Corporate Obligations and Responsibilities: The Ford Pinto - Essay Example

Case study: The Ford Pinto Most businesses acknowledge the importance of valuing the s because the s arethe main determinants of how the company performs in its line of business. This is because the customers provide the market that businesses fight for through competition and advancement of technology. In this regard, when developing products, most companies ensure that the main area of the agenda is the health or the safety of the customers. This is because regardless of the pricing of a product, the customers would use it if the manufacturer has made sure that the product ensures optimal wellbeing of the user. Ensuring that the products are of high quality is important mostly for the manufacturing company. This is because the company is able to increase its market share and get return customers. Good and high quality products that especially guarantee the well-being of the customer are very attractive in the market and subsequently lead to an increase market share and more profitability. Additionally, this also ensures that the company becomes socially responsible if it ensures that all it does is directed towards a healthier and a safer society. Ethical businesses are usually the most profitable and the best companies with regard to customer rating and preference. However, the opposite is true. If the customers sport numerous flaws in products, they tend to avoid it and look for alternatives in the competitors. This provides a competitive advantage for the competitors and functions as one of the numerous ways of losing customers to the competitors. This issue becomes worse when the flaws spotted are not rectified and when they are life threatening. The Ford Pinto case showed the existence of unethical behavior on the side of the company. A cost benefit analysis is usually applied to determine how well an intended action would benefit the organization or lead to loss in the company. It is mainly used to weigh two sides of an issue and to determine the most appropriate action. This implies that cost benefit analysis is a step in decision making where and organization picks the most profitable action with regard to financial outcomes. Although it can be used in most instances, it should not be applied when weighing between lives and profit because it is not ethical and not a practice that shows corporate social responsibility. It is not ethical for any company to perform a cost benefit analysis especially when lives are involved in the case, in the way that Ford did. This shows that the company is not concerned about the safety of the customers but the money that they contribute through purchasing the flawed products. When lives are involved, all companies should ensure that any analysis that they do is safety or customer oriented. This is to ensure the well-being of the company and the customers. The cost benefit analysis that Ford did was despicable because the company was simply weighing human lives and money while preferring money. The case gets worse when the company concluded that it would benefit more through settling court disputes and compensating deaths and injuries than it would benefit when rectifying the flaws that are in their products. In the case of Ford, the issue becomes worse because the company was aware of the flaws existing in the products that they themselves had developed. Although the company won court cases related to the flaws and settled others, the company was highly unethical in the overall process of production of the vehicles with flaws. This should have warranted for arrest and prosecution on all individuals involved in the production of the products because they brought unsafe vehicles in the market knowingly. The company watched people die on the roads while using the flawed vehicles where Ford took advantage of the idea that there were no strict federal laws governing vehicle production during the time. However, the company should have set its own organization-based standards to be met to ensure that the customers are safe when using the products. This would have improved the reputation of the company although the flawed vehicles were the bestselling in U.S during the 1960s (Hoffman 222-223). It is worth noting that cost benefit analysis is projected towards the welfare of an organization financially and can be applied in many instances except when lives are not being favored by the analysis. In the day-to-day activities of the contemporary world, cost benefit analysis is also done frequently. The modern world undertakes cost benefit analysis when they are favoring saving of lives. For instance, overpasses are built to ensure that the rail crossings are as safe as possible because the opposite would bring fatal collisions. In the areas that the rail crossings are not built as overpasses, there are occasional occurrences of accidents that would be prevented by ensuring that the rail line is as far as possible from vehicle traffic. This move is costly. However, most countries and companies have reached it after performing a conclusive cost benefit analysis, which was very different from one that Ford did. While Ford was looking to maximize profits, the cost benefit analysis done when building overpasses is directed towards minimization of collisions and deaths by as much as possible. This implies that when building these overpasses, the involved parties prefer a small benefit margin to more profit and more deaths. Under contrary, Ford preferred more profit regardless of the number of deaths. This is because if the rail line were built on the same level as the roads, it would be more advantageous for the concerned companies because they would avoid incurring more expenses when trying to make the area safer. In addition, maintenance cost would also be low and easier to manage. Under contrary, the overpass requires huge investment on the side of the rail company. However, this form of investment is life and safety oriented. The companies reached a conclusion that it would be easier to eliminate the risks and ensure that the roads around the rail lines are safer since this way, it would be easier to avoid court cases and compensation claims. In contrast, Ford reached a conclusion that it would be easier and more advantages financially if they avoided the rectification expense, which was determined to be as low as $5.08 per vehicle and incur compensations on deaths and injuries, which according to the analysis would be lower. Therefore, the main difference between the rail companies that build overpasses and the Ford’s idea is that Ford was profit oriented regardless of the risk involved while the rail companies are safety oriented regardless of the cost. According to