Identification of ethical issues

It is time, at last, to discuss about the truth regarding an ethical issue in United States
towards the manufacturer of Tris-impregnated pajamas’ action in relation with
dumping in overseas. The sales of fire-retardant pyjamas went downhill due to the US
Consumer Product Safety Comission’s action to banned and remove millions pairs of
the product from the market, based on the allegation and proof that the product
contains flame-retardant chemical Tris that triggered kidney cancer in children, which
unables the product to be thrown away, let alone be sold to the market. Therefore,
there are millions pairs of banned products wasted on the warehouses. Exporters are
taking advantage of the situation by offering to buy the garments containing Tris in
large quantities with lower prices (10 to 30 percent of the normal price). The intention
of the exporter are to dump the toxinated products abroad.

Thus, the first ethical issue is the sales and production of the products, since the
manufacturers were aware of the chemicals being used to produce the pyjamas and
they are oblige to have known about its harmful effects. In addition, the
manufacturer’s decision to eliminate the wasted products by selling it to the exporters
even after the evaluation of the harmful and dangerous effects of the product itself
towards children has become the second ethical issue. Lastly, the exporters’ intention
on buying the pyjamas in a bulk was to dump the products abroad. This is an ethical
issue, due to the fact that dumping of products to developing or under-developed
countries has been banned even though its mainly practiced in the past. However, as
stated it is an ethical issue due to dumping goods that are banned for being hazardous
in the U.S to other countries.

Analysis on Dumping

The harmful and unsafe pyjamas were sold to exporters after they were restricted and
banned by the U.S Consumer Product Safety Commission at a high discount cost with
a clear goals and intention of dumping. Dumping of restricted and banned products
abroad to maintain a strategic distance from losses in sales revenues is illegal,
exploitative and unethical in many countries. These circumstances can be justified by
the principle of capitalism and broke down by the ethical hypotheses and moral
theories to assess its effect.

Principles of Capitalism

Capitalism mostly called as a free enterprise is a “financial and economic concept

where most distribution and production is controlled by private firms with the
principle of gaining profit.” (Shaw, 2009) According to the theory, it considered the
dumping action taken by the manufacturer of Tris-impregnated pyjamas as a fair and
appropriate decision since it will support and protect the profitability of the company.
In addition, there are four key features stated as “the nature of capitalism; Companies,
Profit Motive, Competition and Private Property” (Shaw, 2013)
Application of Principles of Capitalism

The nature of capitalism further explains the rationale behind the decision made by
the manufacturer to the extent of ethical issues and understanding. It begins with an
explanation of capitalism as a company which states that company is a separate legal
entity which concludes that the company’s own interest are dealt seperately from the
individuals directly associated with it. Therefore, decisions are made by mainly
prioritizing what is best and most beneficial for the company ahead of the the
stakeholders. In relation with the ethical issue faced by the manufacturer of Tris-
impregnated pyjamas, the principle supports the action because it is for the
manufacturer’s best interest to sell it’s remaining products to gain financial power
rather than facing a loss. The second key feature is profit motive which justifies the
reason behind the sales of the intoxicated pyjamas, the feature creates an assumption
that the economic interest motivates individuals, therefore profit is the main
objectives and motives for the company for its existence. The profit motive then
analyze the Tris-pyjamas’ action as a natural human behaviour of looking for ways in
gaining profit despite it was being hazardous due to their main motivation which was
to gain profit and that they are financially motivated for their own economic interest.
The next key feature is competition, further clarifies that competition changes the
company's own economic interest into becoming socially beneficial. It bolsters the
sale of the pyjamas to the exporters who have an intention to dump by assessing its
social advantages to the targeted countries. For example, in developing countries such
as Indonesia, Myanmar and Laos the price of fire safety pyjamas are quite high.
However, the dumping of Tris-impregnated pyjamas into these countries would help
to decrease the local market price by setting a low price competition that essentially
will benefit the country itself. The last important principle of capitalism is Private
property, which suggest that the capital injected in the company are for the sole-
purpose of creating money, all the distribution and production decisions are made
under the motivation of maximizing profit. Thus, explains that the action of selling
the remaining pyjamas to the exporter was a measured action that was utilized to
benefit the manufacturer by still being able to generate income from the pyjamas
despite the current ethical issues faced.
Application of Moral Theories

The following section discusses the application of moral theories towards the ethical
issues in the case study. The moral theories included are; Friedman’s CSR theory,
Egoism, Kant’s and The Due-Care theory.

