Premium Essay

Ford Pinto Case Review

In: Business and Management

Submitted By texas1331
Words 616
Pages 3
Case Review #1: Ford Pinto

1.) FACTS
• Ford was aware of gas tank defects on their Pinto model
• Ford ignored the safety concerns, positing “safety doesn’t sell” (p. 66)
• Ford based their decision off a cost-benefit analysis o Determined the “cost” of trunk alterations outweighed the “cost” of enhanced safety
• There were over 40 incidents involving Pinto passengers dying or being severely maimed

2.) ETHICAL ISSUES
• Is it morally right to sell a car with known, potentially fatal, defects?

3.) PARTIES
• Ford Motor Company
• Ford Management
• Ford Design Team
• Ford Quality Control
• Ford Pinto Drivers

4.) CONSEQUENCES
• Utilitarian Principle: Ford’s decision should have maximized the benefits and minimized the harm for consumers.
• The standard implicit in their decision was that since it was only a minority being injured, and they would reap a significant profit (with a majority of consumers being unaffected) their decision was permissible.
• Potential Consequences by party: o Ford Motor Company – potential public backlash/potential legal action/potential monetary penalties/potential loss of credibility with the public o Ford Management – potential loss of profits to rival manufacturers/potential jail time/potential loss of position/potential loss of credibility o Ford Design Team- potential job loss/potential compensation penalties/potential jail time o Ford Quality Control – potential loss of credibility/potential loss of jobs o Ford Pinto Drivers – potential loss of life/potential injuries or disabilities from vehicle operation
• It would appear that every obligation would UNDERMINE the decision to proceed forward with production of faulty vehicles

5.) OBLIGATIONS
• Kant’s “categorical imperative” would be applicable in this scenario
• The action here – allowing potentially fatal vehicles to put into production – would not...

Similar Documents

Premium Essay

Ford Pinto- Marketing Ethics

...Amy Bruney Marketing Ethics I. Introduction II. Literature Review III. Recommendations & Implications for Marketing Managers IV. Conclusion V. Sources INTRODUCTION “For seven years the Ford Motor Company sold cars in which it knew hundreds of people would needlessly burn to death.” Mark Dowie, Author of Pinto Madness (8) One of the biggest automotive news stories in the latter part of the 1970’s dealt with tales of exploding Ford Pintos and the considerable awards civil court juries were presenting to victims of accidents involving the cars. Ford produced the Pinto automobile from 1971 to 1980. Initially the car sold well, but a defect in the early models made Pintos prone to leaking fuel and catching on fire after relatively low-speed, rear-end collisions. The Pinto’s gas tank was located behind the rear axle. A rear-end collision of about 28 miles per hour or more would crush the car’s rear end, causing the tank to split and the filling pipe to break loose. It had been proven that spilled fuel and sparks from the crash caused fires that produced fatalities or serious burns. Was Ford aware of the potential problems in the framework of the Pinto? Was there an easy, inexpensive way to fix these problems? Was the Pinto fire controversy a lot of hype, or had Ford truly discounted human lives in order to save a few dollars? If Ford management really placed marketing considerations above safety, was that objective ethical...

Words: 1922 - Pages: 8

Premium Essay

Ford Motor Company Pinto Case

...Ford Motor Company Pinto Case Karen Nollet, Alonso Miller, Michael Morra, Pamela Tenori MGT/216 Abstract In 1971, Ford Motor Company (FMC), on the advice of then vice-president Lee Iacocca, introduced the first subcompact vehicle, the Ford Pinto. After production, Ford discovered a defect in the design on the fuel system; the gas tank was placed in the rear of the vehicle. This error could cause the vehicle to explode on low speed rear end collisions. Ford conducted a risk/analysis to determine whether to recall the vehicles or leave the situation as is and suffer the consequences as they arise. After concluding that the vehicles could be modified for $11 per vehicle, Ford decided not to recall the vehicles. Based on their risk/analysis the cost to recall the vehicles sold would be $137 million, Ford determined that it would be more profitable to leave the vehicles as is and pay out costs in lawsuits because this figure adjusted to $49.5 million, substantially lower than the cost to recall the product. Ethics and morals would appear to be ignored for profit and gain. Ford Motor Company Pinto Case Ford Motor Company Mission Statement (1996), “We are a global family with a proud heritage......

