Question

A company in California sells a computer program to auto dealers showing that car buyers should finance their purchase rather than paying cash. The program omits the effect of income taxes and misstates the interest earned on savings over the load period. The finance option always provides a net benefit for the cash option. Company employees agree that the program does mislead buyers, but say the company will "provide what (car dealers) want as long as it is not against the law." Is this practice ethical? Is this practice socially responsible?

Answer 1

Unethical, but Legal

Step-by-step explanation:

An action will be deemed as legal if it is performed under the dictate of the law, that is it does not violate the laid down rules and regulations of the court. However, ethical behavior could be interpreted as actions showcased during interpersonal relationships which is usually characterized by fairness, openness, probity and other actions which are morally responsible.

In the scenario described above, the action of the California company in its sale of the computer program is not illegal as it pays in the long run to finance their purchase rather pay cash as advertised,, hence, there isn't an illegal act of lying in this contest. However, the company fails to be transparent enough by concealing the effect of income tax which they feel might put customers off. This action could be deemed as Unethical as probity and openness was not adequately showcased in their dealing with their customers.