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American ATVs Case Study

Case #1: American ATVs

Your U. S. company, American ATVs, has started producing all-terrain vehicles (ATVs) in Brazil for selling in the South American market. The company’s strategy is to build a presence and market share in Brazil before moving to other countries. In your first international assignment, the company has appointed you the manager of the Brazilian operation which consists of a manufacturing plant and a marketing department. Almost all of the employees,
including all of your marketing staff, is Brazilian.

After a year on the job, the manufacturing plant is running smoothly and sales are starting to grow. You are confident that this assignment will be a major career boost and, when you return to the U. S., you will receive a substantial promotion and salary raise.

Late one afternoon, Marcus Allen, your head of marketing, comes to your office. He tells you how happy he is to work for the company, but he is worried that sales growth is slowing and if that continues the company may abandon its Brazilian investment. He tells you, “The real problem is that prices are a bit too high for the Brazilian market.” He and the sales force had been discussing the problem and have come up with an idea to cut manufacturing costs that can lower the price to a more affordable level.

Allen suggest that you abandon the four-wheel version of the ATV and produce a three-wheel version like the company did in the 1980s. You can save money by not having an extra wheel and the associated suspension, and the ATV would probably be lighter and go faster—something your target market of younger men would like.

You remind Allen that the industry stop producing three-wheelers because they caused so many accidents and deaths. He counters stating, “It is perfectly legal here in Brazil to sell these vehicles. All we would need to do is put on a warning label and encourage people to wear helmets.” You know that wearing helmets is not very popular among your customers, but he presses: “We need this to survive and people need jobs.” As the manager of the Brazilian
operation, what should you do now? Analyze and format your analysis according to the case instructions.

Ethical Issues
1. The Ethical Responsibilities of Business Regarding Product Safety – Simply obeying regulations and laws does not exhaust the moral responsibilities of business in the area of consumer safety.

2. The Consumer Product Safety Commission (CPSC) was created in 1972 by the Consumer Product Safety Act (CPSA). Its job is to “protect the public against unreasonable risks associated with consumer products.”

3. These three principles of fairness, freedom, and well-being can be expressed in the fourpoint Bill of Rights for Consumers that President John F. Kennedy proclaimed in 1962 (a.k.a. consumerism). These rights are: (1) The right to be protected from harmful products (well-being).

4. Product Safety – The Legal Liability of Manufacturers – Strict Liability Stakeholders

1. Manager of the Brazilian Operation (Decision-Maker)
2. Marcus Allen
3. Company
4. Shareholders
5. Brazilian Consumers
6. Brazilian Employees


Case Instructions

Overall Instructions
1. When using material from the chapter, outline, and/or lectures, remember that you do not have to cite any material quoted from these sources in this course.

2. Each case is an INDIVIDUAL ASSIGNMENT, not a group assignment. I expect your answers to be your own thoughts and written in your own words! (See the discussion in your Syllabus regarding ECU’s Academic Integrity Policy.)

3. Save your file as a Word 2003 document (“.doc”), Word 2007 document (“.docx”), Word 2010 document (“.docx”), Word 2013 (“.docx”) or in “rtf” format. DO NOT USE MICROSOFT WORKS OR SAVE YOUR FILE IN ANY OTHER FORMAT. I WILL NOT BE ABLE TO ACCESS YOUR FILE AND THEREFORE WOULD HAVE TO

4. Save the file as “CaseX” and then your last name, first name initial, and middle initial. For example, my last name is obviously “Jones,” my first name initial is “C,” and my middle initial is “C.” Therefore, I would save my Case 1 file as “Case1ScottMD”; my Case 2 file as “Case2ScottMD”; and my Case 3 file as “Case3ScottMD.” If you do not have a middle name, enter your first name initial twice. If you have more than one middle name, use the
initial of your first middle name only. DO NOT LEAVE SPACES IN YOUR FILE NAME because it prevents me from properly archiving your file.

5. Type your answers according to the “Formatting Instructions” above. (Instructor’s Note: Failure to following the format when completing this assignment can cost you a significant number of points). Then, save your file according to instructions 3 – 4 above, PROOFREAD YOUR PAPER (grammatical errors in your paper can cost you significant
points), then submit it BEFORE the deadline as shown on your Blackboard Calendar.

