Business Ethics in the Automobile Industry: A Case Study of Tesla Inc.

This report discusses the ethical issues faced by the automobile industry, regulations in the UK, and a case study of Tesla Inc. It covers issues such as data privacy, marketing ethics, and environment safety. The report concludes with a suggestion on whether the industry requires stricter regulations.

Business ethics report

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK...............................................................................................................................................7
CONCLUSION ...............................................................................................................................7
REFERENCES:...............................................................................................................................9
Books and Journals:....................................................................................................................9
Online .........................................................................................................................................9

INTRODUCTION
Business ethics is also known as corporate ethics which is the study of different ethical principle
and problem which are faced by the company within their business environment. Basically these
are the set standard, values and principles which help in governing the different behaviour of an
in individual with in the business organisation(Bint-Tariq and Nobanee, 2020). This report is
based on the auto mobile industry. This report is going to give information about the different
types of issues which are faced by the car manufacturing company along with the regulations in
relation to the respective industry. Afterwords this report covers the detailed information and
overview of the Tesla Inc. The company is multinational brand of America which mainly deals
in electric cars. The company was founded in July 2003 and the headquarters of the respective
company was situated in Austin, Texas, United States. The following report also covers the
different ethical issues which are faced by the choose company and along with this strict actions
which are require in the auto mobile industry.
MAIN BODY
Choose a specific industry
Auto-motive is a Greek work which means “self of motion”and this term was proposed by Elmer
Sperry. Different types of organisations and companies are comprise in the auto-motive industry
which are engaged in designing, manufacturing, marketing and selling of different types of
motor vehicles. The car manufacturing company came into auto-motive industry, which is being
considered as one of the largest industry in respect to the revenue generation. This industry does
not include all those organisation which are engaged in the maintenance of cars like repair shops
and motor fuel filling pumps. The first and the foremost motive of the car manufacturing
companies is safety of their customer (Grosser, Moon and Nelson, 2017).
Identify and describe the main ethical issues facing by the automotive industry
Business ethics are the set values and principles of the company which not only control the
behaviour of organisation but also govern the different activities of the individuals. Different
types of business sector like advertising, social media, financial investment, fashion and
automobile industry face the ethical issues. Following are the issues in relation to the car
manufacturing sector has been discussed below:-

The most concerned issues which are related to the car manufacturing is automation which is
related to the auto-mobile industries as well as the safety issues which is depend on the level of
accidents among the automated cars(Waweru, 2020) . Automation in the auto mobile industry is
not only serves them in minimizing the cost of cars but also improves their process efficiency in
relation to technology and economics studies. Due to the increase in the number of accidents the
expert of the ethical studies have raised their voices in relation to the higher level of automation
and more safety measures.
On the similar note, the privacy of an individual is also being considers as one of the major
ethical issue which are faced by the car manufacturing company. For example like location is
one of key issues which is related to the privacy of an individual. The person who used the car
doesn't want to disclose their location and this is the right of an individual where they want
disclosed their location or not (Musa and et .al., 2020). But after coming the automation factor
in the automobile industry like GPS tracking system keep away the user of the car from their
rights.
Data collected from the online sources and then use these data not only in the production process
but also in the security of the user is also being considered as one of the most important ethical
issues which are faced by the car manufacturing companies. It has been reported that, after
increasing in the cybercrime tactics and activities the security of the cloud data has become more
difficult. Due to paid more focus on the automation in the car manufacturing industry the data
security has been turned into most important ethical issue.
In addition to this, marketing aspects and techniques of the car manufacturing companies is also
being considered as one of the major ethical issue in the auto-mobile industries. The car
industries face different types of ethical issues in relation to marketing their car like advertising,
buyer beware and covenant marketing. For example like price ethics, most of the organisation
who are engaged in the manufacturing of cars follow a policy of selling their cars at the lowest
price. Due to this market of the industry got penetrate and as soon as the pricing policies of the
companies has been revised(Palanski and et .al., 2021).
Another ethical issue which are faced by the automobile industry is environment safety and
protection. Smog, carbon monoxide and many more toxics gases which are released or emitted
by the cars has become a major issue for this industry. These gases are very harmful for the

