Answers
There are two alternatives that are present before the company. The first alternative is to do nothing with the hope and the expectation that no one will get injured in the best case scenario. In the worst case scenario this alternative is based on the expectation that only 5 people will get injured. The second alternative is to recall all the 5 million tires and rectify the product defect.
My recommendation, as a marketing executive, would be to recall all the tires. The recommendation is based on two primary reasons.
Firstly this is the ethical thing to do. The tire company has a responsibility towards its customers to ensure their safety and the safety of their families. Thus they have a moral and ethical obligation to recall tires to rectify the current defect to ensure that no one faces any chances of getting injured. The second reason is that if people do get injured then the brand equity of the company will get damaged. The company will be accused of being careless, irresponsible and will not be regarded as a socially responsible entity.
In the long run this will have severe negative ramifications for the company. As the brand equity and goodwill of the company nosedives future sales will also nosedive and the company will find itself in a situation of falling revenues. This situation will create financial difficulties for the company and the company will find it extremely difficult to come out of this situation.
So keeping in mind the best interests of all the stakeholders and keeping in mind the company’s ethical and moral responsibilities I would recommend the company to recall the tires. This alternative will not only serve the best interest of the customers but will also help the company to maintain its brand equity and goodwill among the customers.
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