Social Responsibility Topic – Chapter 1

NEWS COMMENTARY 4

Course/Number

Synopsis

The article GM fined $35 million for faulty ignition switch recalldelay by Puzzanghera (2014), talks about General Motors delayedrecall for its compact vehicles, alleged to have ignition switchproblems. The article notes that GM has been aware of the problem fora decade, yet they delayed recalling of the vehicles to February2014. The ignition switch accidentally switches off the cars, whichdisables steering power, as well as the airbags. This means that inthe incidence of a crash, passengers are unprotected by the airbags.The company has violated the NHTSA rules that compel automakers toinform on safety faults in a period of five days after discovery ofthe flaws. It is obvious that GM failed to act timely in dealing withthe problem, which has resulted in deaths and car accident relatedinjuries. As a result, failing in their social responsibility ofensuring that customer’s safety is ensured through purchase oftheir product.

Relevance to Topic

The article expounds on the relevance of ensuring corporate socialresponsibility. The article also illustrates the negative resultsthat a company may face due to lack of social responsibility. It isapparent that GM does not ensure its social responsibility to itscustomers. By delaying the recall of faulty vehicles, there have beenunwarranted deaths and injuries to passengers that have purchased thecompany’s products (Puzzanghera, 2014). Corporate socialresponsibility refers to the unrelenting commitment undertaken bycompanies to ensure sustainable economic growth. It also entails thecommitment to working with stakeholders and society in general inenhancing their quality of life. Social responsibility is symbolizedby corporate practice (Werther &amp Chandler, 2011). General Motorsis an international company, whose social responsibility programfocuses on ensuring that the products it sells are safe to use. Thecompany’s social responsibility also entails engaging in activitiesthat ensure environmental sustainability.

Puzzanghera (2014) notes that GM unlawfully acted by delaying torecall faulty vehicles. Hence, they failed in ensuring their publicsafety responsibilities, which they have admitted. This implies thatthe company’s values are lacking. Such actions reduce thecompetitiveness of the company, especially in a market where thereare many competitors. In reality, a company that invents actionsbased on social responsibility is more competitive, and reinforcessales because of the good image, in turn enhancing customertrustworthiness. The delay creates mistrust in customers over thecompany’s products. It is impossible for customers to continuetrusting a company that progresses to sell to them a product, despitebeing aware of the dangers posed (Michaels, 2014). Hence, morecustomers are likely to opt to purchase cars from other companies,which detriments the competitive strategy of GM.

In ensuring social responsibility, a company should evaluate theresolutions and measures taken in the formation and sustenance ofcompetitive advantages (Werther &amp Chandler, 2011). Based on thearticle, it is apparent that measures and resolutions like delayingproduct recall can be detrimental to the company’s image. Inaddition to causing significant losses in sales, the company has todeal with settling the many lawsuits filed against it. GM has to paya $35 million fine as settlement with the federal administration.There have been many critics citing that the fine is too littlecompared to the company’s earnings, which poses more losses thatare possible for GM. Every company should endeavor to ensurecorporate social responsibility, by placing customer needs andstakeholders in general as paramount to their operations.

References

Werther, W. B., &amp Chandler, D. (2011). Strategic corporatesocial responsibility: Stakeholders in a global environment. LosAngeles: SAGE.

Michaels, J. (2014, Mar. 4). GM’s delayed recall a moral failure.Los Angeles Daily Journal, 1-1.

Puzzanghera, J. (2014, May 16). GM fined $35 million for faultyignition switch recall delays. Los Angeles Times. Retrievedfromhttp://www.latimes.com/business/autos/la-fi-gm- recall-ignition-switch-20140516-story.html