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“It is Just Not Enough”: The Tragedy of a Manufacturing Defect

John Monteleone, Tracy Couto
June 1, 2018
Latin & South America, North America
Strategy & General Management, Ethics & Social Justice
9 pages
Supply-chain management, corporate culture, ethics, family business, settlement
Student Price: 
$4.00 (€3.69)
Average rating: 

Victaulic Company (“Victaulic”) is a privately-owned, third generation, American family business. The company makes mechanical pipe-fittings especially for heating and cooling systems. A contracted overseas producer constructed one of their products, but without notice to Victaulic, substituted cheaper materials that had the potential to fail under pressure. One of the faulty products cracked while a heating system was being tested. As a result, a worker was severely burned and died several days later. Joe Savage, Vice President of Finance, was tasked to work with the insurance company to ensure a fair payment, which had previously attempted to minimize claims. Savage met the family and their lawyers in person to admit the company’s responsibility in the accident, apologize, and negotiate a fair payment. Afterwards, based on a recognition that the initial settlement was “just not enough,” the owners and management of the firm had to decide whether to give additional compensation.

Learning Outcomes: 
  • Articulate the dilemma faced by a business in the wake of an accident caused by its product.
  • Identify what ethical justifications are relevant to the decision-making process for a business in the wake of an accident caused by its product.
  • Develop an argument for or against relying on emotional intelligence as a leadership competency.
  • Critique the management team’s core leadership competencies during this crucible.