nature as well as for the human beings. In addition to this car manufacturing industry also face
the ethical issue of supplying the cars in the competitive market.
Detail automobile industry regulations
Type approval
If an individual purchased a vehicle in Unite Kingdom and they want to operate them in the
roads then they must have to be registered and time approved. In UK Vehicle Certified Agency
is responsible for issuing the type approval for the vehicle. Basically this is an executive agency
of the Department for transport (Purwanto and et .al., 2019) . In UK there are two type of
approval which are needed, the first one is EC type approval and another one is national type
approval. The EC type of approval is one in which approval is granted without without the need
for vehicles for further inspection and national type approval is suitable for those cars which are
imported and manufactured in low volume.
Registration:-
It is very important for an individual to registered their vehicles if they want to use the road of
United kingdom. The vehicles must be registered by the name of the owner and Vehicle
Licensing Agency. The holder of the vehicle must hold the Vehicle Registration
certificate(V5C). The name which have been written on the certificate is responsible for all the
obligation related to the license and number of the vehicle. In UK it is impossible to register a
vehicle or get the licensed by a person without the type approval. As this certificate is not being
considered as an evidence in relation to the ownership because the owner and registered are
always not the same.
Insurance:-
Under this legislation, if an individual wants to use the vehicle then it is compulsory to have a
insurance cover against third party damage. This law is totally against the law of Europe in
which generally vehicles are insured not an individual. Recently Automated and Electric
Vehicles bill has been passed by the government of UK. This bill contains new insurance
measures in relation to the advance vehicle technology. Under this bill an individual who suffer
damages in an accident has been allow to claim against insurance(Robertson, Voegtlin and
Maak, 2017).
The government of the UK implement European Union type approval Directive 2007/46
regulations2009 which is related to the approval of road vehicle along with this regulations

715/2007 is related to the emission from the vehicle, 661/2007 this regulation is related to the
safety of the individual as well as the vehicles. According the European Union directive
2003/53/EC this regulation is related to the vehicle end life which also has been implemented by
the government of UK.
Brief overview of the Tesla Inc. and ethical controversy has been faced by the respective
company
Company overview
Tesla Inc. is a public listed company which was founded in July 1 2003 by Martin Eberhard and
Marc Tarpenning as Tesla motors. The company was co-founded by Elon Musk since 2008 after
a huge investment of US dollar 6.5 million and he is also the CEO of the company. Tesla came
in the auto-mobile market with a motive to revolutionise the automotive sector. The engineers of
the company prove that the electric vehicle are more comfortable, reliable, quicker and better in
comparison to the gasoline and fuel cars(Wood, 2017). Company deals in manufacturing of
electric cars, solar panels, solar roof tile and many more product along with their services. Tesla
Inc. is being considered as one of the most valuable company all across the globe with market
cap up of around $1 trillion. The company capture around 16 % market of plug in electric and 23
% market of the battery electric. In 2020 company has installed one of the largest battery energy
storage system with around 3 gigawatt- hours. The total revenue which was generated by the
company in 2020 is around 31.5 Billion US dollar all across the globe along with this company
provide employment around 70,757. Company have around 598 retail stores all across the globe
and the areas where company provide their services are North America, Europe, East Asia, West
Asia, Oceania.
Recent ethical controversy:-
The recent ethical controversy which has been faced by the Tesla Inc. is the termination of their
employees because of the Covid 19 pandemic. The CEO and co- founder of the company Elon
Musk promised to their employees that if they felt uneasy in coming to the the office they could
stay at home. The management of the company also said that they would not be penalized and
terminated if they don't came to work (Tajalli and Segal, 2019) . The CEO of the company write
and email to their factory worker that “ if you feel uncomfortable in coming back to the work at
this time, please don't feel obligated to do so”.In the month of may the two workers of Tesla has
received a termination letter from the Human resource department of the company because of