6. Submit your file by clicking on the “Exercise/Case Assignments” Tab in the left-hand frame in Blackboard. Then click on the assignment titled “Case X” and scroll down until you see the words “Attach File” and the buttons to the right titled “Browse My Computer” and “Browse Course.” Click the “Browse My Computer” button and attach your file (DO NOT type your answer to this exercise in the “Submission” text box). When you see that your file has been properly attached, click the “Submit” button. (To access each case assignment you must have scored at least a 90% on Chapter 10’s Practice Quiz.)
Formatting Instructions

Step 1: Ethical Issue(s) (10 points)

1. Use one paragraph to tell me what your ethical issue is and why? If you have more than one ethical issue, write and explain each issue in a separate paragraph?

2. In the first sentence of your paragraph, simply tell me what the ethical problem/issue was in this case without explaining why?

3. In the next sentences of your paragraph, describe the ethical issue using information from your book, outlines, and/or lectures? Also state the chapter from your book that supports your answer? (Note: Ethical issues in the cases you do in this class will come from Chapters 5 – 10.)

4. In the next sentences of your paragraph, use facts from the case to support your answer?

5. In the final sentence of your paragraph, use a concluding sentence to wrap everything up?

6. CAUTION: Do not make any decisions at this time. You are simply identifying and explaining the ethical issue(s) facing you as the decision-maker at this point. In addition, do not discuss ethical issues facing others in the case—again, I am only concerned with whether you can identify the issues facing you as the decision-maker.

Step 2: Stakeholder Analysis (10 points)

1. Starting with the decision-maker (you), identify and list in sentence form ALL your stakes in the decision to be made. Stakes are what you hope to gain, fear losing, or want given the situation and the decision or decisions you must eventually make.


2. Identify the other key stakeholders as specifically as possible and then identify and list in sentence form NO MORE THAN TWO important stakes facing each key stakeholder. Key stakeholders are individuals or groups that are essential to solving the ethical issue(s) identified in Step 1 above. (Instructor’s Hint: They are usually, but not always, mentioned in the case so use that as a starting point.)

3. Explain each stake for each stakeholder in a separate sentence and make sure you use complete, grammatically correct sentences.

4. SEQUENTIALLY NUMBER YOUR STAKES (see the sample case and answers).

Step 3: Decision(s) and Analysis Decision(s) (10 points)

1. Determine what the most ethical decision or decisions are that resolve all of the ethical issues you identified in Step 1. List and describe each decision in a separate paragraph labeling them sequentially (e.g., Decision #1, Decision #2, etc.) as shown in the sample case and answers.

2. VERY IMPORTANT: Make sure you do not make alternate decisions. Alternate decisions are “either-or” decisions. For example, if I stated in the sample case that my Decision #1 was to lay off one-third of the sewers and my Decision #2 was to cut all sewers’ pay by one-third, these would be alternate decisions in this case. There is no way to
implement both decisions at the same time and, therefore, no way to analyze which decision is the most ethical.
3. After listing and describing all of your decisions, explain how they resolve all of the ethical issues you identified in Step 1 of the case.

Nonconsequentialist Analysis of Decisions (10 points)

1. Review all of the 26 SUBCHARACTERISTICS identified on the Six Pillars of Character Outline in Chapter 2 (i.e., ones with an “(S)” after them) asking yourself if any ONE of your decisions violates that subcharacteristic. If any one of your decision(s) violates a subcharacteristic, it is not an ethical decision using a nonconsequentialist analysis. For
example, if I decided to immediately layoff 1000 sewers in the sample case, that decision violates the WARN Act and violates the lawfulness subcharacteristic. That decision would not be an ethical decision and I would need to start over.

2. If none of your decision(s) violates one of the 26 subcharacteristics, then choose the STRONGEST FOUR subcharacteristics that you feel support your decision(s) as being the most ethical.

3. In a separate paragraph for each subcharacteristic:
A. First, type the name of the subcharacteristic with a “:” after it.
B. Second, copy and paste the EXACT definition of the subcharacteristic used in the Six Pillars of Character Outline.
C. Third, explain in detail how a specific decision or decisions uphold the subcharacteristic identified.

Consequentialist Analysis of Decisions (10 points)

1. BASED ON YOUR DECISIONS ABOVE, categorize every stake identified in Step 2 as either a cost, a benefit, or part cost and benefit. DO NOT RE-NUMBER YOUR STAKES.

2. Categorize any additional costs and benefits generated by your decisions.

3. Analyze your costs and benefits identified in #1 and #2 above. Do the benefits outweigh the costs? If so, your decision(s) are ethical using a consequentialist analysis. If not, your decision(s) are unethical using a consequentialist analysis and you need to start over.

4. If you believe the benefits outweigh the costs, argue why you believe so in no more than one