the Ford Pinto case, the public was not informed concerning the dangers that they got themselves into when they purchased these cars. This is one of the reasons why the car remained a bestseller in the U.S for a long period in spite of the flaws. The competition in the motor vehicle industry was one of the reasons why Ford chose not to notify the public concerning the safety risks involved in using the flawed vehicles. In addition, since there were too many vehicles in public use having the same flaws, the company may have concluded that they would lose the trust of the public or incur loses if all those vehicles would be recalled. If the public had been notified of the risks involved, approximately 500 deaths that occurred as a result of burns would have been avoided to a significant extent although this would have been to the disadvantage of the company due to minor financial disaster (Hoffman 222). It would be appropriate to state that the company did not value the live of the customers to the point of deliberately putting them in harm’s way. In addition, if the public was given the information concerning the flaws they would have asked for a solution from the company, which would have been install either a $5.08 bladder or even replacing the entire fuel tank with a better version, which was available but would have incurred the company $11 (Hoffman 225). If the public were given the information, the possibility of Ford losing its market would have been reduced by convincing the public of rectification that would have cost them $5. Knowing the seriousness of the case, the public would have paid for the rectifications themselves to ensure that they have better chances of surviving a crash if it happens. Instead, the company denied them the right to choose their own safety and left them in the looming danger of death by fire knowingly. This has been termed as an irresponsible action, which is true. Moreover, instead of letting the public know about the looming danger, Ford kept on denying being responsible for many deaths by claiming that Pinto was only responsible for 1.9% of the total deaths resulting from fuel tank rapture in 1976 (Hoffman 223). Therefore, Ford denied the public the right to know the dangers that were involved in using the Pinto although they knew about the issue before the manufacturing process began. It could not have been possible, under any circumstance, that the upper management did not understand the seriousness of the engineering issues involved when manufacturing the Pinto. This is because the officials had prior information regarding the flaws that would be present when the manufacturing of these vehicles commenced as well as the legal issues that would be involved if the Pinto went in to the market. This is because the engineers working on Pinto’s pre-production tests found the flaws that would affect the Pinto and notified the officials. However, since the officials had already tooled the company with the requirements for building the cars, they decided to carry on with the project fully aware of the problems they would create if the vehicle got to the market. The company was even aware of the fact that it was in possession of a patent that could have enabled the development of a much safer and better gas tank. This implies that it would be out of question to claim that Lee Lacocca was not aware of the issues facing his latest project. It would be safe to state that the company valued money more than human lives because they knew well before the vehicles were built. Therefore, the company would have opted to improve the safety of the vehicles or abandon the project of they felt that it would be too expensive for them instead of jeopardizing the lives of millions of customers. The company knowingly and recklessly chose profits over safety in design. This is because despite having prior information regarding the flaws, Ford only decided to do minor alterations eight years after the model was first made available in the market. The alterations took very long because of the cost benefit analysis that the company was using to make life-altering decisions. Although it may be argued that Lee Lacocca’s technical background was wanting there were many occurrences that could have alerted him on the need for modifications on Pinto. First, the engineers found the flaw early enough and alerted the officials on the technical part of the issue but later decided to carry on. Second, Lee would not have ventured into this business if he were incompetent; therefore, he understood every detail to the letter. Lastly, when the occurrence of deaths started happening, he could have realized the mistakes that he did and warrant a modification but instead continued producing the vehicles in their millions and flooding the market with flawed products. However, no one in the company took further step knowing the danger that they had taken to the market. If I were an engineer at Ford and discovered the problem with the gas tanks, I would first discuss it with the manager giving them all technical information regarding the problem to see the step that they would take. I would also try suggesting possible solutions to them. If the manager turned my concern down, I would result in bigger alternatives that would ensure that the public is aware of the looming danger. Since the company showed that they value money more than they value human lives, I would do the exact opposite; show them that I value human lives more than I do my employment. Since the engineers knew of the flaws when building the Pinto, the fatalities that were realized would be blamed on both the engineers and the officials. This implies that the entire organization would be blamed for the problem. The first step that I would take would involve suing the company. Although this would not be an easy step to undertake, it would be the easiest step for acquiring the public’s attention before they start buying the killer vehicles. There is a high possibility that the company would deny having initialized the project but being an engineer, I would have adequate information to prove otherwise. This would ensure that the public is aware of the issue facing the Pinto and would be very careful when buying the vehicle. It would also be effective in pushing the company to implement the required rectifications early enough. Although I would most probably lose my job for going against my boss, I would have a higher possibility of acquiring a job with another company for standing against malpractice and upholding ethical practices in business. In addition, competitor companies would also be eager to get the expertise that an engineer in the best-selling company would bring to them to help in acquiring a competitive advantage