❖ BUSINESS ETHICS ❖

❖ Product Liability Doctrines

Product liability doctrines are legal principles that determine the liability of
manufacturers, distributors, and sellers for injuries or damages caused by defective
products. These doctrines provide avenues for individuals to seek compensation
when they suffer harm due to a faulty product. Here's an explanation of four
important product liability doctrines:

Privity of Contract:
Historically, legal actions for defective products were limited to the parties who
had a direct contractual relationship with each other, known as privity of
contract.Privity of contract required that a legal relationship existed between the
injured party and the party responsible for the defect (usually the manufacturer or
seller). If there was no contractual relationship, it was challenging for the injured
party to bring a lawsuit.However, many jurisdictions have relaxed the privity
requirement, allowing injured parties who lack a direct contractual relationship to
pursue product liability claims.

Negligence:
Negligence is a common legal theory in product liability cases. It involves
proving that the manufacturer, distributor, or seller failed to exercise reasonable care
in designing, manufacturing, or selling a product, and that this failure resulted in
harm to the consumer.To establish negligence, the injured party typically needs to
demonstrate the existence of a duty of care, a breach of that duty, causation (the
breach caused the harm), and actual damages.

Strict Liability:
Strict liability is a legal doctrine that holds manufacturers and sellers
responsible for injuries caused by defective products, regardless of whether they
were negligent.Unlike negligence, strict liability does not require proving fault or
negligence on the part of the manufacturer or seller. Instead, the focus is on the
defect itself and the harm it caused.Strict liability is often easier for plaintiffs to
establish because they don't need to prove that the defendant was negligent; they
only need to show that the product was defective and that the defect caused harm.

Absolute Liability:
Absolute liability is a concept that holds a party strictly liable for harm
caused by an ultra-hazardous or abnormally dangerous activity or product, regardless
of fault or negligence.This doctrine is less common and is typically applied in
situations involving inherently dangerous products or activities where the risks are so
high that the responsible party is held strictly liable for any resulting harm.The
concept of absolute liability is often associated with certain hazardous substances,
explosives, or activities that pose a significant risk to public safety.

❖ E-commerce and Product Liability:

E-commerce and product liability are interconnected in the context of online
retail. Product liability refers to the legal responsibility of manufacturers,
distributors, and sellers for any injuries or damages caused by their products to
consumers. In the realm of e-commerce, where transactions occur online, several
factors come into play concerning product liability.

Here are some key considerations:

Manufacturer and Seller Responsibility:In traditional retail, manufacturers and
sellers are held responsible for defective products. In e-commerce, the same
principles apply. Online platforms, as well as individual sellers, may be held liable for
faulty or unsafe products they sell.

Supply Chain Challenges:

E-commerce often involves a complex supply chain with
various parties involved in the production and distribution of goods. Identifying the
responsible party in case of a defective product can be more challenging in the online
environment.
Third-Party Sellers:Many e-commerce platforms allow third-party sellers to
operate on their platforms. In such cases, questions of liability may arise. The
platform itself may not manufacture Online retailers must provide accurate and
sufficient information about the products they sell. Clear and conspicuous product
descriptions, warnings, and disclaimers can help mitigate liability issues. Failing to
provide accurate information may result in legal consequences.

Consumer Reviews and Ratings:User-generated content, such as reviews and

ratings, can impact the perception of a product. E-commerce platforms need to have
systems in place to monitor and address concerns raised by consumers. Ignoring or
not acting upon valid complaints could increase liability.

International Jurisdiction:E-commerce operates on a global scale, and

products may be sold and shipped across borders. This can complicate matters when
it comes to determining the jurisdiction and applicable laws in case of a product
liability issue.

Product Recalls :In the event of a product recall, e-commerce platforms need
efficient mechanisms to communicate with affected customers. The challenge lies in
reaching customers who may have purchased the product from various locations and
may not be easily identifiable.

Insurance and Risk Management:E-commerce businesses should have

appropriate insurance coverage and risk management strategies to handle potential
product liability claims. This involves understanding the risks associated with the
types of products being sold and the potential impact on consumers.

