A reputed food product company based in India developed a food product for the international market and started exporting the same after getting necessary approvals. The company announced this achievement and also indicated that soon the product will be made available for domestic consumers with almost the same quality and health benefits. Accordingly, the company got its product approved by the domestic competent authority and launched the product in the Indian market. The company could increase its market share over a period of time and earned substantial profit both domestically and internationally. However, the random sample test conducted by the inspecting team found the product being sold domestically in variance with the approval obtained from the competent authority. On further investigation, it was also discovered that the food company was not only selling products that were not meeting the health standard of the country but also selling the rejected export products in the domestic market. This episode adversely affected the reputation and profitability of the food company.
a) What action do you visualise should be taken by the competent authority against the food company for violating the laid down domestic food standard and selling rejected export products in the domestic market?
b) What course of action is available with the food company to resolve the crisis and bring back its lost reputation?
c) Examine the ethical dilemma involved in the case. (Answer in 250 words)
(a) It is evident that the food company is selling inferior quality food products in the domestic market, which does not meet the standards of domestic authorities. They are also selling the rejected export product in the domestic market for profit maximisation with no concern for the laws of the country and the health of the citizens. Hence, strict action is required to be taken against the company under the relevant laws like the Prevention of Food Adulteration (PFA) Act, 1954.
(b) The company must conduct a thorough investigation and act strictly against the officials involved in the manufacture and sale of the rejected export products in the domestic market or producing a lower quality product than what has been approved by the competent domestic authority. The food company must immediately recall all the inferior food products from the market to avoid further harm. Furthermore, the company must accept their mistakes, inform the public and the government about its remedial actions, and ensure that such violations are not repeated in the future.
(c) The main goal of a company is to maximise profit. However, the production cost of quality products is more, which reduces their profit margin. Moreover, increasing the price of the product reduces the demand for the product. Hence, the dilemma of a company is to balance their social and legal responsibilities with their goal of maximisation of profit. The ethical dilemma faced by the government officers is that such incidents not only causes loss of reputation to the company and the country. Such incidents adversely affect the exports and create anger in the society. However, not taking strict action can affect the health of the people. (279 words)