Words: 1118 - Pages: 5

Premium Essay

Ford

...Pinto Fires and Personal Ethics: A Script Analysis of Missed Opportunities Dennis A. Cioia ABSTRACT. This article details the personal involvement of the author in the early stages of the infamous Pinto fire case. The paper first presents an insider account of the context and decision environment within which he failed to initiate an early recall of defective vehicles. A cognitive script analysis of the personal experience is then offered as an explanation of factors that led to a decision that now is commonly seen as a definitive study in unethical corporate behavior. IThe main analytical thesis is that script schemas that were guiding cognition and action at the time pre.cluded consideration of issues in ethical terms because the scripts did not include ethical dimensions. In the summer of 1972 I made one of those important tran.sitions in life, the significance of vifhich becomes obvious only in retrospect. I left academe with a BS in Engineering Science and an MBA to enter the world of big business. I joined Ford Motor Company at World Headquarters in Dearborn Michigan, fulfilling a long-standing dream to work in the heart of the auto industry. I felt confident that I was in the right place at the right time to make a Dennis A. Gioia is Associate Professor of Organizational Behavior in the Department of Management and Organization, The Smeal College ofBusiness Administration, Pennsylvania State University. Professor Cioia's primary research and writing focus......

Words: 8142 - Pages: 33

Free Essay

Pinto

...THE PINTO CASE A SHORT SUMMARY In the early 1960s Ford’s market position was being heavily eroded by competition from domestic and foreign manufactures of subcompacts. Lee Iacocca, then President of Ford, was determined to regain Ford’s share of the market by having a new subcompact, the Pinto, in production by 1970. Then Ford engineers crash tested an early model of the Pinto. They found that when the automobile was struck from the rear at 20 miles per hour, the gas tank regularly ruptured. Stray sparks could then ignite the spraying gasoline, engulf the car in flames and possibly burn the trapped occupants. Nonetheless, Ford management decided for several reasons to go ahead with production of the Pinto as designed. First, the design met all applicable federal laws and standards then in effect. Secondly, the Pinto was comparable in safety to other cars being produced by the auto industry. Third, an internal Ford study indicated that the social costs of improving the design outweighed the social benefits. According to the study it was estimated that a maximum of 180 deaths might result if the Pinto design were not changed. For purposes of cost/benefit analysis the Federal government at that time put a value of $200,000 on a human life. Consequently, the study reasoned, saving 180 lives was worth about a total of $36 million to society. On the other hand, improving the 11 million Pintos then being planned would cost about $11 per car for a total investment of......

Words: 727 - Pages: 3

Premium Essay

Ford

...The Case of the Ford Pinto By James Abstract Product harm crisis can be defined as a sudden break in a product’s life cycle (Siomkos, G.J and Kurzbard. J. 1994). In 1971 the Ford Motor Company created a product harm crisis with the introduction of the Ford Pinto. The Ford Pinto is known to be one of the most dangerous vehicles ever produced in automotive history due to several serious design flaws. This paper will identify the factors that contributed to the product harm crisis, compare and contrast the findings of various studies on a product harm crisis and finally synthesis the research findings and provide a post mortem recommendation to the Ford Motor Company on how the Ford Pinto product crisis should have been handled. The Case of the Ford Pinto In 1968 the Ford Motor Company decided to market a vehicle that was small, inexpensive and would appeal to all car buyers. The Vice President of Ford Motor Company at the time was Lee Iacocca. Mr. Iacocca approved the plan for the Ford Pinto based on the parameters of the car weighing 2000 pounds and costing $2,000.00 dollars (Danley J. 2005). By placing these parameters on the car’s designers, they were limited from the beginning and ended up with a failed product. The key factors that contributed to the product crisis included the Ford Pinto being rushed to production in twenty five months, the timeframe to production causing designers and producers of the car to cut corners and......

