BUSINESS & SOCIETY Ethics and Stakeholder Management Chapter 13 BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e CONSUMER STAKEHOLDERS: PRODUCT and SERVICE ISSUES Prepared by Deborah Baker Texas Christian University Chapter 13- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved

Chapter 13 Chapter 13 Outcomes Describe and discuss the two major product issues: quality and safety. Explain the role and functions of the Consumer Product Safety Commission and the Food and Drug Administration. Enumerate and discuss the reasons for concern about product liability and differentiate strict liability, absolute liability, and market share liability. Outline business’s responses to consumer stakeholders to include TQM programs and Six Sigma. Chapter 13- 2

Chapter 13 Outline Two Central Issues: Quality and Safety Consumer Product Safety Commission Food and Drug Administration Business’s Response to Consumer Stakeholders Summary Two Central Issues: Quality and Safety The Issue of Quality The Issue of Safety Consumer Product Safety Commission Food and Drug Administration Business’s Response to Consumer Stakeholders Consumer Affairs Offices Product Safety Offices Total Quality Management Programs Customer Satisfaction Measurement Summary Chapter 13-

Critical Dimensions of Product Quality Perceived Quality Aesthetics Serviceability Features Reliability Conformance Performance Durability Dimensions of Quality Chapter 13-

Top 10 List of Safety Principles Build safety into product design Do product safety testing for all foreseeable safety hazards Keep informed about and implement latest developments in product safety Educate consumers about product safety Track and address products’ safety performance Fully investigate product safety incidents Report safety defects promptly If a defect occurs, offer a comprehensive recall plan Work with the CPSC to make sure your recall is effective Learn from mistakes Chapter 13-

Consumer Product Safety Commission Develop voluntary safety standards Issue and enforce mandatory standards Ban consumer products if no feasible standard would protect the public Obtain the recall of products or arrange repair Conduct research on potential product hazards Inform and educate consumers through government, organizations, and respond to consumer inquiries Chapter 13-

Total Quality Management Chapter 13-

Selected Key Terms absolute liability Consumer Product Safety Commission (CPSC) contractual theory delayed manifestation cases due care theory Food and Drug Administration (FDA) market share liability product liability reform Six Sigma social costs view strict liability tort reform total quality management (TQM) Chapter 13-