Answer: Ethics & Corporate Governance Case Study: Product X,Y & Z

Part A
1. Product Y not meeting specification
Product Y not meeting the specification is not acceptable. It has to be
tested to work as per its specifications if it has been put on the shelf. If
the product does not meet the specification, it cannot be put out on the
market to be sold in the first place. This is not ethical. If customers have
been suffering injuries and mishaps due to this, it is a serious issue.
2. Customer complaints not addressed
Customer complaints have not been addressed to the extent that Jay
Chemicals has been slammed with compensation claims. Customers
would have made an attempt to complain about the product and request
for an explanation or a replacement. Due to the negligence of the
company in addressing it, the dissatisfied customer has requested for a
compensation claim. This will cause the company not only a financial
liability, but also ruin its public status/image.
3. Non-executive directors
Non-executive directors are independent directors that are neutral and are
non-biased. They will be able to provide an independent review on the
scenario. However, they are also not aware of the situation and may have
various opinions as they come from various backgrounds. Therefore, it is
best to have a director that is well aware of the product within the team to
guide them through the scenario and explain consequences. This is to get
the team to be on the same path towards making the decision, rather than
having various different opinions that ends up not arriving to a conclusion.
4. Priority given to profit rather than performance
It is clear that Jay Chemicals is profit driven as despite complaints from
customers, the issue was not addressed as it was a cash cow (revenue
earner). Therefore, importance had been given more towards the profit
rather than the performance of Product Y being up to mark to its
specifications.
(Other points besides the above are accepted if relevant)

Part B
1) Address customer complaints
Customer complaints need to be taken very seriously. The moment a
complaint is received, it needs to be evaluated. Whether it is in an e-mail
form or telephone call, the customer service providers need to evaluate
the complaint thoroughly. Most importantly, the customer needs to be
notified immediately that the complaint had been received by the
customer service representatives and that it is being addressed. They
should also be notified on the number of days taken to revert. This way
the customer is aware of the progress made on their complaint would not
resort to any further action.
2) Product specification
Prior to launching a product, it needs to be properly tested and its
specifications must approved by governing rules and regulations. There
should not be severe problems arising from the product, such as
sustaining injuries etc. A product, regardless of its profitability should be
immediately removed from the shelf/called back if negative feedback of
this extent is received. It should only be reintroduced when the matter is
resolved.
3) Evaluation of Products X & Z
As Product Y has received some negative feedback from customers,
Products X and Z needs to be evaluated to avoid any forthcoming
problems, if any. Since there are some problems faced with Product Y, the
two other products face a risk of having problems as well. Therefore, it is
important to address this in advance.
4) Committee setting
Evaluation of such issues by independent directors is non-biased.
However, as mentioned in Part A above, it is important to have a director
who is aware of the specifications of Product Y and in depth details of it.
This to guide the independent directors on deciding the future of the
product.
5) Profitability
Product Y is a lucrative product. However, it is important for it to meet its
specifications in order for it to maintain its position in the market. Further
complications can lead to the product being removed altogether.
Therefore, profitability should be the secondary issue to look at compared
to the performance of the product itself. Therefore, Product Y needs to be
reassessed thoroughly before any further damage is done.