Words: 979 - Pages: 4

Premium Essay

Corporate Responsibility and Society

...John Brevard M5990 – Corporate Responsibility & Society November 24, 2013 Week #5 Short Written Assignment Pinto Fires and Personal Ethics: A Script Analysis of Missed Opportunities by Dennis A. Gioia, is a sad article which focuses on the moral muteness of the author during his experience at the Ford Motor Company. However, before providing an analysis, several definitions are required: * Generalization Test – There must be a reason for an action and it should be consistent and based on one’s understanding of how the world works, with the assumption that everyone who has the same reason will act the same way. * Utilitarian Test - An action is ethical only if no other available action creates greater total net utility, i.e., there should be an ultimate end that might be called utility. * Virtue Test - Requires one to act in a way that is logically consistent with who they are in regards to their virtues and integrity. * Liberty Principle - Defined as a policy must result in the greatest basic liberty for everyone. It addresses autonomy. * Difference Principle - Defined as a policy must not create inequality unless it results in the greatest benefit for the least advantaged, applies to allocations of utility, e.g., a company’s wage scale. A “child of the 60’s”, Goiai seemed to have a strong value system that led him to question the perspectives and practices he observed in the world. A distaste of the Vietnam......

Words: 1505 - Pages: 7

Premium Essay

Ford Pinto

...The Ford Pinto Case In the late 1960’s Ford Motor Company wanted to produce a small model car to compete with small Japanese and German imports like Volkswagen, Datsun and Toyota (Danley). In 1969 Ford’s Board approved the plan to produce the Pinto. The CEO, Lee Iacocca, wanted a car that was low weight, under 2,000 pounds, and low cost, under $2,000. Lee “Iaccoca imposed the 2000/2000 rule, i.e., the Pinto could weigh no more than 2000 pounds and cost no more than $2000” (Danley). The engineers had about two years to design and manufacture a product. The 1971 Pinto went into production in 1970. The quick turnaround of the Ford Pinto was huge as the normal time frame to bring a new product to market was about three and a half years. Due to the quick design and production of the Ford Pinto, the car was not put through the normal tests until after production. When put through the rear-end test, it was determined to be below normal standards for cars of that size. For cars of this size, the standard was to place the fuel tank above the rear axle. However, Ford felt placing the gas tank above the rear axle didn’t leave enough trunk space. Therefore, the fuel tank on the Pinto was placed behind the rear axle, close to the back bumper. The design was such that if the car was impacted from the rear at 20 miles per hour or greater, a bolt would puncture the tank and possibly cause the car to erupt in flames. Ford Motor Company was determined to continuing......

Words: 1100 - Pages: 5

Premium Essay

Firestone Case Study

...Firestone Case Study Robert Workman Jessica Jurkowski Michael Wilding Webster University Firestone Case Study BACKGROUND In 1900 Harvey S. Firestone established The Firestone Tire and Rubber Company, the company started with 12 employees. They started out by supplying rubber tires for wagons and buggies. In the 1908 Henry Ford and Harvey Firestone formed a partnership with firestone supplying tires for the new model T this was a natural relationship because they had mutual friends. (Noggle and Palmer, 2005) Today Firestone is known as Bridgestone/Firestone after the two companies merged in 1990 for $2.6 billion. Today the company markets 8,000 different types and sizes of tires along with other products. Firestone has had a substantial history of scandals relating to tire safety In 1978 Firestone recalled 14.5 million tires—the largest tire recall at the time—after excess application of the adhesives binding the rubber and steel resulted in 500 tread separations and blowouts. The company was also fined $500,000 for concealing safety problems. ("e-businessethics.com") However in the late 90’s Firestone would be put into serious jeopardy and be threatened with going bankrupt. The Ford Motor Company was started by Henry Ford in 1903 in Dearborn, Michigan producing only a few cars a day. Ford was the first company to use assembly line production and has grown into one of the largest family run organizations in the world In 1999 Ford had a staff of 360,000......

