Peugeot and the problem of product recalls.

B) Evaluate whether it would be in Peugeot’s best interest to spend money on contingency planning or improving the quality of its car.

        Peugeot can benefit from both improving the quality of its car and on contingency planning. The production of higher quality vehicles essentially means that they would be theoretically be less of a need to recall vehicles in the future. Not recalling any vehicles would essentially save the reputation of the company and improve customer’s trust and loyalty towards the firm. At the same time, building high quality vehicles doesn’t necessarily mean that it would prevent crisis such as fire or earthquake at its plants. This is where contingency planning is necessarily in order to prevent those unpredictable crises from happening. Contingency planning can benefit Peugeot in many different ways, and one of them would be the improvement of communication at the firm.  The improvement of effective communication needed during contingency planning between employers and employees helps enhance “productivity” which in turn would mean greater profits. Additionally, contingency planning also ensures the safety of employees and in turn the trust the employees has for the employers would mean greater motivation and ultimately greater profits.  Creating a contingency planning before hand would also mean that the negative effects of future crises like another recall would be limited and the company would also lose less “capital”. Contingency planning also has its disadvantages and the main one would be it needing a lot of capital that sometimes would be a waste if certain crises don’t occur. All in all, the benefits and flaws of both options means that  it would be a hard decision to choose only one in Peugeot’s best interest.