Companies: Ethical Issues in Statistics - Research Paper Example

?Business Table of Contents Introduction 3 Issue in Automobile Industry 4 Theories in Ethics 5 Utilitarianism 5 Universalism 6 Justice 6 Rights 6 Natural Law 7 Issues in Automobile sector from the ethical perspective 7 Another ethical issue in automobile sector 9 Conclusion 11 Works Cited 12 Name of the Student: Name of the Professor: Course Number: Date of the Paper: Companies: Ethical Issues in Statistics Introduction Over the past hundred years, technological advancement in the automobile sector has brought revolutionary changes in the innovation, which led to more affordable, cleaner and safer vehicles than before. Now in this 21st century, the automobile industry is appearing to be in the grasp of revolutionary changes and this would not only lead to dramatically reshaping the ways in which the vehicles interact, but also restructuring the competitive landscape and the design of future cities and roads (KPMG LLP 4). With the rise in the innovative measures by the big players of the industry, the number of people killed in the road accidents are also raising. Records say that annually 1.2 million people die in the roads all over the world (Evans 1). The victims in these accidents are young and before this accident they were healthy and were expected to live a healthy life in normal health. The drivers are not the only victims, but in some cases the pedestrians are the victims too. The accidents that are occurring in the traffic are not just due to one factor but it is due to the participation of a large number of factors like individual users of road, players in the industry and the government. The whole situation gives rise to ethical issues, which is being highly ignored. In this study the focus is on the unethical means used by the automobile companies in highlighting the comfort that the car provides but not on the unsafe aspect. Issue in Automobile Industry Advertising takes an important place in the automobile industry. The advertising is done by the automobile companies in such a way that it encourages and glorifies the change in the behaviour of the drivers and thus leading to increase in the risk for all the road users. Moreover, the vehicle accessories that are being sold by the companies are not following any proven safety measures or standards. Apart from this, they are also engaged into advertising use of “safety equipment” but lack evidence regarding whether actually it enhances safety and will not increase chances of harming the individuals. Majority of the managers are finding various means to run the business in an ethical manner but still widespread corporate corruption exists. The main problem with this issue is that some of the leaders appear to be very unethical and they are seen to direct the whole system towards corruption from the top. But this situation is very rare; employees are often seen to break the ethical rules since they are blindly in charge of the unethical behaviour and encourage it unknowingly (Palomino and Delgado 147). In this context, the case of Ford Pinto is the most infamous one that stands as a strong example for top-down corruption. In the year 1970, Ford manufactured a compact car named Pinto, which became notorious for creating rear end collision that leads to leak fuel and eventually explodes into flames. Before the company recalled addressing the problem, the incident that happened with Pinto killed over two dozen people. An in-depth scrutiny of the whole event that were taking place behind the launch of this model revealed that Ford was rushing to the production of the Pinto car as a result of strong competition from Volkswagen and other small car manufacturers. During the pre production crash test the engineers discovered ruptured fuel tanks that was a potential threat to the car users, but since the assembly line of the organization was ready, so the higher management of the company decided to proceed with the production (Bazerman and Tenbrunsel “Ethical Breakdowns”). This case when examined critically appears to be an example of distortion in ethical decision making (Burns, Ferrell and Orrick 132). Theories in Ethics The word ethics has originated from the Greek word Ethos which signifies the fundamental orientation of a person towards life. Ethics is viewed as an overall concern for the human beings, based on scientific and theistic understanding of the world. There are five major theories of ethics that are of huge importance, namely utilitarianism, natural law, rights, universalism and justice. Utilitarianism The utilitarianism approach creates emphasis on the outcome of an individual’s action and not on the intent. The philosopher who supports this theory says that moral worth of an individual’s conduct can be evaluated from the results of that behaviour. A decision or act is considered to be right if the results brings benefits to the people and is wrong if it causes harm or damages to any individual. Therefore, the decision should be as such that they create highest amount of benefits for a large number of people and lowest degree of damage for least amount of people. The ideal in which utilitarian deals, can be best described by the phrase “the greatest good for the greatest number” (Helms and Hutchins 37). The best way of attaining this criterion is by conducting a social cost benefit analysis and performing according to that. The cost and benefits of an act should be analysed and if the result that is generated is positive then the act is morally accepted (Gert 120). Universalism This term refers to the obligation and duties of an individual. This theory says that the moral value of an action cannot be accessed through the outcome it produces, since outcomes are not definite and varies from time to time. Instead it should be accessed through the intentions of the person, who is involved in