Maruti Udyog Limited recalled nearly 60,000 cars over four months due to a problem with defective steering columns supplied by Sona Steering Limited. Sona Steering used alloy steel from Mukund Iron, but Mukund Iron provided an unstandardized product that did not meet the required chemical composition specification of SCM415. This caused the steering columns to bend during heat treatment, posing a safety risk. The problem was detected by an operator at Sona Steering who noticed the alloy was too soft. Maruti considered two alternatives to address the issue: replacing all defective parts at a cost of 3.82 crores, or meeting liability costs as accidents arise, estimated at 1.6 crores.

1. Largest Product Recall - MARUTI
Kasturika
Debojyoti
Abhishek
Sourav

2. Contents
• About Companies
• What was the problem?
• How was the problem detected?
• Cost-Benefit alternatives
• Theories
• Conclusion

4. Maruti Udyog Limited
• The largest car manufacturer in India.
• Recalled nearly 60,000 cars in four months
time
• Largest product recalls in indian automobile
industry

5. Sona Steering Limited
• The sub assembly system of Maruti Udyog Ltd
(MUL)
• Joint venture with MUL for gear system
• It consists of two engaged gears which helped
in transferring the rotary motion from the
steering column to the wheels.
• Failure of gears lead to fatal accidents.

6. Mukund Iron
• Located at Thane
• Supplier of hard alloy steel to Sona Steering
• Providing alloy steel to Sona steering on JIT
basis.

7. What was the problem ?
Mukund Iron
Conveyor belt
breakdown
Manual stacking of
raw materials Chemical composition
mismatch
Unstandardized product
instead of SCM415

8. Unstandardized
product
Sona Steering
Ineffective sampling
inspection
Supplied to MUL
Fitting of defective
steering column

9. How was it detected?
• Satinder Singh Rawat, an operator who had 4
years experience on the heat treatment
division- detected the problem
• The problem-
– The alloy was soft, got bent out of shape during
900 degree celcius heat treatment process

10. Alternative 1 replacing the parts Rs. In crores
Steering column change @Rs 450 P.C 2.70
Labour cost @Rs.150 P.C .90
Recall cost .10
Transport cost (defective parts) .12
Total 3.82
Alternative 2 meeting liabilities when they arise
Compensation cost (2 lacs each for 40 cars) .80
Compensastion for victims (2 lacs for each
40 cars)
.80
Total 1.60

11. Virtue Ethics
• Virtue ethics is a broad term for theories that
emphasize the role of character and virtue
in moral philosophy rather than either doing
one’s duty or acting in order to bring
about good consequences.
• A virtue ethicist is likely to give this kind of
moral advice: “Act as a virtuous person would
act in a situation.”

12. Virtue Ethics
• A virtuous person is someone who is kind across
many situations over a lifetime because that is her
character and not because she wants to maximize
utility or gain favours or simply do her duty.
• Unlike deontological and consequentialist theories,
theories of virtue ethics do not aim primarily to
identify universal principles that can be applied in
any moral situation.

13. Virtue Ethics
• And virtue ethics theories deal with wider
questions—
• “How should I live?”
• “What is the good life?” and
• “What are proper family and social values?”

14. Utilitarianism
• Bentham and J.S. Mill both criticized Kant.
They asked “do we really care what a persons
intentions are if we get hurt or benefit?”
Bentham said, for the most part, we focus on
the utility of actions.
• Utility: an act or thing has utility for a person
if it makes them happy or brings pleasure or
decreases pain.

15. Deontology
• The term deontology comes from the Greek Word
“deon” means “duty”. According to the
deontologist the rules and principles are crucial
for guiding human action. They believe that
ethical reasoning should concern activities that
are rationally motivated and apply universally to
all human action. Emphasis is given to intent of
the action.

16. Teleology
• The term teleology is derived from the Greek
word “telos” which means, “end” or “purpose”.
• The concept of end or purpose of the action.
• This is also called consequentialist theory.
– Which suggest that ethical reasoning concentrate on
the consequence of human action, and all actions
are evaluated in terms of the extent to which they
achieve desirable results.

17. THANK YOU