BUSINESS ETHICS MGMT3006

Lecture 5: Product Safety

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 This Week:

• The first of our in-depth, applied topics for the unit:

product safety.

• Discussions will include taking some of the theory

introduced in the lecture materials and applying this to
the topic and cases

• Then we will consider some possible approaches to

product safety in the market.
 Learning Objectives:
In the Lecture

• Define capitalism
• Describe Milton Friedman’s stockholder theory
• Describe some of the ethical questions around
capitalism
• Evaluate the market, government, and social
responsibility approaches to safety
 Limits on Capitalism?
There are three main ways to put limits on what business
does when it comes to ethical questions in general. They are:

Government Market
Regulation Forces

Business
Ethics /
CSR
 Limits on Capitalism?
As we have just Some think
seen, Milton
Friedman’s Friedman sits
views actually here.
put him here.

Government Market
Regulation Forces

Business
Ethics /
CSR In later weeks, we
will see that the
Broad View will
result in less
government
regulation.
Recent Examples of Safety
Issues
 Example 1: Pet Food
Unlike countries such
as Singapore, Japan,
and the USA, in
Australia the pet food
industry is not
government regulated.

There are no
mandatory standards
to ensure pet food is
safe.

This has had serious

effects.

Source: https://www.choice.com.au/outdoor/pets/products/articles/veganpet-dry-dog-food-recall
“Rebecca and her partner Loan have
two rescue greyhounds, Bertie and
Joanie, who were happy, healthy dogs
a few months ago, but now need hours
of daily hands-on help.

Both were diagnosed with

megaesophagus late last year …

Since 2017, over 100 cases of

megaesophagus have been linked to
Advance Dermocare dry dog food,
manufactured by Mars Australia. In
eight of those cases, the dogs had to
be euthanised.”

Source: https://www.choice.com.au/outdoor/pets/products/articles/veganpet-dry-dog-food-recall
Applicable In This Case?
In place? Fit for purpose?

Government Market
Regulation Forces

Business
Ethics /
CSR
 Example 2: Aqua Dots

Even where government

regulation does exist,
often the law can only
come into effect after
harm is already done.
For example:

Source:
https://www.usatoday.com/story/news/nati
on/2015/06/09/toddler-poison-aqua-dots-
date-rape-drug-trial/28760309/
 Example 3: The Ford Pinto
Hoffman describes how in the
1970s the Ford car company
treated the known likelihood of
horrific car crash deaths on the
basis of cost comparisons,
deciding it would be cheaper to
allow for the cost of legal
payouts after those deaths than
to pay the $11 per car that
would have prevented them.
Applicable In This Case?
In this case, Ford lobbied to prevent increased safety
standards.

Government Market
Regulation Forces

Business
Ethics /
CSR
 New and Emerging Safety Issues
The cases above all focus on physical products
and physical harm.
But safety applies to online activity too, in areas
we might not traditionally think of as ‘safety’
related.
For Example:

Source:
https://www.hivesyste
ms.io/blog/are-your-
passwords-in-the-green
 Another Example – ‘Image
Based Abuse’ and Cyberbullying

Sources:
https://cyberbullying.org/revenge-porn-research-laws-help-victims

https://feministlegalstudies.wordpress.com/2019/08/02/1-in-5-australians-is-a-victim-of-image-
based-abuse-despite-new-laws-to-prevent-it/
 Another Example – ‘Image
Based Abuse’ and Cyberbullying
The law has been
very slow to
catch up with
these dangers.

Should
companies be
more proactive
to protect users?

Source:
https://www.esafety.go
v.au/key-issues/image-
based-abuse
 Are These ‘Safety’ Issues?
They certainly fit the definition:

Can you think of other examples of safety issues

that arise online?
The Normative Theories
 What Would the Normative
Theories Say?
• As we know from our discussion of the normative theories, they
will each likely have a different account of the ethics of these
cases.

• That will often be the case even if all three agree the decisions
were morally wrong.
What the Law Says
 Activity 2: What The Law Says
• In groups of 4 or 5, look up what the main product safety law says
in your country.
• Consider:
– What products does the law cover and not cover?
– What obligations to businesses have?
– What are the maximum penalties?
Duty of Care and Moral
Negligence
Duty of Care

Source: Clayton Utz

What is a ‘Duty of Care’?

Source: https://www.slatergordon.com.au/personal-injury/public-liability/what-is-duty-of-care
 What is Negligence?
• Failing to fulfil a duty of care can qualify as legal negligence but it
can be worse than that – for example recklessness.
• Recall: Grace and Cohen refer to us aiming for ‘moral
competence’. Ways we can fall short of this include:

– Moral blindness – that is, failing to recognise there is a moral issue at all
– Moral negligence – “failing to consider something that one should consider”.
They note this is analogous to legal negligence.
– Moral recklessness – this occurs when we recognise there is an issue but our
measures to deal with the issue are clearly insufficient – for example thinking
that a general safety warning about the dangers of car crashes would have
been sufficient in the Ford Pinto case.

Source: Grace and Cohen, pp 27-31

Which of these applies in the cases
for this week?

– Moral blindness ?
– Moral negligence ?
– Moral recklessness?
Which of these applies in the cases
for this week?
– Moral blindness ?
– Moral negligence ?
– Moral recklessness?
Which of these applies in the cases
for this week?
– Moral blindness ?
– Moral negligence ?
– Moral recklessness?
What would Friedman say about this duty of care
approach?
 Learning Objectives:

• Define capitalism
• Describe Milton Friedman’s stockholder theory
• Describe some of the ethical questions around
capitalism
• Evaluate the market, government, and social
responsibility approaches to safety
 Next Week:
– The Invisible Hand of the Market
– Advertising Ethics