Ethical Issues Affecting Businesses: Case Study of Kobe Steel, Japan

ETHICAL ISSUES AFFECTING BUSINESSES
CASE STUDY OF KOBE STEEL, JAPAN
May 20, 2018

Introduction
Business ethics is the way people differentiate wrong and right in the line of their duties and
conduct in business. This paper highlights the business ethical issues brought out in the article
‘Kobe Steel chief is resigning over fake data scandal,’ published on 6th March 2018 by Daniel
Shane. Kobe Steel is a metal manufacturing and supplying company based in Japan. It is known
for producing high-quality steel, aluminum, and copper metals for sale to companies making
cars, planes, and other metallic products.
However, the company admitted to providing false data on the quality of metals, including
mislabeling, in October 2017. This is after complaints came up from consumers, leading to
temporary halts in production processes. The company’s Chief Executive Officer announced that
he is set to down to pave the way for a replacement. This essay points out some of the ethical
issues evident in the article. This essay outlines some arguments concerning business ethics. The
main issue in the picture is product quality.
1. Common Good
As a business, all guidelines and regulations put in place to control the product quality must be
considered in all production steps. Failure to this gives a great risk to consumers. In this case,
using low-quality metal in manufacturing cars and planes puts people’s lives at a great risk.
Violation of product quality standards can lead to the closure of the company and should,
therefore, be taken seriously (Claudia & Painter-Morland, 2014). The moral principle of
common good ought to be followed in Kobe Steel Company.
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2. Fairness
Employee treatment issues pop up in the article. The management expects all employees to abide
by all the rules set by the company. Insider trading and other common cases of dishonesty are
unethical. On the other hand, the employees of the Kobe Steel Company have a tendency of
charging customers expensively for low-quality products is unethical as speculated by price-
regulatory bodies. The implications of unfairness may lead to firing, paying huge penalties and
facing court charges (Byung, Francis, Andrew & Tony, 2014).
Moreover, leadership ethics is another issue evident in this article. The Chief Executive Officer,
Hiroya Kawasaki, failed to demonstrate leadership ethics by deciding to resign. As much as he
wanted to protect his personal reputation, he should have tried to rectify the company’s image
first. Having worked for it for so many years, he should have based on the previous trust that the
company had earned from its consumers. The future of the company did not seem to bother him,
hence displaying his disloyalty.
3. Honesty
The main ethical issue pictured in the article is about Product and Brand. It is ethical for a
company to produce products that comply with the safety regulations in terms of design and
other considerations. Any business’ ethics should always put the consumer at the primary level
(Michael, 2016). Contrarily, the Kobe Steel Company failed to satisfy the regulatory
requirements set up by the regulatory bodies, producing low-quality metals that posed a great
danger to consumers, forcing them to stop the production process. In addition, professional
ethics is another issue brought about in the article. The involvement of the employees in
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