Photo Source: http://www.dillerlaw.com/gm-ignition-switch-recall-starts-multiple-investigations/ Retrieved on September 10th, 2014
The stakeholder theory states that for a corporation to be successful it must never look at one particular stakeholder in isolation but rather consider each stakeholder’s individual desires equally, which creates value for everyone. The values of the consumer stakeholder’s of General Motors were neglected when the corporation ignored the substandard ignition switches in two models of cars. This oversight by the leaders of GM resulted in thirteen deaths of GM customers.
One would assume GM has a code of ethics that emphasizes an importance on open and honest communication with customers while constantly improving their services and investing in innovative solutions to create value for stakeholders. If these values exist, they certainly were not applied when the company failed to recall two car models until a decade after the defect was discovered and thirteen lives had been lost.
Overlooking this defect was a breach of ethics of any reasonable consumer producing company. The decision was most likely made in order to avoid the high cost of a recall and a public relations setback. Ironically, these objectives were not achieved. Instead, the company faces both costly setbacks and a severely hindered reputation a decade later. The article references a term “ethical fading”, a way of describing how managers often place a high importance on internal stakeholders values such as profit while losing sight of their company’s morals, resulting in a breach of ethics and a lack of recognition for all stakeholders in the company.