Varying Ethical Expectation Placed on Tesla and its Customers

By Andreas Kougionas

This blog is a response to the following article: http://www.businessinsider.com/elon-musk-tesla-problems-2016-9

     One can say that Tesla in many ways is a business with a “social conscience”. According to Freeman’s Stake Holder theory Tesla satisfies the society through innovations in technology, sustainability and many more. In addition, financiers are appeased by the large returns as the early stockholders have been provided with a 1000% return on their investment (DeBord). However, Tesla’s inability to deliver cars on time is dissatisfying customers and thus potentially making Tesla unsuccessful through the Stake Holder theory lens (“On a Charge”).This brings up the following question:

What is the responsibility of customers in assuring greater social satisfaction and how is it similar to businesses?

     Let’s take the example of the Volkswagen scandal which occurred in 2015. Volkswagen had a choice to install the device which would alter the cars performance when being tested (Refer to Figure 1). The ethical decision if viewed through a utilitarian lens would be to not install the device. All stakeholders would benefit from that decision except Volkswagen which may suffer an economic loss. Now in the case of Tesla customers have two decisions similar as in the Volkswagen example, either to purchase or not purchase a Tesla car. Purchasing the car assuming the customer is able and interested will benefit all the stakeholders mentioned in paragraph 2, however, the customer may not be satisfied because of the delay. If this situation was again seen through a utilitarian lens as in the Volkswagen example the decision which creates the greatest good should be taken; which is to purchase the car despite the possible delay and thus dissatisfaction that it may create for the customer. However, many people would disagree with this decision showing that despite the similarities concerning ethics in society businesses and customers are not obliged to act the same way.

Figure 1: Volkswagen Software

Source: Gates, Guilbert, Jack Ewing, Karl Russell, and Derek Watkins. “Explaining Volkswagen’s Emissions Scandal.” The New York Times. The New York Times, 19 July 2016. Web. 10 Sept. 2016.

     In my opinion, this disparity created between expectations placed on business and customers affects the potential satisfaction that can be reached by the society. While businesses are held to a standard to maintain social happiness, customers are not as strictly obliged by anything other than their long-term self-interest which may be indirect. Hence, by striving to educate all stakeholders on the potential benefits of taking the utilitarian choice, businesses and customers will act more ethically. This resembles the economic theory which states that if all stakeholders aim in maximizing their self-interest the benefit to society is maximized as long as there are no negative externalities (Bade).

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Works Cited

Bade, Parkin. Economics Canada in the Global Environment. N.p.: n.p., n.d. Print.

DeBord, Matthew. “There’s Never Been a More Challenging Time to Be Elon Musk.” Business Insider. Business Insider, Inc, 10 Sept. 2016. Web. 10 Sept. 2016

Gates, Guilbert, Jack Ewing, Karl Russell, and Derek Watkins. “Explaining Volkswagen’s Emissions Scandal.” The New York Times. The New York Times, 19 July 2016. Web. 10 Sept. 2016.

Hotten, Russell. “Volkswagen: The Scandal Explained.” BBC News. N.p., n.d. Web. 10 Sept. 2016.

“On a Charge.” The Economist. N.p., 9 Mar. 2016. Web. 10 Sept. 2016.