To: Meg Whitely

From: Ethical Management Staff

Date: April 12, 2021
Subject: Ethical Advisory Regarding LectroKitty

Product Safety Concerns

Here at Kanga Toy Company, child safety and satisfaction are our utmost priorities. Recent
concerns regarding our latest and most lucrative release, LectroKitty, have jeopardized what
Kanga stands for. As of now, 12 children have swallowed and thus choked on small accessory
pieces while several other children have unfortunately been shocked and burned by our design.
Four children total have been admitted into the hospital as a direct result of our toy’s usage.
Though these reported cases represent a small percentage of all LectroKitty customers, our
company will not tolerate anything less than perfection regarding the safety of our products. As a
leading producer of high-quality children’s toys, we must uphold our reputation.

Parents have reported their children’s injuries to the CPSC, Consumer Product Safety
Committee, who have since called to inquire about these allegations and our company’s safety
standards. Further safety-related accidents will not only result in a recall of LectroKitty and
possibly multiple lawsuits but will also be detrimental to the existence of our brand. While
Kanga must consider the financial repercussions of taking our product off the market to improve
its safety measures, our business needs to stay genuine to our own company’s mission - to
provide children with outstanding and safe toys.

Brand and Employee Impact

Before LectroyKitty’s release and during our company’s lull in revenue, our 230 valued
employees took salary cuts for two years. To maintain employee satisfaction and overall care,
Kanga made a profit-sharing promise during the latest contract signings. Since LectroKitty’s
sales, bringing in over $12 million of gross revenue, Kanga has upheld this promise to our
dedicated employees. Taking no action regarding LectroKitty’s safety claims as mentioned
above will negatively impact Kanga’s gross revenue, ability to pay our organization’s
employees, and maintain Kanga’s contractual promise. Though improving LectroKitty’s design,
an estimated three months of development, will also result in profit drops, we truly believe fixing
our product’s safety issues is the only way to proceed to ensure further designs do not have
similar problems. To counteract this impending loss, we have developed possible actions
described below.

Plan of Action
After considering ethical violations and financial repercussions, we have developed a suggested
plan of action to most benefit our customers' safety as well as Kanga’s reputation. Our four step
action plan is listed below.
  LectroKitty’s sales and production should stop effective immediately as of April 12,
2021.

 Kanga’s chief design engineer, Suzanne Ciao, and her team will analyze and fix the
product’s issues. Though a three-month halt in sales will impact Kanga’s overall revenue,
we believe the $12 million of gross revenue will be substantial to uphold our employee
contracts.

 If necessary, higher officials should sacrifice a portion of their salaries for the three-
month period to ensure employee satisfaction and fair treatment. Kanga must always
keep our consumers and employees in mind while making these difficult decisions.

 The three retailers who inquired about selling Kanga products should be notified about
our plan and LectroKitty’s delayed production to uphold a high standard of client
relationships and complete transparency.

We truly believe improving LectroKitty’s design and safety will ultimately lead to increased
sales in the impending future, allowing Kanga to increase our employees’ salaries even more
than before. As stated previously, Kanga’s promise to safety must take precedence within our
company. Though our plan is only a recommendation, we hope you put our plan into action for
the future of our company.

Thank you for your patience. Please contact us with any questions, concerns, or comments
regarding our plan of action.