Would you leave the product on the shelves

Assignment Help Business Law and Ethics

Reference no: EM13790246

Case: Phishy Pharmaceuticals is a corporation that recently kicked off the sale of its new weight-loss pill, Lose It Fast. After three months of sales, the management team has received some troubling reports of some unanticipated side effects caused by the pill. The management team asks the accounting department to run some numbers to determine how much it would cost to recall Lose It Fast, to suspend manufacturing, and to conduct more tests to determine the pill's safety and other possible side effects.

After running some numbers, the accounting department states that it would be more cost-effective to leave the product on the market shelves and propose settlement proceedings with anyone who is injured and initiates a lawsuit.

The corporate attorney has advised that the product states on the package that the pill is not FDA approved, and off-the-record has stated that everyone who buys a weight-loss product knows there are some risks involved, so it is likely that the majority of injured consumers will not initiate a lawsuit.

If you recall the product, it will result in a delay of dividends paid to shareholders and a loss in revenue, affecting shareholder profit. Consider the following questions regarding this example:

What would you do, and why?
Would you leave the product on the shelves because you feel your duty as a corporate manager is to maximize shareholder profits?
Would you recall the product because you feel the corporation owes a duty to the public, consumers, and the government in terms of social responsibility?

Reference no: EM13790246

Questions Cloud

Defines psychological disorders and abnormal behavior : Defines psychological disorders and abnormal behavior

Medicare and a never-event involving a patient transfer case : Conduct research to learn more about pressure ulcers. What causes them and what kind of care is required to treat them?

Compute the weighted average cost of capital : Compute the weighted average cost of capital

Constant growth model-compute cost of this common equity : A corporation expects to pay dividends (D1) of $1.40 per share at the end of the current year and the current price of its common stock is $50 per share. The expected growth rate is 5% and floatation costs of $1.00 per share are anticipated. Making u..

Would you leave the product on the shelves : Would you leave the product on the shelves because you feel your duty as a corporate manager is to maximize shareholder profits

What is the after tax cost of this debt : A $1,000 par value bond has 7 years to maturity. The bond pays $60 a year in interest and is selling for $900. Given a 30% tax bracket, what is the after tax cost of this debt?

Definition of what corporate social responsibility means : Definition of what corporate social responsibility means to you, Arguments supporting social responsibility andDescription of a real-life example of a specific corporation acting in a socially responsible manner

Push-through and pull-through production methods : Distinguish between push-through and pull-through production methods. How does pull-through production meet the requirements of adjust-in-time operating environment?

The use of health information technology : How would it potentially decrease (or would it possibly increase) systems errors and/or errors related to human factors?

User Account

All Pages