R B Dillman Company Manufactures A High-Tech Component Used ✓ Solved

R B Dillman Company Manufactures A High Tech Component Used In Bluet

R. B. Dillman Company manufactures a high-tech component used in Bluetooth speakers that passes through two production processing departments, Molding and Assembly. Department managers are partially compensated based on units of product completed and transferred out relative to units of product put into production. This compensation system is intended to encourage efficiency and minimize waste.

Jan Wooten is the head of the Molding Department, and Tony Ferneti is her quality control inspector. During June, Jan hired three new employees who were not yet skilled in their tasks. Consequently, many units produced in June had minor molding defects. To maintain the department’s high rate of completion, Jan instructed Tony to pass all units that had defects not detectable to the human eye into the next stage—regardless of cosmetic or minor defects. Jan justified this by stating that company and industry tolerances are too high and that less than 2% of units are subjected to stress testing in the market, reducing the risk that defective units would reach consumers. She claimed that this approach saved the company money.

Potential stakeholders involved in this situation include Jan Wooten, Tony Ferneti, other employees, consumers, suppliers, shareholders, and creditors. Stakeholders are affected by the decision to pass defective products, as it impacts product quality, company reputation, and financial performance.

In this scenario, Tony has several alternatives. He could choose to follow Jan’s directive, passing defective units into the assembly line as instructed. Alternatively, he could raise his concerns with management, advocating for the defective units to be remade or reworked. Finally, Tony might decide to refuse to pass the defective units, risking conflict or disciplinary action, but maintaining ethical standards and product integrity.

To prevent similar situations in the future, the company should reevaluate its compensation and performance measurement systems for managers and employees. The current structure, which rewards managers based on tangible output—number of units completed and transferred—creates incentives that may encourage cutting corners or bypassing quality controls. As pointed out by Woods (2021), compensation schemes based solely on quantity can lead to compromised quality standards. Implementing performance metrics that balance quality and efficiency, such as customer satisfaction and defect rates, would help align employee incentives with ethical practices.

Additionally, the company could strengthen quality assurance protocols and promote a culture that emphasizes ethical integrity over meeting production quotas. Training employees to recognize the importance of quality and ethical standards and establishing clear channels for raising concerns would further mitigate the risk of unethical decisions. Regular audits and supervision could also serve as deterrents against passing defective components.

Conclusion

The ethical dilemma faced by Tony in this scenario underscores the importance of establishing systemic safeguards to prevent quality compromises driven by incentive structures. Stakeholder interests—including customers, employees, and shareholders—must be prioritized through responsible management practices. By restructuring performance metrics, fostering ethical culture, and implementing rigorous quality controls, the company can reduce the likelihood of such dilemmas and promote long-term sustainability and trustworthiness in its operations.

Sample Paper For Above instruction

The case of R. B. Dillman Company highlights critical ethical considerations in manufacturing and performance incentives. The primary issue revolves around the decision to pass defective but visually undetectable units into the assembly process to meet production targets, based on management incentives that prioritize quantity over quality.

Stakeholders involved include internal personnel such as Jan Wooten, the department head, and Tony Ferneti, the quality inspector. Their roles influence the production process and ethical decision-making. External stakeholders include consumers, who rely on the quality and safety of the product, as well as suppliers, shareholders, and creditors, who are invested in the company’s reputation and financial health. Consumers, in particular, are at risk if defective components lead to product failures or safety issues; this can diminish brand trust and market share over time (Treviño & Nelson, 2021).

Johnny’s alternatives in this scenario are limited and challenging. Complying with Jan’s directive may seem the easier route, but it compromises ethical standards and exposes the company to potential legal and reputational damages if defective products reach consumers. Raising concerns with higher management constitutes a responsible action, emphasizing the importance of quality over just quantity. This move may involve risking conflict with Jan or facing professional repercussions; yet, it aligns with ethical business practices. Lastly, refusing to pass on defective units without raising concerns could jeopardize Johnny’s position but uphold integrity and ensure only-quality products proceed to the market.

Prevention strategies are vital to curb similar issues. The current incentive system that rewards managers based on unit throughput fosters a culture where quality is secondary to quantity. As Woods (2021) noted, incentive structures that overly emphasize productivity can inadvertently promote unethical behavior. To counteract this, companies should redevelop performance metrics to include quality indicators, such as defect rate reductions and customer satisfaction scores. This comprehensive approach discourages employees and managers from sacrificing quality for quantity (Kimmel, Weygandt, & Mitchell, 2022).

Furthermore, establishing robust quality assurance protocols, supported by ethical training and a culture that values integrity, will promote accountability. Encouraging employees to voice concerns without fear of retaliation and implementing regular audits can serve as deterrents for shortcuts or unethical practices. Management should also foster transparency and reward ethical behavior, aligning incentives with long-term business sustainability rather than short-term production targets.

By addressing incentive misalignments and strengthening quality controls, organizations like R. B. Dillman can uphold their reputation and ensure product safety, ultimately benefiting all stakeholders while fostering a culture grounded in ethical responsibility. This approach not only mitigates the risk of similar dilemmas but also enhances the overall competitiveness and sustainability of the organization (Treviño & Nelson, 2021).

References

• Kimmel, P. D., Weygandt, J. J., & Mitchell, J. E. (2022). Accounting: Tools for Decision Making (8th ed.). Wiley & Sons.
• Treviño, L. K., & Nelson, K. A. (2021). Managing Business Ethics: Straight Talk about How to Do It Right (7th ed.). Wiley.
• Woods, M. (2021, March 11). Compensation or compromise? The risks of compliance bonuses. Compliance Week.
• Johnson, R. A., & Reynolds, R. C. (2020). Ethical leadership in manufacturing: Cultivating integrity and accountability. Journal of Business Ethics, 164(3), 453–468.
• Baumhart, R. C. (2022). Business ethics and social responsibility. Business & Society, 61(2), 396–414.
• Robinson, D. (2019). Incentive structures and ethical behavior in corporations. Harvard Business Review.
• Smith, J. (2018). The impact of performance-based bonuses on organizational ethics. Journal of Management Studies, 55(4), 684–701.
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• Kim, T., & Park, H. (2021). Quality control in the era of ethical manufacturing. International Journal of Production Economics, 235, 108093.
• Ellis, N., & Taylor, G. (2017). Strengthening ethical standards in manufacturing practices. Management Science, 63(3), 890–903.