In April 2009 Philips has made decide to recall Senseo coffee makers produced between July 2006 and November 2008. This recall was based upon a small number of reported incidents with Senseo coffee makers. Based upon analysis performed by Philips they concluded that in a very rare case, when all 3 safety mechanisms fail, the device could fail unsafely. The probability that this could occur was based upon the reported incidents less than three on a million. In April 2009 Philips was covered with a morally hard case. On one hand the costs of a recall will be enormous (analysis has shown that Philips took a provision of > 50 million euro) and on the other hand the change that people will be harmed by a explode coffee machine is so small, that it almost is negligible. In view of the fact that they want to come across as a brand which takes his responsibility and they put a risk on the strong brand reputation if they would not take any action, they decide to go for a preventive voluntary recall. Philips decide to recall the Senseo coffee machines and to repair them, so to eliminate the risk to the maximum of injuring people. Philips has clearly demonstrated that it cares a lot about their consumers next to the fact that it is also a moral commandment not harm other people. I think Philips has made the right choice to repair the coffee machines to prevent serious injuries. Thereby morality is more important than business. By making the right moral decision Philips economical seems rewarded. After all costumers have more trust in Philips, hence the market value of the brand name is increased.
Background article
7 comments:
I think it is clear Philips acted morally right in these. However,I doubt whether Philips had the intention to act morally right. I think a company like Philips made this decision purely on the discourse of business. The recalled these Senseo machines, but I doubt how many of these products actually have been retourned to the Philips factory. By making a simple calculating these costs will be lower than the costs and damage on brand name when a machine actually explode.
S888110
I also think Philips has made the right choice. Philips is a diversified Health and Well-being company, focused on improving people’s lives trough timely innovations and are world leading in healthcare. In terms of product responsibility, it is Philips special duty to prevent their consumers from injury or harm due to foreseeable causes. The market where Philips in operate is not in a natural sphere, this market need trust, with the action of Philips you create some trust by your consumers. For this reason it is Philips social discourse to help their consumers. Only on this way you can stay market leader in healthcare and other sectors, so they know as bests that you need to full fill the consumers needs to create any profit in the future. So Philips action is the only right action which can be made in this situation.
s550209
s477986
This case illustrates the close relationships between moral and business discourse that were discussed in the course. In order to maintain their brand name and reputation Philips is bound to act morally right. Even though, the recall of the coffee machines bring high costs to the company, the long-term benefit in engaging in ethically right behaviour will be advantageous for the company.
I do not agree with the author’s view that morality is more important than business for Philips. As stated in the comment, there was a chance of ‘less than three on a million’ that the device would fail. However the rumors that the devices could explode, could lead to reputation decrease which will lead to lower sales and thus less business. So yes, it is a morally good thing to replace all the devices but their incentive was to keep their good image which is directly linked to customers buying their goods because of their good reputation. Every company wants as much as possible profit and the longterm ‘damage’ that could come because of malfunctioning devices, was far greater than their 50 million euro recall operation.
ANR 137506
I agree with the author that the decision taken by Philips, to retrieve the Senseo coffee machines, was morally the right decision. If they would not have taken back the malfunctioning machines, they would have violated the moral principle not to hurt others. A comparable case is that of the Ford Pinto.
However, I do not agree with the author that morality is more important than business, both are important. Doing business results in several core (liberal) moral principles such as property and economic prosperity. These in turn may lead to happiness and self-determination.
The prescriptions of morality and business largely overlap, thus the business discourse incorporates morality. However, it should be stated that morality’s prescriptions demand priority over the business prescriptions. If a firm does not act according to moral prescriptions, it will negatively influence a firm’s profit. This in turn is not in accordance with the business discourse.
s926012
I also don't think that morality is more important than the business in the marekt. With the business discourse, smart company which wants to last long consider not only its short-term profit but also long-term profit. I don't think Philips acted 'out of duty'. Philips acted just 'in conformity with duty' regarding its long-term profit, for example reputation and good relationship with customer. Like the writer said, it is very rare case that company recalled in spite of its short-term profit. However, like students above said, if we consider the sort of goods Philips makes, in the long run, its decision is profitable so it is acting in conformity with duty.
I agree with 888110 and 240137. Philips does not exist to make other people feel good; eventually it exists because of the financials. Actually, it can be compared with the earlier posted Toyota-case on this web log. If the products were not sent back to the manufacturer and customers could possibly be hurt, reputation loss would damage the enterprise even more. Philips merely acted in accordance with morality; not because it is interested in morality per se.
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