Executive Summary
Tesla Inc. has become one of the most famous players in the electric car market in recent years and can truly be called the most popular at the moment. However, the company has recently come under scrutiny due to potentially unethical marketing actions. Tesla Inc. is accused of creating a secret group that aims to curb complaints from drivers that are related to mileage problems of vehicles. This covert operation was carried out to reduce the maintenance costs of electric vehicles after they were sold.
Blocking people’s complaints, in theory, was supposed to create a positive image of Tesla’s products, which is obviously false. Such a deceptive strategy could undermine the confidence of Tesla’s customer base and significantly reduce product satisfaction. The ethical issues that arose in the background of these actions are quite complex and require more in-depth analysis. To this end, the nature of the problem will be examined in the context of ethics, and potential recommendations will be provided to address the misunderstandings that have arisen.
The purpose of this assessment is to provide a concordial ethical consideration that has been violated by the company, as well as an assessment of the company’s ethical reputation after the incident. An analysis of how Tesla was able to solve this problem internally and externally will provide a more accurate understanding of the company’s current ethical record. In this context, it is important to consider the need for transparency in companies to maintain a positive reputation and reliability status for customers in the market of electric vehicles, in which the competition is increasing every day.
Company and Social Issue Introduction
Tesla was founded by Elon Musk in 2003 and was a pioneer in the mass production of electric vehicles (Shao et al., 2021). At the moment, the company can be considered a big player in its field of activity and, in fact, a transforming force in automotive production. The core principle of the company is to maintain commitment to sustainable transport and the growth of innovation, and these factors have played an important role in ensuring the company’s success and broad market visibility.
Tesla has a large market capitalization, and the company’s founder, Elon Musk, holds the majority interest (Liu, 2021). The company’s product line is quite diverse and includes both electric vehicles and global developments for natural and solar energy storage. These factors suggest Tesla’s broad vision of a sustainable ecosystem that would not harm the environment.
Despite its positive side, the company has recently found itself at the center of ethical concerns. They are linked to the fact that Tesla created a secret team that was forced to suppress customer complaints related to the vehicle’s mileage. This problem is quite common among electric vehicles, and it occurs against the background that owners do not want to discharge an electric vehicle until they reach the charging station. The strategy of hiding such complaints from customers calls into question the claim that Tesla is committed to ensuring the satisfaction of its clients and takes maximum care of their safety. In addition, there is an even more serious problem with the deception element, which completely distorts the realities of Tesla electric vehicles.
Despite Tesla Inc.’s broad commitment to innovation, the company has faced challenges related to the reliability and transparency of communications as well as the quality of products provided. Problems with autopilot functionality in electric vehicles are another example of why companies should pay attention to solving ethical problems with urgency (Liu, 2021). In addition to the incidents associated with autopilot, the creation of a secret group forces customers to pay even more attention to the ethical rep of the company before purchasing products.
The company strives to solve social problems, especially those related to ethics, through innovative approaches. On the outside, Tesla was confronted with a serious media outburst over an ethical incident involving the creation of a secret group. Elon Musk’s public statements often provoke resistance from regulators, increasing external pressure on the company (Shao et al., 2021). Tesla is clearly implementing an innovative approach in the automotive industry, but in this context often ignores ethical considerations.
From an ethical point of view, the focus of the company on transparency and ethical behavior should be paramount, as it ensures a high level of customer trust (Kallioinen et al., 2019). Suppressing the complaints of customers emphasizes the need to learn about the internal processes in the company and how strong the focus is on customer welfare. Ethical and social issues need to be analyzed with implications for stakeholders, which include both clients and investors and local communities.
Company Background on the Social Issue
Milton Friedman is an influential economist who is competent in the subject of equity capitalism. An economist could approach Tesla’s ethical problem of suppressing customer complaints about product use in terms of prioritizing shareholder value maximization. This can be seen in the context of the fact that the co-responsibility of any business is aimed at maximizing profit, which is legitimate (Clarke, 2020). This means that companies are not allowed to take any deceptive actions that might confuse shareholders and directly affect their interests.
Looking at the specific accusations that Tesla received, it can be concluded that Friedman would actively advocate transparency in the company’s activities, which means honesty in the interests of his customers and stakeholders. Withholding information that a company has engaged in in order to hide potential problems with its products can be considered an abuse of trust (Clarke, 2020). Both shareholders and customers who have experienced problems with electric vehicles may be affected. In accordance with its principles, Milton Friedman recommended that the company immediately address the existence of the problem and address it as soon as possible in order to preserve the company’s credibility.
In addition, from the economist’s point of view, companies should pay great attention to compliance with the legal framework on which the enterprise operates. If Tesla violates any rules or laws, it will be possible to talk about wrongful activities and the need for urgent corrective actions. This scenario is possible if it is proven that suppression of customer complaints is indeed a violation of the law in the territory in which the company operates. The urgency of the response will eliminate potential legal consequences for Tesla Inc., as well as help to protect the company from further deterioration in its already deteriorated reputation.
The philosophy of Milton Friedman is that Tesla will take steps on his own to correct existing omissions. In this case, the management of the enterprise should pay attention to compliance with legal requirements and take into account the interests and expectations of stakeholders, which will demonstrate the importance of compliance with ethical conduct in the future activities of the company. After an incident occurs, the company will be responsible for taking actions that will correct past mistakes.
References
Clarke, T. (2020). The Contest on Corporate Purpose: Why Lynn Stout was Right and Milton Friedman was Wrong. Accounting Economics and Law – A Convivium, 10(3). Web.
Kallioinen, N., Pershina, M., Zeiser, J., Nosrat Nezami, F., Pipa, G., Stephan, A., & König, P. (2019). Moral judgements on the actions of self-driving cars and human drivers in dilemma situations from different perspectives. Frontiers in Psychology, 10. Web.
Liu, S. (2021). Competition and valuation: A case study of Tesla motors. IOP Conference Series. Earth and Environmental Science, 692(2), 022103. Web.
Shao, X., Wang, Q., & Yang, H. (2021). Business analysis and future development of an electric vehicle company–Tesla. Proceedings of the 2021 International Conference on Public Relations and Social Sciences (ICPRSS 2021).