Words: 3655 - Pages: 15

Premium Essay

New Product Development and Ethics

...Development (NDP) to Sustain-able New Product development (SNPD) The present review aims at being a summary of the main academic articles about project in-novation and the ethical considerations behind them. In 2007 Melissa S Baucus expressed her concern for the fact that creativity researchers rarely discuss ethics. Although the num-ber of companies with ethical considerations is increasing and many are considering words such as sustainability and respect to human rights to their values and mission statements, still they are rarely consider in day to day of business planning and Innovation, Creativity, Stage Gate Controls are words which remain with a weak connection to ethics. The lack of ethical considerations has led to the creation of scenarios such as Colombia where multinational companies are developing new systems in order to extract the gold and other minerals hidden under the Colombian soil. Engineering Mining techniques are achieving the immediate goal, extract the material but they are doing it ignoring the more basic ethical considerations and to the cost of destroying both communities and environment. My hypothesis is that we need to include ethical and humanistic criteria in the stagegate control for companies and governments involved in any kind of project and in particular on those that have a potentially high impact on vulnerable communities and environments. For In the 1070s The ford pinto was the perfect example of the successful development of a......

Words: 4549 - Pages: 19

Premium Essay

Ethical Breakdowns

...Failure Understand It Good people often let bad things happen. Why? by Max H. Bazerman and Ann E. Tenbrunsel Ethical Breakdowns 58 Harvard Business Review April 2011 ILLUSTRATION: DANIEL HOROWITZ HBR.ORG T THE VAST MAJORITY of managers mean to run ethical organizations, yet corporate corruption is widespread. Part of the problem, of course, is that some leaders are out-and-out crooks, and they direct the malfeasance from the top. But that is rare. Much more often, we believe, employees bend or break ethics rules because those in charge are blind to unethical behavior and may even unknowingly encourage it. Consider an infamous case that, when it broke, had all the earmarks of conscious top-down corruption. The Ford Pinto, a compact car produced during the 1970s, became notorious for its tendency in rear-end collisions to leak fuel and explode into flames. More than two dozen people were killed or injured in Pinto fires before the company issued a recall to correct the problem. Scrutiny of the decision process behind the model’s launch revealed that under intense competition from Volkswagen and other small-car manufacturers, Ford had rushed the Pinto into production. Engineers had discovered the potential danger of ruptured fuel tanks in preproduction crash tests, but the assembly line was ready to go, and the company’s leaders decided to proceed. Many saw the decision as evidence of the callousness, greed, and mendacity of Ford’s leaders—in short, their......

Words: 4773 - Pages: 20

Premium Essay

Mgt 216

...|[pic] |Syllabus | | |School of Business | | |MGT/216 Version 5 | | |Organizational Ethics and Social Responsibility | Copyright © 2010, 2009, 2008 by University of Phoenix. All rights reserved. Course Description This course provides a foundational perspective for socially responsible management practices in business. Special emphasis is placed on the inter-related nature of ethics, moral, legal, and social issues in managing individuals, groups, and the organization within a business environment. Policies Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents: • University policies: You must be logged into the student website to view this document. • Instructor policies: This document is posted in the Course Materials forum. University policies are subject to change. Be sure to read the policies at the beginning of each class. Policies may be slightly different depending on the modality in...

