The UPSC (Union Public Service Commission) examination is renowned as one of the most prestigious and challenging competitive exams in India. In the year 2021, the General Studies Paper 4, often referred to as GS 4, presented candidates with a diverse array of ethical dilemmas and situational questions. This paper aimed to evaluate the ethical and moral aptitude of aspiring civil servants, testing their ability to navigate complex issues with integrity and sound judgment. Through a series of case studies and theoretical inquiries, candidates were required to demonstrate their understanding of ethical principles and their practical application in governance and public administration. The UPSC GS 4 paper serves as a crucial benchmark for selecting individuals who possess not only the knowledge but also the ethical fortitude necessary to serve the nation with honesty, fairness, and dedication.
Q:11 A Reputed food product company based in India developed a food product for 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 the 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 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 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 which 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.
- 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?
- What course of action is available with the food company to resolve the crisis and bring back its lost reputation?
- Examine the ethical dilemma involved in the case. ( 250 words)
Answer:
Approach:
- Start with a brief intro with the context on private companies profitability.
- Mention the stakeholder .
- Mention the actions should be taken by the competent authority against the food company for violating food standards.
- Mention the Course of action available with the food company to resolve the crisis and bring back its lost reputation.
- Mention the Ethical dilemmas involved in the case.
- In Conclusion mention / highlighting the importance of corporate governance.
Introduction:
- “We are what we think, All that we are arises with our thoughts. With our thoughts, we make the world.”-Buddha. These companies are driven by market forces, competition, and customer demand, which play a significant role in determining their profitability.Balancing profitability with ethical considerations and social responsibility is also an important aspect that private companies need to consider in their pursuit of financial success.
Body:
The stakeholder: The stakeholders involved in the given scenario are:
- Food product company: The company that developed and launched the food product both for the international and domestic markets.
- Competent authority: The regulatory authority responsible for approving and ensuring compliance with food standards and regulations.
- Consumers: The individuals who purchase and consume the food product.
- Shareholders: The owners or investors of the food company who have a financial interest in its profitability.
- Inspecting team: The team responsible for conducting random sample tests to ensure compliance with food standards.
- Rejected export product buyers: The international buyers who purchased the rejected export products.
- Competitors: Other food companies operating in the market who may be impacted by the actions of the food company.
- Society at large: The general public, as their health and trust in the food industry can be affected by the incident.
The actions should be taken by the competent authority against the food company for violating food standards: The actions that should be taken by the competent authority against the food company for violating food standards are:
- Recall of substandard products: The competent authority should direct the food company to recall all substandard products that have been launched in the market. This ensures that the products that do not meet the required standards are removed from circulation.
- Compensation to consumers: The food company should be made to pay adequate compensation to the consumers who have purchased and consumed the substandard products. This compensates them for any harm or inconvenience caused.
- Punitive action: Proportionate punitive action should be taken against the food company as per the provisions of the Food Safety and Standards Act or any relevant regulations. This may include fines, penalties, or other legal consequences to hold the company accountable for its violations.
- Public awareness campaigns: The competent authority should require the food company to contribute a significant amount of money towards campaigns aimed at raising public awareness about food safety standards. This helps educate the public about their rights and the importance of consuming safe and compliant food products.
The Course of action available with the food company to resolve the crisis and bring back its lost reputation: The food company can take several courses of action to resolve the crisis and bring back its lost reputation. Some possible steps they can consider include:
- Cooperation in investigation: The company should fully cooperate with the competent authority in the investigation of the violations. This includes providing all necessary information, documentation, and access to facilities to assist in the investigation process.
- Compliance and corrective measures: This may involve improving quality control processes, ensuring adherence to food standards, and implementing measures to prevent future violations.
- External audit: This audit can help identify any gaps or weaknesses in the company’s processes and systems and provide recommendations for improvement.
- Public apology and transparency: They should communicate openly and transparently about what went wrong, the steps being taken to address the issue, and the measures implemented to prevent similar incidents in the future.
- Rebuilding trust: This can be achieved through consistent delivery of high-quality and safe products, transparent communication, and proactive engagement with consumers and regulatory authorities.
- Continuous monitoring and improvement: The company should establish robust monitoring systems to ensure ongoing compliance with food standards. Regular internal audits, quality checks, and reviews should be conducted to identify any deviations and address them promptly.
- Collaboration with industry stakeholders: The food company can collaborate with industry associations, experts, and other stakeholders to learn from best practices, share knowledge, and contribute to improving food safety standards and practices across the industry.
Ethical dilemmas involved in the case: There are several ethical dilemmas involved in the case of the food company violating food standards and selling rejected export products in the domestic market. These dilemmas include:
- Shareholder’s profit vs. Health of consumers: The food company faced a dilemma where it may have prioritised the profit of its shareholders over the health and well-being of consumers. By selling substandard and rejected products, the company compromised consumer safety, which goes against ethical principles of prioritising public health over financial gain.
- Long-term vs. short-term gain of shareholders: The company’s decision to sell substandard products may have resulted in short-term financial gains for shareholders. However, the long-term consequences, such as damage to the company’s reputation and loss of consumer trust, can lead to significant financial losses and a negative impact on the shareholders’ interests.
- Standard for domestic vs. international consumers: While the rejected products may not have met domestic standards, the company may have considered them safe enough to be sold domestically. However, by selling products that did not meet the approved standards, the company disregarded the importance of consistent quality and safety for all consumers.
- Law vs. public trust: This raises an ethical dilemma between complying with the law and maintaining public trust. By selling substandard and rejected products, the company eroded public trust in the food industry and created a trust deficit, which can have negative consequences for the industry as a whole
Conclusion:
- “Good corporate governance is about ‘intellectual honesty’ and not just sticking to rules and regulations.”-MervynKing.This case highlights the critical importance of corporate governance in ensuring ethical behaviour and maintaining the trust of stakeholders. Corporate governance refers to the systems, processes, and practices by which a company is directed and controlled.Effective corporate governance plays a vital role in preventing situations like the one faced by the food company, where violations of food standards and unethical practices occurred.
In case you still have your doubts, contact us on 9811333901.
For UPSC Prelims Resources, Click here
For Daily Updates and Study Material:
Join our Telegram Channel – Edukemy for IAS
- 1. Learn through Videos – here
- 2. Be Exam Ready by Practicing Daily MCQs – here
- 3. Daily Newsletter – Get all your Current Affairs Covered – here
- 4. Mains Answer Writing Practice – here
