The concept of ethically responsible business is evident from the historical writings of Socrates and Confucius, however during the end of 20th century, business ethics has gained wide-scale acknowledgement as an important component of academic and corporate domains. There has been an increased emphasis on managers in organizations making decisions that reflected moral values (Bradburn, 2001). Businesses in today’s era increasingly rely on corporate social responsibility to create a positive image in the target market, which ultimately helps the organization to gain a stronger position. This paper is based on the case of Ford Pinto, offering a summary of the case study. Moreover, three key ethical issues presented in the case have been identified.

Case Summary

The case discusses the fatalities that had occurred due to the fault in the fuel tank of Ford Pinto. The designing of the vehicle and significantly increased the risk of rupture of fuel tank and the vehicle being engulfed by flames. There have been different cases where the passengers have been critically injured due to the accident and succumbed to the burn related injuries. The case has specifically discussed the accident in 1978, which involved Lynn Marie Ulrich, Donna Ulrich and Judy Ann who died as a result of their car being hit from behind and the fuel tank bursting into flames. Another incident included in the case occurred in 1972, involving Richard Grimshaw who got 90% burns on his body due to the rear end collision and ruptured fuel tank which caught fire. The case has pointed out the issues that the management has faced during the production of Ford Pinto. Furthermore the dilemma of lowering cost and product features has been discussed, identifying the position taken by the management. [sky]

Ethical Issues

Ethical decision making involves analysis of the intensity of the ethical dilemma and making a judgment that appropriately addresses the ethical issue (Ferrell, Fraedrich, Ferrell, 2013). The case study illustrates that the decision making process adopted at Ford Motors reflected flawed judgment in terms of understanding of ethical and moral business responsibility. There are three key ethical issues that have been identified in the case.

Product Safety

The first ethical issue in the case is the lack of product safety. According to Shaw (2016), businesses have a core responsibility to ensure that the product they present to the market is safe for the consumers. Since managers in organizations are involved in the product development process, they have a greater degree of knowledge about product safety issues and they have ethical responsibility to resolve those issues. The management was aware of the flaws existing in the fuel tank design, however no remedial action has been taken to address the issue. The management has decided not to invest the $11 per fuel tank to being the needed improvement. The main emphasis of the management was on reducing the price of Pinto, which resulted in their decision to deliver a vehicle that was low cost, had a considerable trunk space, but carried high risk of injury and mortality due to faulty tank design. Moreover, the production time was reduced in order to effectively compete with the rival companies, which further compromised the safety of vehicles.

Lobbying for Organizational Gain

The second ethical issue identified in the case was the act of lobbying against the federal safety standards for vehicles for organizational gains (Trevino & Nelson, 2010). Different vehicle manufacturing firms including Ford have created pressure on National Highway Traffic Safety Administration (NHTSA) to review the safety standards. This lobbying has resulted in delayed approval and implementation of the safety guidelines. During this time Ford continued to product Pinto.

Cost-benefit Analysis of Human Life

Management at Ford has adopted the method of conducting cost benefit analysis to decide whether to invest in making changes in the fuel tank. The analysis reflected that adjustment to fuel tank were not a necessary step, therefore encouraging the management to pursue with the production of a high risk vehicle. Profit making took precedence over increasing product safety to protect human life (Weiss, 2014). Critics have raised concerns about the cost-benefit analysis implemented to the scenario as it didn’t take ethical responsibility into consideration (Trevino & Nelson, 2010).

References

Bradburn, R. (2001). Understanding business ethics. USA: South-Western Cengage Learning.
Ferrell, O. C., Fraedrich, J., Ferrell, L. (2013). Business ethics: Ethical decision making & cases. USA: South-Western Cengage Learning.
Shaw, W. (2016). Business ethics: A textbook with cases. USA: South-Western Cengage Learning.
Trevino, L. K., & Nelson, K. A. (2010). Managing business ethics. USA: John Wiley & Sons
Weiss, J. W. (2014). Business ethics: A stakeholder and issues management approach. USA: South-Western Cengage Learning.