decision making. The first responsibility of universalism is to treat others as means but as ends. None of the actions are considered to be correct if it is not intended to worth the rights of other human beings (Helms and Hutchins 38; Anttonen 189). Justice The theory of justice was developed by John Rawl, whose initial position is to place the people behind the veil of ignorance and then the people are asked about what kind of society they want to live in, given in a situation where they are unaware of their potentialities and capabilities. Two principles of justice were proposed by Rawls; the first one says that each person has some basic rights, which is compatible to identical liberty of others. Secondly economic and social inequalities are arranged so that it provides advantage to everyone and attached to offices and positions opened to all (Helms and Hutchins 38; Rawls 3-17). Rights An individual as human being posses a large number of rights especially related to safety and life. The moral rights of a person are violated if any decision or act unnecessarily and unknowingly threatens or harms the life of the individual. Every person has the right to maintain privacy and control any type of dissemination of information related to the private life. This approach argues that of each and every right, there are corresponding responsibility and duties. The rights of an individual should not be violated; when these rights are seen to be denied, ethical violation occurs (Helms and Hutchins 38; Sperry 132-133). Natural Law Some of the Church philosophers and leaders like Thomas Jefferson and Thomas Aquinas believed that some eternal or natural laws are incorporated in the minds of God, which are apparent in nature and is applicable to any person. It has been emphasized by the religious leaders that the source of truth revealed is more than the reasoned nature. At the same time, it is also believed that the states of law are not changing and the duties and rights are obvious (Helms and Hutchins 39; Gunning and Holm 150). Issues in Automobile sector from the ethical perspective Ford Pinto was manufactured due to increasing competition from small compact car manufacturers. These manufacturers were occupying the market so fast that the management of Ford provided a shortest production plan schedule for Pinto. Tooling was done at the same time with the production; this lead to the issue when the defect in the fuel tank was detected, $200 million tooling machines was already developed so the production was not stopped. This direction was given from the top management that is President Lee Iacocca, who stressed on the fact that the weight of the car should not cross an ounce over 2,000 lb and should not cross the cost a cent over $2,000. For the management, the safety of the car was not important as they believe that safety does not sell. For eight long years, the automobile industry and Ford fought against the regulations of safety, by challenging various standards and finally agreed to conduct cost benefit analysis in which every cost of adding up a part that stops rupturing of gas tank in Pinto against the benefit that the firm will enjoy from the saving of injury and death settlement. In the year 1970, Ford introduced Pinto and soon gained a large share of the subcompact market. Civil lawsuits against Ford were raised after 1972 and criminal charges were brought; but the company won the case. In this case it is clear that the management was very well aware of the defects but they gave more importance to competition and comfort of the people rather than safety. If Ford would have followed the ethical theory in this case then such disastrous results could have been prevented. Some of the philosophers believed that in case of Pinto, Ford used utilitarian theory of ethics, in which they applied the social cost benefit analysis. In this analysis the organization found that the cost was outweighing the benefits, but error was committed while doing the calculation. It was estimated by Ford that there were 180 death cases and an equal number of burn cases but actually there were around 900 people who died (Helms and Hutchins 39). Moreover, the ratio of injuries to death as per the estimation of the experts was ten to one and not one to one. Apart from this, Ford claimed that they used $11 per unit cost for installing fire prevention device but originally they used only $5.08 crash-test proven rubber bladder device (Helms and Hutchins 39; Burns, Ferrell and Orrick 132). This suggests that the organization was providing wrong statistics for gaining the customers preference, which can be considered unethical (Leggett “The Ford Pinto Case: The Valuation of Life as it Applies to the Negligence-Efficiency Argument”). In the same case if Universalist theory of ethics is applied, then a case of categorical imperative test comes in. This would either pressurise the organization to manufacture and distribute the entire dangerous and defective automobile or asks Ford to correct all the defects related to the problem in the design. The ideals that universalism requires that all the people to be treated with respect and dignity; at the same time they should be seen as ends and not as a means. This theory would have prevented Ford from violating the right of every individual and putting them either unnecessarily or unknowingly in a life threatening and harmful position. If Ford would have applied the ethical theory of justice, then they would have evaluated whether their decisions are based on equity and fairness. Issues that are resolved using this ethical theory require fair treatment and equitable solution for the individuals. Apart from this, from the perspective of this theory, Ford would have been also responsible for accepting the blame for the defect in the design in Pinto, which was within their control and willing to pay fair compensation that