Ford Pinto Case Study and Business Ethics Values

The purpose of this paper will be to determine whether Ford was to blame in the Ford Pinto Case. This paper will provide possible solutions as well as supporting statements. This paper will examine all external social pressures and determine how external pressures affect individuals’ points of view. Further, this paper will discuss how the issue would be viewed differently in today’s society. In today’s society ethical issues are under heavy scrutiny. To examine this case thoroughly, the time and social norms of the time must be taken into consideration.

The big question with the case is whether or not the Ford business acted ethically when designing the Pinto’s fuel system. The case was put under a microscope and analyzed because the company did not upgrade the integrity of the system until 1978 because of the cost benefits analysis. In determining whether or not to make the production change, the Ford Motor Company defended itself by contending that it used a risk/benefit analysis. Ford stated that its reason for using a risk/benefit analysis was due to the fact that the National Highway Traffic Safety Administration (NHTSA) required them to do so (Leggett, 1999).

Business people should not forget that they have a social responsibility as well as a responsibility of maintaining business ethics. If faced with an ethical dilemma similar to that in the Pinto case, it would be important to consider the factors and remind management that it is unethical to knowingly market a car with unsafe parts to the public (De George, 2006). Taking the time to put in a bit more money to make a quality product is more important than building a car that will eventually be recalled and decline in future profits.

Quality and safety are on the minds of consumers when purchasing a car. When the cars are made of good quality, it shows the consumers that the values and ethics of a company are solid and that the company puts pride in their work. This ensures that there develops a trust between consumer and company, and possibly a long relationship between the two. If these observations do not convince management, it should be suggested to publish a warning on the risks associated with the Pinto and/or issue a recall. The last option would force management to take

another look into investing more in their cars. If management declines the request to inform the public then the ethical decision would be to “blow the whistle”. Safety should be the first concern. Putting oneself behind the wheel with family would make that decision easy. Any information would be distributed anonymously and made known in all forms of media to the public (Nadler & Schulman, 2006). The social pressures that Ford Motor Company faced were: decline in sales, increased risk of litigation and lawsuits, and their reputation being slandered.

The Ford Corporation knew from the beginning that the Pinto was dangerous. If the corporation continued to manufacture the Pinto they knew there was a risk of many lawsuits (class action) and litigation on the horizon. The corporation conducted a cost-benefit analysis to determine how many deaths would occur and how it would impact the company financially. The cost-benefit analysis would determine the cost the company would be responsible for if a certain percentage of the deceased persons’ families sued the company and won (DeGeorge, 2006).

It was in the best interest of the company to cut their losses and stop manufacturing the Pinto because the issues became public. Their reputation was tarnished, despite the fact that they corrected the problems. This lead to a reduction in sales/profits since the consumers wouldn’t invest in the Pinto due to prior issues. Consumers didn’t care that they corrected the issues. The best option for Ford is to invest in a safer and better product and cut their losses. During the 1970s it should have been obvious to Ford that the general public was not favorable to them ignoring the problems concerning the fuel tank.

Even though they reasoned it out of their calculations by using a risk/benefit analysis, safety was a factor to buyers even back then. The same approach mentioned above could have been used back then as well. Step one would have been encouraging management to make the right decision. Ford should have decided to not produce additional cars with the issue. Publishing a warning to all purchasers of the (impaired) car should also have occurred, along with an offer of updating the fuel tank with the appropriate parts free of charge.

If management declined to do any of these then blowing the whistle would be best. As indicated before, one just has to put themselves in the driver’s seat along with their family to understand the importance of correcting the problem. You truly cannot put a price on a human being, no matter how hard you try. Essentially, ethics and morals are nearly bound at the same hand. A vehicle, knowingly defective, can be sold day in and day out for personal and corporate gain. Ethics plays its part when the entire corporation is knowingly and encouraging these actions.

A re-call on a vehicle is not the fault of the salesman selling the car in Wheeler, TX. It is the right and duty of the auto-maker to let the salesman in Wheeler, TX aware of the defaults in the vehicle in order for that salesman to inform his customers of the automobile that they are prepared to purchase. THIS is an ethical violation! It becomes an ethical question, when the Corporates encourage the sales of these ill-made vehicles simply in order to meet they’re bottom line. (Toyota).

It is fascinating that when we speak of ethics that we never speak of values. The CEO’s, COO’s CFO’s have no values in these instances; therefore they have no morals or ethics. Rarely do we see the head of a Fortune 500 Company come out publicly and admit that they had no ethics going into this project. Ethics has gone by the waste-side in recent years and the corporations are not the only ones to blame. These employees of they’re rightful companies have literally forced most of there employees to, so called, “play ball” for sales, benefits and bonuses. No matter what the cost or expense to the consumer. Many believe that ethics still lives and breathes in our corporate world, but until there are morals and honesty, the American people are simply done buying what they are selling!

References

  • De George, R. (2006). Chapter 12 Whistle blowing. “Business Ethics”, 6thed. New Jersey: Prentice Hall
  • Leggett, C. (1999). Life as it applies to the Negligence-Efficiency. Retrieved from http://www. wfu. edu/~palmitar/Law&Valuation/Papers/1999/Leggett-pinto. html on February 9, 2011