failure to return to the work. Both of them provide reason for staying at home to their manager
but ultimately they get terminated from the company.
In second week of the may company start their production functions. But most of the employees
said that the company is not able to follow the proper guidelines of the Covid 19 which was
developed by the government of the nation. Company is failing to follow the social distancing
guidelines, sanitation of the machinery as well the employees along with this lack in following
the rules related to the mask and proper hygiene. Due to this new cases of infections has also
been seen in the company. Around 10,000 employees has been reported Covid positive at the
plant.
Does the industry require stricter regulation?
From the above discussion kit has been understand that the auto-mobile industry must have
required the strict rules and regulation in relations the employees, data privacy, environment,
privacy of an individual and many more(Tormo-Carbó, Seguí-Mas and Oltra, 2018). It is very
import for the organisation to follow all the rules like environment laws or employees protection
law in order to maintain the safety for the employees. Government of the country must have to
ensure that all the organisation working according to developed law if they don't work according
to the rules the rules they must be penalized. To save the interest of the organisation, government
of the nation must have to make strict rule in relation to the data privacy of the company and
marketing ethics. Individuals who hack the private data of company must be considered as crime
in the eyes of law and government give them punishment in relation to money or many more.
The strict regulation also has been made in relation to the protection and the safety of the
environment. If any organisation don't follow the proper combustion method in relation to the
decomposition of the product or other environment law then company have to beer the
consequences.
TASK
CONCLUSION
From the above report it has been concluded that business ethics plays a very important role in
an organisation. If an organisation follow the proper business ethics then it become simple for
them to achieve a successful position in the market. This report concluded that, different types of
business ethics have to face by the automobile industry. Ethical issues like employment relation,

data privacy, marketing ethics etc. not only reduces the efficiency of the company but also affect
the different business functions. This report also concluded the different laws and regulation in
relation to the automobile industry which are developed by the government of UK and along
with this different European Union laws which have been implemented by the nation
government. Afterwords this report concluded a brief overview of the Tesla company and the
different ethical issues which are faced by the respective company. This report also concluded a
ethical controversy which have been faced by the company along with this a suggestion has been
given in relation to the auto-mobile industry whether they require strict regulations or not.

REFERENCES:
Books and Journals:
Bint-Tariq, M.N. and Nobanee, H., 2020. Business Ethics and Finance: A Mini-
Review. Available at SSRN 3538699.
Grosser, K., Moon, J. and Nelson, J.A., 2017. Guest editors’ introduction: gender, business
ethics, and corporate social responsibility: assessing and refocusing a
conversation. Business Ethics Quarterly, 27(4), pp.541-567.
Musa, M.A and et .al., 2020. Islamic business ethics and practices of Islamic banks: Perceptions
of Islamic bank employees in Gulf cooperation countries and Malaysia. Journal of
Islamic Accounting and Business Research.
Palanski, M and et .al., 2021. Quantitative research on leadership and business ethics:
Examining the state of the field and an agenda for future research. Journal of Business
Ethics. 168(1). pp.109-119.
Purwanto, R.M and et .al., 2019. Study the importance of business ethics and ethical marketing
in digital era. Journal of Critical Reviews, 6(5), pp.150-154.
Robertson, D.C., Voegtlin, C. and Maak, T., 2017. Business ethics: The promise of
neuroscience. Journal of Business Ethics. 144(4). pp.679-697.
Tajalli, P. and Segal, S., 2019. A Nietzschean re‐evaluation of values as a way of re‐imagining
business ethics. Business Ethics: A European Review. 28(2). pp.234-242.
Tormo-Carbó, G., Seguí-Mas, E. and Oltra, V., 2018. Business ethics as a sustainability
challenge: Higher education implications. Sustainability. 10(8). p.2717.
Waweru, N., 2020. Business ethics disclosure and corporate governance in Sub-Saharan Africa
(SSA). International Journal of Accounting & Information Management.
Wood, G., 2017. Reflections on business ethics through 1992-2017. European Business Review.