Introduction
Ethics in business are easily ignored by potential entrepreneurs as they often are faced by other issues and priorities while working towards bringing up new business ideas, marketing and considering financial matters. However, ethical behavior conducted by any business carries huge influence on its existence, operations and public image. They can create goodwill for any business in the market boosting its revenue promising a bright future. While on the other hand breaching or ignoring the same business ethics can do more harm and may lead to a market failure and company closure.
Ethics play an important role not only while initiating a business but also when it faces issues like that of defective products. The following report will highlight the role of ethical behavior in management of defective product by taking a real example of Breast Implant manufacturing company which had to dissolve following the product failure in the market. This report will discuss the chain of issues that led to the defects and will draw a contrast and a conclusion based upon how PIP behaved ethically in order to deal with such burning issues.
Background of the Company
Poly Implant Prothèse (PIP)
A French company started in 1991 that produced breast implants.
2000: Implant sales in USA halted by an FDA launched moratorium on silicone implants.
2001: PIP began to use unapproved in-house manufactured industrial-grade instead of medical grade silicon in the majority of its implants.
2003: the first signs of legal problems and financial losses can be traced by regulatory filings.
2009: Concerns surfaced in France first in 2009 when surgeons started reporting an abnormally high rupture rates. Resulting in a flood of legal complaints and hence bankruptcy.
2011: French officials say that an action plan is underway following the death of a woman from ALCL. The French government recommended 3 days after that 30,000 women in France seek removal of breast implants made of a suspect silicone gel by the worldwide exporting PIP firm.

What PIP has done?
PIP manufactured industrial silicone breast implant since 1996. It’s not the medical- grade material required for a human body; it’s the application for computer parts or the electronics equipment.
The filler and its casing are potentially caused rupture and leakage, its poison to the human/ animal body; it links to cancer even there is no clear evidence established yet.
For last decade, PIP has supplied this industrial silicone to the world –UK, United States, Spain, etc; there are around 400, 000 people, including 30, 000 French, have received this type of breast implant. The problem was only uncovered on 2010, and the company has been shut down by France authority subsequently and the chairman has been charged.

Consequence and public reaction
Today, there are hundreds of thousands people, mostly woman filed the complains; some government’s health policy has acknowledge this faulty treatment, and accepted the removal cost, such as UK government, but mostly applied to the removal surgery only, not for the reconstruction; some only accepted the removal cost to the clients initiated by medical reason but not for the one by cosmetic reason.
Now the question left is: Can these women are able to afford the removal cost?
The survey found that lots of these women aren’t able to afford it.
Lots woman are from low income group, they initially took a loan to do the implant; some are sole parent, they have no other resource to cover this extra expense; some woman’s circumstance have changed since the surgery: some lost their job, some make less income, some are separated or divorced.
These implants are like a time-bomb in their bodies, they do not know when it’s going to explode. These women constantly live in despair, anger, fear and misery.
This is the so- called “cosmetic plastic industry horror story”.
Why PIP did it?
Motivation: profit driven
By using the industrial silicone filler, PIP made extra profit £840m (Pound) per year for last 14 years.
What’s wrong with PIP?
It’s a complete failure business practice from the point of view of Carroll model.
Analysis as following:
Layer 1: Economic responsibility.
A corporation is deemed to be successful by constantly being profitable; even a company gain in short term but fail in a long term, it’s still a lost. * People can argue that one decade is long term; however, the company has been shut down and the chairman was charged with criminal conviction. Empire collapsed by one decision.
Layer 2: legal responsibility. * Company has the legal obligation to be fulfilled.
Law is the minimum requirement for the act of right and wrong. A corporation need to be in compliance with the law of national, supra-national; regulatory requirement of their own professional society.
PIP has basically failed all the legal requirement of above.
Layer 3: Ethical responsibility. * Act for the right, not the wrong; act for fair; * Avoid harm to others, community and society.
It’s beyond the legal requirement, it’s the moral conscience. * PIP betrayed the public trust:
As the third biggest manufacturer in the world, they knew the difference of the medical-grade and industrial grade silicone, and its potential harms to human body. To achieve the corporate short term goal: profit, PIP basically act for the money, and buried the corporate integrity in the sand.
Layer 4: Philanthropic responsibility. * This is the highest level of a corporate existence, the maximum reward a corporate can return to its society. * It gives the life meaning of a business’s: take it from the society and give it back to the people. * It’s about how to improve the quality of life of the community. * It’s about how to contribute to the people in a charitable way:
To support the education, to take care the vulnerable,
To help the poor, to assist the art.
Among these 4 layers analysis, PIP could only reached
Half of the basic layers: short term monetary return
Based on the failure of all the rest. So, PIP’s collapse
Was not a coincident but an inevitable event.
An old Chinese proverb: “the real gold is not fear of the test of fire and time.” – If it’s true and real.
How PIP could get away from it for so long?
We believe that the following are the reasons which PIP were able to take such a market share –third in the world in this field for more than a decade:
Lacking quality controlling proceeding: * French professional association lacking quality controlling proceeding; * France government’s authority lacking monitoring proceeding as an exporter; * The countries who imported it lacking appropriate quality controlling proceeding; * The local country plastic professionals lacking appreciate quality controlling proceeding.
Public false assumption : The more famous the brand, the better the quality.
Staff in the PIP lacking ethical and moral conscience: * Some of the key staff who benefited from the profit used the regulation roop hole to make faulty product; OR * It could be a collective action of the staff, from chairman, CEO, to production managers, finance manager, etc.
Woman themselves were partially to be blamed: * Some were not fully aware of the risk of cosmetic surgery , even the products / operation has been assurance by the medical professionals; * Some probably did aware of the risk but under the society pressure to being looking good , they were willing to take the risk.
All the above reasons offer a warm bed for these type of manufacturers to pursuit their maximum profit, and completely ignore the Regulatory and moral obligation to the public.
Conclusion –
In conclusion, we would like to say it was careless discussion of government and public to use this treatment. And even countries which allow them to come and use without any check which is really not caring about citizens in addition to this ethical awareness which lead to ethical judgment and result in the ethical action. As we mention earlier few government like United Kingdom was ready to give remove cost but not other countries. Finally we should not use and government should not allow any company which do not follow regulation and material safety data sheet (MSDS).

Reference:
Chrisafis, Angelique (2011). France's faulty breast implants scandal. Retrieved November 6, 2012 from http://www.guardian.co.uk/lifeandstyle/2011/dec/14/france-faulty-breast-implant-scandal