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The purpose of this paper is to examine whether Ford was to blame in the Pinto case. The paper will provide possible solutions and supporting statements. The paper also attempts to examine all external social pressures and to determine how external pressures affect individuals’ points of view. Lastly, the paper attempts to determine whether this issue would be viewed differently in today’s society.
In today’s society ethics 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 did the Ford business act 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 due to the cost benefit 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 that the National Highway Traffic Safety Administration (NHTSA) required them to do so. (Leggett, 1999) Should a risk benefit analysis be taken in consideration when a defect could possibly lead to serous injuries or death?
If this particular situation were unfolding in our midst, I could think of several things that could or should be done differently in order to resolve the problem. First of all, if the company was going to continue with a cost-benefit analysis in order to decide whether or not to modify the fuel system they should have made sure that their calculations were accurate, if this were the case they may have realized that the benefits of making the fuel system safer by adding a $1 baffle were more solidly justified. For example, when Ford performed its cost benefit analysis on the Pinto, they figured in an equal amount of fire related deaths and injuries as listed below:
Benefits
Savings: 180 burn deaths, 180 serious burn injuries, 2,100 burned vehicles.
Unit cost: $200,000 per death, $67,000 per injury, $700 per vehicle.
Total benefit: 180 × ($200,000) + 180 × ($67,000) + 2,100 × ($700) = $49.5 million.
Costs
Sales: 11 million cars, 1.5 million light trucks.
Unit cost: $11 per car, $11 per truck.
Total cost: 11,000,000 × ($11) + 1,500,000 × ($11) = $137 million.
From Ford Motor Company internal memorandum: “Fatalities Associated with Crash-Induced Fuel Leakage and Fires.” (Newton & Ford, 2008, p. 301)
The statistics revealed that there were several injuries to each death. According to the Northern California Burn Center, the estimated ratio of burn injuries was 10 to one instead of the one to one that the Ford Company used in their calculations. (Newton & Ford, 2008)
Some of the engineers that realized the fire risk of the fuel system didn’t even try to report it to executives because they knew that a one-dollar part added weight and cost to the Pinto and could cause it to go over the threshold of 2,000 lbs and $2,000, both stipulations put in place by production ringmaster Lee Iacocca. (DeGeorge, 2006)
The biggest change that I would make if I were involved in this situation is that I would have been adamant and vocal about the dangers posed by the vehicle right from the start. I would have pushed for the next round of Pinto models released in 1972 to have a safer modified fuel system instead of letting the problem go on for the better of seven model years unfettered. This would have drastically cut down on the amount of burn deaths experienced by unknowing Pinto owners.
The other thing that Ford could have done right away is warn it’s customers of the risk that they were taking. Once it was known that the gas tank posed a risk the information should have been shared with the public. While this gaff would have temporary monetary setbacks, it would have bolstered Ford’s reputation as a reliable company ensuring future profits. Instead the Pinto case was the cause of years of bad publicity for Ford because of their negligence of human life.
The Ford Motor Company encountered many external social pressures, which influenced their decision in the Ford Pinto case. These social pressures include: increased risk of litigation and lawsuits, reduction in sales, and the chance of Ford’s reputation being destroyed. The Ford Corporation knew that the Pinto was dangerous. If the corporation continued to manufacture the vehicle there was a risk of multiple lawsuits and litigation evolving. The corporation did a cost-benefit analysis to determine how many people were likely to be killed, and how this would affect the corporation monetarily. The cost-benefit analysis would estimate the cost the company would be assessed with if a certain percentage of the deceased persons’ families successfully sued the company (DeGeorge, 2006, pp. 298-299). The corporation chose to cut their losses and stop manufacturing the Pinto. Even if the problem was corrected, the dangers of the Ford Pinto had already come to surface, which had destroyed the reputation of the product and led to a reduction in sales. The general public would not invest money into a product that once had a high risk of danger even if a total renovation was made and all risk factors were eliminated. Ford Motor Company would have better luck at cutting their losses and investing their money into a safer product.
Viewing this case with a period eye, the decisions that would be made today, are not the same decisions that were made in 1971. In 1971, unlike today, there was not a true sense of ethical and moral responsibility by corporate America. Until, about 20 years ago, so little was known about the topic of organizational ethics. With rare exceptions, knowledge was limited to a few surveys saying that ethics is a problem in organizations. Since the classic studies of business ethics conducted in the 1960s and 1970s, managers have repeatedly reported their own skepticism regarding organizational ethics. (Treviño & Nelson, (2007) Times have since changed and today a person’s career can be damaged if an ethical issue is mishandled.
The decisions made by Ford to proceed with the production of the Pinto even with the knowledge of the potential of injury or even death that could result from not spending an additional dollar in production costs would not be made today. The demand of society for safety and quality that exists today would prevent that same decision to be made in 2009. Ford waited eight years to change the design of the Pinto because of their internal “cost-benefit analysis,” which places a dollar value on human life, said it wasn’t profitable to make the changes sooner. (Treviño & Nelson) If Ford were under ethical scrutiny as current organizations embark on today, up to 900 lives would have been saved.
The additional decision of Ford to not forewarn the consumer of the potential danger would also not occur today. Today’s corporate America would communicate potential risks and recall the product if it were identified that an issue existed. In 2009, unlike in 1971, Ford would recognize that the costs associated with a recall are far less than the costs associated with deaths and injuries. The costs that were not taken into consideration in 1971 were not just monetary, but image related as well. In 2009, corporations are keenly aware of how they are perceived in the eye of the consumer. The jury declared Ford not guilty and although Ford Motor Company obeyed the law, the law wasn’t as it should have been. When it comes to protecting the consumer, everyone involved should be held accountable for the safety and protection of a human life. Nowadays an organization would never get away with the type of ethical behavior Ford displayed in 1971 due to the knowledge known in business ethics today.
The fact is business ethics has evolved from generation to generation. For an individual to decide if Fords actions were unethical, the current society standards must be taken in consideration. In that time frame business ethics was foreign to society and was not practised as in today businesses. We believe that profit or other benefits should be irrelevant the choice should always be to avoid human injuries or possible deaths at all costs.
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
Newton, L.H., & Ford, M.M. (2008). Taking sides: Clashing views in business ethics and society (10th ed.). Retrieved from https://ecampus.phoenix.edu/content/eBookLibrary2.
DeGeorge, R.T. (2006). Business ethics (6th ed.). Retrieved from https://ecampus.phoenix.edu/content/eBookLibrary2.
Klebe Treviño, L & Nelson, K. (2007), Managing Business Ethics. Straight Talk About How To Do It Right, (4th ed.). John Wiley & Sons.
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