September 5, 2012
Product Liability Video
In the product liability video, there are many lessons for a potential new business owner. The video demonstrates the many shortfalls and potential law-suits that could follow if proper steps are not taken to protect the business and the employees of the business, from misunderstanding or intentional wrongdoing. Tony Harb, a renowned consultant, created a seven-step process to conduct internal audits within any business, small, medium, or large. The seven-steps include Management Commitment, Communication, and Consultation, Policies, and Procedures, Training, and Education, Effective, and Efficient Framework, RM is applied practice, and Ongoing monitoring, and review. The following paragraphs will demonstrate the seven-step Enterprise Risk Management process, outlined in the 7 Essential Elements of ERM and the role of Internal Audit by Tony Harb, using Non-Linear Pro’s violation of defective product in the product liability video. As defined by Tony Harb, Enterprise Risk Management is “People, systems and processes working together across the organisation to systematically think about and manage a wide range of risks that could impede achieving organisational objectives/opportunities” (Harb, 2008, p. 4).
Quick Takes Video purchased a video-editing product from Non-Linear Pro to enhance their video-editing capabilities. Non-Linear Pro advertisement led management from Quick Takes Video to believe that streamlining the product into their operations would take 24 to 48 hours and that it ultimately, would reduce their editing performance by 50%. Through Quick Takes Video purchase of the Non-Linear Pro video-editing product, Non-Linear Pro faces liability because of their violations in misrepresentation, defective product, defective design, negligence, and failure to warn.
The first-step of the ERM process is management commitment, in which Quick Takes Video would identify a systematic, decision-making process that would develop a framework to achieve success with limited risk. This framework incorporates input from management, down to the user, to ensure the development of a quantifiable vision that is supported throughout the process. Through Management Commitment, Quick Takes Video’s team would identify possible alternative products to compare and contrast to the video-editing product from Non-Linear Pro. Their team would develop an understanding of their internal needs, what capabilities will be needed, and identify limitations of the different products, such as defective product flaws. From the beginning, Quick Takes Video would establish a team-oriented approach that ensures the best interest of the company’s its future use of the product purchased.
The owner of Quick Takes Video agreed to a trial of the Non-Linear Pro editing system that included training the staff with manuals and a one-day course with a trainer. The staff moved forward with using the new editing system on a current project. Many man hours were exhausted in anticipation of completing some projects that were ongoing, only to realize that, the new equipment did not live up to the promises of the manufacturer in that the editing department was not up and running in a day and a half, nor did the editing department run twice as fast. In this instance alone, the cause of potential torts would include loss of productivity and any incurred expenses pertaining to the Non-Linear Pro product. To avoid this situation, the Quick Takes Video Company could have used Step two of the seven-step Enterprise Risk Management process, Communication and Consultation. A very important lesson learned by business owners is the value of acquiring good consultants on their team or at least accessible. In this case, if Quick Takes Video had a consultant team that would have done research and could clearly articulate what the Non-Linear Pro product