According to Milton Friednman’s corporate social responsibility theory which stated

that “there is one and only one social responsibility of business that is to use it
resources and engage in activities designed to increase its profits” (Friedman, 1970).
He encourage companies in engaging in activities that relates to company’s
profitability rather than charity to the societies that will consume more capital. He
also states that “a good corporation is the one that undertakes activities that are
ethically sound but economically viable” (Friedman, 1970). Thus, with the theory in
mind, The manufacturer’s action to sell away the remaining pyjamas for dumping will
boost the economic benefit. In contrast, if the manufacturer were to dispose the
remaining unsold pyjamas, Friedman’s theory would state that its morally not right
because the actions are based on social benefit that have given a big risk towards the
company’s economic benefit. Friedman suggests that it is wrong to prioritize social
benefit rather than economic benefit of the manufacturer or companies.

Egoism theory, a consequentalist theory, suggests that any action taken by and
individual or an entitiy is fair and right if the action promotes its self-interest. Ethical
egoism stated that we ought to be selfish whilst the psycological egoism stated that we
are indeed selfish naturally. According to the egoism theory, the action of the
manufacturer of the pyjamas to sell the toxicated products towards the exporters are
considered morally right because since the intention of the sales were to generate
income and benefits for the company’s interest.

In contrary to Egoism and Friedman’s CSR theory, the application of Kant’s and Due-
Care theory are against the company’s action. Kant’s theory defines an ethical
approach as a non-consequentialist which views the rightness and wrongness of an
action is not based on the consequences nor results, yet its focuses more on the basis
of its intrinsic features, or in another term “good actions comes from a good
intention” (Atwell, 1986) Kant stated that having a good will is the key in a company
and every action should have a moral value. The Due-Care theory supports Kant’s
point of view towards this problem, since “its the company’s obligation to carry the
duty of protection, manufacturers possess a moral obligation to protect its customers
against the anticipated risks from their products” (Jeurissen, 2007). Thus, both of
these theories considered the action of Tris-impregnated pyjamas to be unethical and
morally wrong since the action will harm the lives of the children for the sole purpose
of economic benefits and the company did not carry their duty of protection towards
the customers regardless it was proven to be dangerous for sales.
Opinion and Conclusion

If I were to be the manufacturer of Tris-impregnated pyjamas, I will focus my priority

towards the maintaining the company image and the moral values towards my target
market. The action taken by the manufacturer by selling the remaining items to
exporter for dumping considered to be morally wrong. I would take the social
approach rather than focusing on getting sales since my company is the one to blame.
I will provide solution by cooperating with the governments and choose to benefit the
consumers, society and stakeholders of the company. I will adopt the Utilitarianism
theory which is a consequentialist theory that supports an action to be morally right
according to the level of happiness provided towards its stakeholders. Based on this
theory I would seek to maximize the happiness in the long-run, rather then happiness
in a short-time period. Therefore by getting rid of all the remaining pyjamas it will
only give the company a short time happiness yet in the long-run the company will
face with many ethical issues and the image of the company will be bad and cannot be
maintain anymore since the harm has been done towards the stakeholders. As the
manufacturer I will also follow the Kant’s and Due-Care theory since the
manufacturer will be motivated to provide further safety regulation and protect the
customer according to the duty of care. In addition, disposing the remaining toxicated
pyjamas would save a number of children’s lives rather than dumping it for the sole
purpose of getting economic benefit for the company. The happiness produced by
being socially beneficial is greater than the happiness produced by being profitably
for the company. To conclude, the Tris-impregnated pyjamas should be destroyed
instead of dumping it to another countries and as a manufacturer, it is a must to focus
on the safety of the product by monitoring the raw-materials and the process of
production of the product to avoid future problems and ethical dillemas.