Ethics Alarms Chief Ethics Scout Fred found this one. Tesla was alerted to one seat belt failure in its Model S, and recalled them all. This involved a huge cost, of course, and that cost will be eventually passed on to consumers and investors. Fred asks,
“Abundance of caution” is the phrase they used, one I gather is familiar to lawyers. Could they have justified some other response that was less catastrophically expensive? Would they have had a fiduciary duty to do so? Or would that duty lie in maintaining the brand image of meticulous quality at almost any short-term cost, building a reputation that could command premium prices for decades to come?
This isn’t the Pinto situation, where Ford knew that a certain number of deaths would occur from a design flaw and calculated that paying off victims and families would be cheaper than fixing the problem. (That was also the calculation in the unjustly infamous McDonald’s hot coffee law suit.) This would have been just a gamble. If moral luck worked in the company’s favor and no other seat belts failed, the company would have ducked all bullets and saved millions. If moral luck bit, however, and there was even a single fatality, an executive was going to have to sit on a witness stand in court and, under oath, answer this question:
“So let me get this straight for the jury. You were aware that a seat belt had failed, you had no idea why, and that a similar failure in another car you manufactured could lead to the death of a driver or passenger, or a child. Yet you made the decision to do nothing, potentially exposing all of your customers and their passengers to death of injury, gambling that the one seat belt was a fluke, correct?”
No responsible manufacturer can risk being asked that question. Ethics Chess demands that a ethical decision be based on considering the likely and unlikely chain of consequences that will flow from it, including plausible worst case scenarios. In this case, as in fictional Amity, the worst case scenario is simply too dangerous and damaging to risk. Surrendering control to the vagaries of moral luck in such a situation is both bad ethics and bad management. Moreover, as Fred suggests, appearing to apply excessive caution (though in this case it really isn’t excessive) in the interests of safety has real benefits for Tesla. It shows potential customers that the company can be trusted; it will be interpreted as the mark of a corporation that places safety over profits, though that’s not quite accurate either.
Like so many business decisions, the ethical thing to do is also competent, smart, prudent, responsible and in the best interests of the company. Surrendering to moral luck almost never is.