Compliance with Regulations:E-commerce businesses must stay abreast of

product safety regulations and compliance standards in the regions where they
operate. Failure to adhere to these regulations can result in legal consequences.

❖ Leadership Style:
Leadership styles can significantly impact the work environment, team dynamics,
and overall organizational culture. Here's a brief overview of each of the mentioned
leadership styles:

Manipulative Leadership:This style involves leaders who use manipulative tactics

to achieve their goals. They may use deceit, coercion, or other unethical means to
influence their team. While manipulative leaders may be effective in the short term,
this approach often damages trust and morale over time, leading to negative
longterm consequences.

Bureaucratic Leadership:Bureaucratic leaders adhere strictly to established

procedures, rules, and regulations. They prioritize consistency and follow established
protocols. While this style can provide stability and order, it may also hinder
innovation and adaptability, leading to a rigid organizational structure.

Professional Leadership:Professional leadership emphasizes competence,

expertise, and a focus on achieving results. Leaders with a professional style typically
prioritize the development of their skills and those of their team members. They
value professionalism, ethics, and high standards in their work.

Transformational Leadership: Transformational leaders inspire and motivate

their team to achieve more than expected. They focus on empowering and
developing their followers, encouraging innovation, and fostering a positive
organizational culture. Transformational leaders often create a vision for the future
and inspire their team to work towards shared goals.

❖ Seven Symptoms of the failure of Ethical Leadership:

The symptoms you've mentioned describe various aspects of ethical failures
within leadership. Here's a brief overview of each:
Ethical Blindness:
Description: Leaders suffering from ethical blindness are unable or unwilling to
recognize ethical issues or concerns within the organization. This may result from a
lack of awareness or a deliberate avoidance of ethical considerations.
Impact: Ethical blindness can lead to a failure to address and rectify ethical lapses,
potentially causing harm to the organization's reputation and integrity.

Ethical Muteness:
Description: Ethical muteness occurs when leaders avoid discussing or addressing
ethical concerns openly. They may remain silent on ethical matters, failing to
provide guidance or set expectations regarding ethical behavior.
Impact: This silence can create an environment where unethical behavior goes
unchallenged, contributing to a culture that may tolerate or even encourage
ethical lapses.

Ethical Incoherence:
Description: Ethical incoherence refers to a lack of consistency or alignment
between a leader's stated ethical values and their actions. Leaders may espouse
ethical principles but fail to integrate them into their decision-making and
behavior.
Impact: Incoherent leadership erodes trust among followers, as there is a
disconnect between what leaders say and what they do. This can lead to
confusion and skepticism regarding the organization's ethical stance.

Ethical Paralysis:

Description: Ethical paralysis occurs when leaders are unable to make ethical
decisions or take decisive action in the face of ethical dilemmas. This may result
from fear of repercussions, indecision, or a lack of moral courage. Impact:
Ethical paralysis can lead to a failure to address ethical challenges promptly,
allowing problems to escalate and potentially causing significant harm to the
organization.

Ethical Hypocrisy:

Descrition: Ethical hypocrisy involves leaders who publicly advocate for high
ethical standards but privately engage in unethical behavior. It is a form of
inconsistency where leaders do not practice what they preach.
Impact: Ethical hypocrisy undermines the credibility of leaders and erodes trust. It
can lead to cynicism among employees, as they perceive a gap between the
stated values and the actual conduct of leadership.

Ethical Schizophrenia:

Description: Ethical schizophrenia refers to a situation where leaders exhibit

conflicting ethical behaviors in different aspects of their roles or responsibilities.
This inconsistency may result from compartmentalizing ethical considerations.
Impact: Ethical schizophrenia can create confusion and instability within the
organization, as employees may struggle to reconcile the contradictory ethical
behaviors of their leaders.

Ethical Complacency:

Description: Ethical complacency occurs when leaders become indifferent or

apathetic towards ethical issues. They may underestimate the importance of
ethical considerations or assume that existing ethical frameworks are sufficient.
Impact: Ethical complacency can lead to a lax ethical culture, where leaders and
employees may not proactively address emerging ethical challenges. This
increases the risk of ethical lapses going unnoticed or unaddressed.