Learning Goal: I’m working on a business law discussion question and need an explanation and answer to help me learn.
Fuego Phones International is a corporation that recently kicked off the sale of its new smartphone, the Rapid Fire 6. After three months of sales, the management team has received some troubling reports that the Rapid Fire 6 phones are unexpectedly catching on fire. The management team asks the accounting department to run some numbers to determine how much it would cost to recall the Rapid Fire 6 phones, to suspend manufacturing, and to conduct more tests to determine the phones safety.
After running some numbers, the accounting department states that it would be more cost-effective to leave the phones on the market shelves and propose settlement proceedings for anyone who was injured and initiates a lawsuit. In-house legal counsel agrees and states most consumers will not seek legal action against Fuego Phones Intl.
You are the CEO of Fuego Phones Intl. and must decide what to do. Remember, if you recall the Rapid Fire 6 phones, it will result in a delay of dividends paid to shareholders, loss of market share, and a loss in revenue, affecting shareholder profit.
For this discussion:
As the CEO, develop three questions you need to ask your management team to make this decision. Your questions can center around, shareholder profits, ethical reasoning, social responsibility, customer safety, etc.
For your response post, you will be on the Management Team and need to respond to one of these questions.