It is unfortunate but true that countless businesses around the world would like to make profits even if it means that they must do so at the expense of the consumer. Economists refer to profit maximization as the sole aim of the producer, while utility maximization is the goal of the consumer. The latter pays for a product without feeling that he or she has entered a loss. But, what if the producer or the business selling a particular good does not care to check if the product meets quality standards that are expected for the price paid by the consumer?
If, for example, a medicine or food product is poisonous – the consumer must pay for it with his or her life. It is for this reason that Shaw and Barry discuss corporate compliance for the benefit of the consumer in Chapter 10 of Moral Issues in Business. Seeing that consumer satisfaction is a necessary condition for a successful business deal, organizations around the world must be conscientious enough to produce and sell goods that meet quality standards consonant with the price they charge for their products.
If all that an organization cares about is increases in its revenues, it may turn a blind eye to consumer satisfaction. In this case, the organization should expect failure in the long run. Moreover, if an organization refuses to check that its products meet health and safety standards for consumers, it may take the government to intervene on behalf of the consumer. The Food and Drug Administration is undoubtedly one of the best governmental organizations in the world checking on food and medicines to ensure that the American consumer does not have to suffer the ill effects of unhealthy foods and medical products.
The United States is one of the biggest consumers of imported goods. The developing world with its low costs of production, therefore, happens to be a big producer of goods for the American consumer. Although it makes good business sense to buy from the developing world, it is a well-known fact that developing countries have not yet adopted the laws and standards applied to organizations in the civilized world.
Corporate compliance and corporate governance are both weak, so therefore governmental organizations of the United States must check on products that enter the U. S. from the developing world to ensure that the U. S. consumer is not harmed by the business transaction. As an example, China is not a rich country with the kinds of laws and standards applied in the United States. Yet, China is a big exporter of goods to the United States.
Because it is profitable for China to export its goods to the U. S. and for the U. S. to import Chinese products, the Chinese organization cannot stop the Food and Drug Administration of the United States from taking its safety measures before Chinese food and medical products are marketed and sold in U. S. markets. After all, consumers in the U. S. have recently dealt with health-related threats thanks to international sales and marketing; e. g. “contaminated blood thinners manufactured in China and salmonella-tainted peppers imported from Mexico (“FDA to Open Inspection Office in China This Year”).
” It is for this reason that the Food and Drug Administration of the United States also wants to institute its safety laws for foods and medical products sold to the U. S. consumer by the Indian, the Latin American, and the Middle Eastern organization. As mentioned previously, products sold by developing countries are of particular concern (“FDA to Open Inspection Office”). In these poor nations, businesses may not consider ethics as they seek to increase their revenues, and there may be weak or no governmental checks on the quality of products. From the viewpoint of the FDA, however, the U. S. consumer is the biggest stakeholder as far as international marketing and sales of foods and medical products are concerned.