were affected adversely by these defects. Instead of doing these, the organization fought back in the court against the safety regulations, families of the victims and the individual who was burned. Ford was incapable of returning what the injured or the dead person losses, so this act of Ford was considered to be extremely unethical. On the other hand Golden rules, which provides a link between the rights and the duties, if it would have been applied to the Ford Pinto case then, the organization would have either made their suppliers withhold the information or would have knowingly supplied them the defective equipments (Helms and Hutchins 39). Another ethical issue in automobile sector In the year 1959 General Motors manufactured Chevrolet Corvair. The primary requirement that the organization aimed to achieve during developing the product was that the product should sell well in the market and should reach the target return. The next objective of the organization was to manufacture light weight, small car that has fuel economy. The engineers decided that they should go with the rear drive and rear engine design. The swing axel rear suspension that was chosen for the car was mainly due to low cost constrain. The main hazard that lay with the car was that the rear wheel of the car was mounted on the control arm, which is pivoted and hinged on an axis at the inboard end of the arm that is placed near the centre of the vehicle. The design of the vehicle made the outside wheel to slip beneath on cornering that reduced the capacity of the wheels and exaggerated an over steering effect, which suddenly made the car go out of control and roll over. By 1965, there were over 100 lawsuits filed against the company that alleged Corvair to be instable. This compelled Chevrolet to change the design of the rear suspension. The theoretical testing and series of analysis were conducted and the data that were provided to the engineers of the Corvair well documented the limitations with the design of the vehicle. Though the company was very well aware of the problem yet they did not incorporate or implement any step until 1964 when the model was getting prepared to be introduced in the year 1965. If the organization would have conducted a social cost benefit analysis, they would have realised that the design of Corvair is defective and the automobile would be hazardous for the users. By applying the ethical theory of utilitarian, the result of the above finding would have generated a negative result, which indicated that the act of placing the defective product in the market for use is unethical. Again if the theory of universalism in applied in the same case then General Motor would have stopped the manufacturers of the car to rush the defective product to the market for selling them to the public, ignoring the obvious hazards related to the product. The Corvair case also showed indication that they failed to treat people with respect and dignity by not respective the life of the human beings. If General Motors would have considered the ethical theory of right, then they would have understood that they are violating the right of safety and life, which is the basic right of every individual. They have also violated the right of truthfulness by harming the users and placing them in a life threatening position. If the theory of justice is applied to this case, then General Motors would have not involved itself in the unfair treatment of the individuals by placing them into dangers and without notify them. Instead the company was involved in portraying the comfort of the car. Same violation gets highlighted when natural law applies to this case (Helms and Hutchins 40). Conclusion The two cases that have occurred in the automobile industry in the past are showing that the eminent player in this industry is more concerned about the features and comfort of the car. They believe that customers are drawn toward the product due to the attractive feature and not by the safety related to this product. The organizations are seen to unethically use statistics related to the features of the product and attracting the customers. In both the two cases discussed above both the two companies were aware of the unsafe aspect but still launched the products in the market. Works Cited Anttonen, Anneli. Welfare State, Universalism and Diversity. Massachusetts: Edward Elgar Publishing, 2012. Print. Bazerman, Max H. and Ann E. Tenbrunsel. Ethical Breakdowns. Harvard Business Publishing, 2011. Web. 9 Sep 2013. Burns, Ronald, Jeff Ferrell and Erin Orrick. “False Advertising, Suggestive Persuasion, and Automobile Safety: Assessing Advertising Practices in the Automobile Industry.” The Southwest Journal of Criminal Justice 2.2 (2005): 132-152. Print. Evans, Leonard. “Death in Traffic: Why Are the Ethical Issues Ignored?” Studies in Ethics, Law, and Technology 2.1 (2008): 1-11. Print. Gert, Bernard. Morality: Its Nature and Justification. Oxford: Oxford University Press, 1998. Print. Gunning, Jennifer and Soren Holm. Ethics, Law, and Society. Burlington: Ashgate Publishing, Ltd., 2007. Print. Helms, Marilyn M. and Betty A. Hutchins. “Quality Products: Is their Production Unethical?” Management Decision 30.5 (1992): 35-46. Print. KPMG LLP. “Self-driving cars: The next revolution”. 2012. PDF File. Leggett, Christopher. The Ford Pinto Case: The Valuation of Life as it Applies to the Negligence-Efficiency Argument. Wfu, 1999. Web. 10 Sep 2013. Palomino, Jorge Hernandez and Rodolfo Rincones Delgado. “Management Ethical Behaviour: The Automobile Industry in Juarez City.” Global Journal of Business Research 1.1 (2007): 147-156. Print. Rawls, John. A Theory of Justice. Cambridge: Harvard University Press, 2009. Print. Sperry, Len. Dictionary of Ethical and Legal Terms and Issues: The Essential Guide for Mental Health Professionals. New York: CRC Press, 2006. Print. . Read More