Words: 1628 - Pages: 7

Premium Essay

Dagger

...Theories) C. Focus on Integrity (Virtue Ethics) IV. Eight Steps to Sound Ethical Decision Making in Business A. Step One: Gather the Facts B. Step Two: Define the Ethical Issues C. Step Three: Identify the Affected Parties (the Stakeholders) D. Step Four: Identify the Consequences E. Step Five: Identify the Obligations F. Step Six: Consider Your Character and Integrity G. Step Seven: Think Creatively about Potential Actions H. Step Eight: Check Your Gut V. Practical Preventive Medicine A. Doing Your Homework B. When You’re Asked to Make a Snap Decision VI. Conclusion VII. Discussion Questions VIII. Exercise: Clarifying Your Values IX. Case: Pinto Fires Teaching Notes – Discussion Questions 1. If you had to choose just one of the philosophical approaches discussed in this chapter to guide your decision making, which would you choose? Why? Or, if you had to rank them from most to least helpful, how would you rank them? Probes to Stimulate Discussion "Think about your own ethical decision making. Do you already use any or all of these approaches? Separately or in combination?" "Consider looking into your religious background for guidance. For example, most religions...

Words: 4227 - Pages: 17

Premium Essay

Business Ethics

...Systems (MCS) because ethical principles can provide a useful guide for defining how employees should behave." [Management control-related ethical issues and analysis] It is important for an organization to have good ethics as unethical behaviors are costly not only to the individuals involved but also the organization, market and the society.' People learns from history,' each time a serious unethical issue arises, the government creates extra laws and standards for the governing of organizations, however these extra enforcements mechanisms "are incomplete, imperfect, and expensive, and have the typical drawbacks of rigid action controls." [Management control-related ethical issues and analysis] Business ethical issues arise because in most cases ethical actions may not generate the best outcome for an organization, "ethical individuals sometimes must make actions that are not in their own self-interest or their organizations owners' best interest." [Management control-related ethical issues and analysis] There are many dilemmas when making ethical decisions, often including the struggle between being selfish and doing 'what is right'. A culture will define the individual and group ethics within an organization. To control unethical behaviors and to set an ethical issue free environment within an organization, senior managers will need to have well developed ethical reasoning skills, managers need...

Words: 2445 - Pages: 10

Premium Essay

Conceptual Model of Corporate Moral Development

...A Conceptual Model of Corporate Moral Development Author(s): R. Eric Reidenbach and Donald P. Robin Source: Journal of Business Ethics, Vol. 10, No. 4 (Apr., 1991), pp. 273-284 Published by: Springer Stable URL: http://www.jstor.org/stable/25058230 . Accessed: 16/09/2013 07:44 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. . Springer is collaborating with JSTOR to digitize, preserve and extend access to Journal of Business Ethics. http://www.jstor.org This content downloaded from 202.125.103.33 on Mon, 16 Sep 2013 07:44:13 AM All use subject to JSTOR Terms and Conditions Conceptual Model Moral Development A of Corporate Donald R EricReidenbach P. Robin ABSTRACT: The conceptual model presented in this article argues that corporations exhibit specific behaviors that signal development. Accordingly, the authors identify five levels of moral development and discuss the that move corporations dynamics of corporate behavior another. Examples tive of of moral stages specific development from......

Words: 8320 - Pages: 34

Premium Essay

Business Ethics

...The Problem with Business Thesis: In many businesses today ethical decisions take a backseat to profit, I believe businesses should follow a set of ethical standards and not focus solely on profit for four reasons: (1) to have respect for human dignity, (2) private lives and business lives cannot be separated, (3) ethical decisions can lead to more profit, and (4) unethical decisions can lead to serious consequences for the people executing them. There are many decisions a business must make on a day-to-day basis. Many of these decisions will affect not only the business itself, but also every stakeholder in that business. Many times business will not take into account the number of people being affected. Businesses should not be so vital that they do not need to follow a set of ethical standards. Profit can be seen as the universal motivator for the majority of businesses today and focusing solely on profit can cause a business to lose its ethical standards. The loss of these standards can cause a trail of destruction caused by a business and cause it to lose a great amount of respect. There are countless examples of destruction caused by businesses like the BP oil spill or IBM supplying technology to Nazi Germany. There are four main reasons why ethical standards for businesses should be instilled. These are (1) to have respect for human dignity, (2) private lives and business lives cannot be separated, (3) ethical decisions can lead to more profit, and (4) unethical......

Words: 2524 - Pages: 11