputational Crisis: Definition, Properties, and Consequences. Journal of Public Relations Research, 26(1), 23-43.