against Ford. Therefore, the publicity that would result from the case would be advantageous to the public in the form of safer products and to me in securing a job elsewhere if I would be dismissed. This would force Ford to acknowledge the existence of a higher obligation besides fulfilling all legal requirements. In spite of the fact that Ford observed all safety legal requirements of the time, which is the strongest defense they used to win cases, the company has a higher obligation. This obligation involves saving lives through production of high quality products. Although the government did not have strict rules governing the production of vehicles, it is an ethical responsibility of the manufacturers to ensure that the products are safe for use by the public. This should be a moral obligation that a manufacturer should heed to without waiting for the law to pass legislations. It is also morally right to do the right thing. Besides being moral, it is good to ensure that the consumers who are responsible for creating a market for a company are safe when using the products. On the other hand, it is of serious concern that Ford was continuously lobbying the government to delay in imposing strict laws that would ensure the safety of the public. The most logical explanation for this behavior by Ford is that the company did not want to commit more resources in improving the quality of their product, which would have been reflected as a reduction in profit. In addition, this could also have increased the cost of the vehicles making the Pinto less attractive in the market. This is one thing that Ford did not want to see happen, because they wanted to continue holding the wider portion of the market share, which unfortunately, they were able to hold by production of unsafe vehicles. Therefore, lobbying in favor of less strict laws is a serious safety concern that the company managed to take advantage of so as to have their flawed vehicles in the market. Ford continued to defend itself stating that it was being asked to meet future standards. However, the company acknowledged that their vehicles were flawed and only responsible for approximately 1.9% of the overall deaths related to gas tank rapture (Hoffman 223). While this might be debatable, Ford did not make any effort to reduce the 1.9% deaths. The company would have been more attractive in the market if safety standards were its main concern. In spite of the strictness of the existing laws, any company should be morally responsible and should accept responsibility of anything that may happen when their products are in use especially anything related to flaws. Any profession should ensure that it implements ethical obligations for itself even though there are governmental regulations. This would be advantageous for the profession mostly in the eyes of the customers. This is because it is considerably difficult to attract customers and to acquire their trust but significantly easy to lose them. Losing customers becomes easy especially when the concerned profession or company is not taking safety and other important measures into consideration. In most instances, the law does not cover all the issues that should be addressed in many professions. Taking this into considerations, different professionals should be ethical in the ways that they do business. This is both for the good of the company with regard to high possibility of expansion and for the good of the customers who trust their favorite companies to provide highly efficient and secure products. In determining the ethical obligations that businesses should develop, these businesses should ensure that they consider the customer’s feedback concerning the performance of their products because all products are not perfect as there are chances for further improvements to meet growing demands and shifting consumer preferences. Therefore, although all professions should first ensure that governmental regulations are implemented as required by the law, they should also ensure that additional ethical obligations are included in the agenda. It is also humane to feel responsible for another individual’s wellbeing, which reflects much about being ethical and minding others. Moreover, this should also be facilitated mainly because engineers and manufacturers have certain ethical responsibilities that concern the safety of the public. These responsibilities are more stringent than most legal obligations. In addition, the contemporary world has experienced rapid changes leading to technical complexities of most issues in most professions. This implies that the public cannot be fully supported through the explicit laws alone. This is because laws are not always current bearing in mind that technology has been changing rapidly. Therefore, it is not easy for governments to keep laws current in that they would provide up to date information concerning relevant situations. This implies that development of more stringent ethical obligations as compared to laws is essential. Enforcing the ethical obligations would require stages. The first stage would involve ensuring that all employees in the organization are aware of the existence of the laws and that they are willing to follow them for the greater good. The second step would involve asking for suggestions concerning the obligations after which the implementation process would begin through gradual integration in the organization’s agenda. This would ensure that all parts of the obligations are implemented in their entirety and that all individuals adjust accordingly towards the favor of the new obligations. In conclusion, although most businesses follow laws and regulations so that they can increase their profits and sales volumes, these companies should be ethically responsible for the well-being of their customers. While being ethical could eliminate court cases and lack of loyalty from the customers, all professions should ensure that, their activities are considering the interests of the market or the customers. Although the customers may not know the exact manufacturing procedures taken when the products that they use were being made, they trust that the manufacturers took the necessary precautions such as testing to ensure that the highest standards were met. Companies should not prefer making profits to saving lives when undertaking their cost benefit analysis. This is because of the moral responsibility of taking care of the customer’s wellbeing because it is easier to lose customers than to gain them. Works Cited Hoffman, Michael. “Case Study: The Ford Pinto”. Corporate Obligations and Responsibilities: Everything Old is new Again. 1.1 (1985): 222-229. Print. Read More

 

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