Reference no: EM133197234

Question: You don't have to search hard to find controversies resulting from poor business decisions. Take, for example, the high-profile case involving General Motors (GM). In 2002, General Motors became aware of a faulty ignition switch in one of its vehicle models. The defect caused the ignition to turn off when a heavy key chain was being used by the driver. The defect could also prevent airbags from deploying during an accident. Despite the dangers, GM chose not to repair the defect, opting instead to issue service bulletins to dealerships instructing customers to keep key chains light. Although it is required by law to report safety-related defects, GM did not report the defect to the U.S. Department of Transportation's National Highway Traffic Safety Administration.

In 2005, the first reported fatality occurred as a result of the faulty ignition switch. However, it wasn't until 2014 that GM issued its first recall. Unfortunately, by that point, hundreds had either died or been injured in accidents involving the faulty ignition switch. Since then, millions of vehicles have been recalled, and GM is facing lawsuits filed by consumers, along with governmental regulatory agencies. GM prides itself on being an ethical and socially responsible company, but do its poor business decisions here support that notion?

Upon successful completion of the course material, you will be able to:

Explain the relationship of business ethics and social responsibility to the law.