Business Ethics - Safety Versus Cost - Case Study Example

Business Ethics 1. Safety versus cost is the main moral issue which features prominently in the Ford and Pinto case study. Ford chose to fend off stiff competition posed by foreign automakers, especially from Japan, by making a fairly affordable Pinto model lacking appropriate fuel tank safety (Shaw, 2010). This, from a business point of view was aimed at securing Ford’s continued survival in the domestic market. The company’s decision to keep the cost of the car model at its low was basically premised upon the fact that foreign-made pieces were retailing at equally low prices, and any attempt to adjust the cost of the model upwards for safety reasons would have yielded unfavorable results. Additionally, informing the customers about the risky fuel tank versus keeping the issue under wraps is also another moral issue which had the potential of winning the trust of customers and spelling doom for the then Ford’s newest car model. 2. If Ford officials were asked to justify their decision of making unsafe fuel tanks, they would have defended their actions as follows: firstly, they would cite the principle of fidelity in their effort to keep the weight and cost of the Pinto car at 2,000lb and $2,000 respectively. A remodel of the fuel tank would mean an upward adjustment of cost and weight of the car. Secondly, the principle of autonomy would work in their favor. This is especially true because their decision was made from an informed, independent business point of view (Shaw, 2010). Thirdly, they would have cited the principle of beneficence as defense for their continued survival in the US auto industry in their effort to offer affordable cars to millions of locals with lower income. Lastly, the moral principle of utility favored the actions of Ford officials since they tried to balance the ratio of benefits to harm for the company, its consumers and the general society. Ford’s decision favored the company’s business interests, and the economic contributions the company was making in the US market. 3. In my view, Ford’s decision to build affordable cars with less fortified fuel tanks that could not withstand a rear impact of 20 mph meets the threshold of utilitarianism. This is especially true for a safer fuel tank that could withstand such an impact would have resulted in a more expensive Pinto model (Shaw, 2010). This would mean fewer sales of the car model and losses upon Ford, as many customers would opt for cheaper (foreign) car models with the same specifications. 4. Cost-benefit analysis (CBA) is a legitimate tool used in the regulation of financial services to determine whether given proposals will be viable in the actual search for viable solutions to certain problems. CBA is important in moral deliberation since it offers accurate figures which inform major financial decisions. In this case, Ford weighed the expected costs of mounting safer fuel tanks on Pinto (at $137.5 million on its 12.5 million automobiles) against the benefits ($49.5 million on the same number of cars) and chose not to implement any fuel tank safety measures for business expediency (Shaw, 2010). Unfortunately, the decision put several human lives on the line and attracted floodgates to criminal and civil suits against the company, which eventually cost the company almost a similar amount as fitting safer fuel tanks. The valuation of human life proved unsatisfactory in the whole process. Unfortunately, it is only reasonable to quantify the cost of damages to accident victims who are alive. 5. Immanuel Kant would contradict placing monetary value on human life. The philosopher supported the notion that human life has a natural dignity; therefore, another human life but not a monetary value can be used as its equivalence. In light of this, it is immoral to place a monetary value on human life. 6. Ford had several responsibilities to its customers: these included; a) the duty to produce safe cars that meet required standards before sale; b) recalling its cars with less fortified fuel tanks for repair as a way of guaranteeing the customers of their safety, especially after numerous accidents had been reported within the first five years of releasing the Pinto model into the market, and lastly; c) Ford had a responsibility to provide a warranty cover for the car model, especially the weak fuel tank system which was known to be vulnerable to a slight rear impact. Pinto customers are entitled to different moral rights including: the right to safer fuel tank in the use of the car model; and the right to fair cost of the car model in relation to other company models having similar specifications (Shaw, 2010). 7. If Ford had given its Pinto customers a reprieve in savings in relation to the unattended fuel tank, it would have made a moral sense on the part of the company’s operations and the car model in particular. Unfortunately, due to the fact that human life is priceless, a rational customer would not risk endangering their own life or the lives of their loved ones by opting for a cheaper car model with fuel tank safety problems. Although Ford would have scored highly on moral grounds if it informed its Pinto customers and potentials of the fuel tank fault before sale, they stood to lose lots of profit from potential Pinto customers. 8. (#10) GM was responsible for the death of Shannon Moseley. This is especially true because the fuel tanks were not protected from any serious side impact. Moreover, an investigation by the National Highway Traffic Safety Administration of the pickup truck model that the deceased was riding in showed that the car model’s fuel tank was vulnerable to accidents. The GM case is similar to Ford and Pinto case in the sense that both car assemblers were fully aware of the risks of sending their respective car models to the market but proceeded to do so anyway (Shaw, 2010). Perhaps the only difference in both cases is that whereas the first case study shows Ford’s internal decision-making processes and how they arrived at the decision to release Pinto into the market without a safer, fortified fuel tank, GM’s decision is fairly secret and based on utter refusal even in the wake of open weaknesses in the fuel tank positioning. Regardless, the resulting legal tussles and hundreds of millions of dollars in damages awarded by courts applies in both cases. 9. (#11) Whereas it is the responsibility of car makers to guarantee users of safety on the road by producing cars which are less prone to accidents, the duty comes with an increase in cost of the final product. Car companies seem to be taken aback by increased production costs, which when passed to customers often results in more expensive cars and less company sales. Unlike Ford’s and GM’s failure to score highly on moral grounds by knowingly mounting riskier fuel tanks on the specific cars for business expediency, SUV makers (including both companies) are moral in their decision to inform unsuspecting customers that cars without anti-rollover technology may rollover in the event of a crash (Shaw, 2010). In light of this, SUV makers should be held morally and legally responsible for “unnecessary” roll-overs that other standard vehicles of the kind can withstand. For safety reasons, SUVs should have wider tires, fortified fuel tanks, and diesel engines as standard safety qualities on less costly cars, and anti-rollover systems or other cutting edge equivalents as options for the higher-end market. 10. (#12)It is wrong for a business to sell goods whose quality is compromised, especially in the current world where cutting-edge technology can be accessed to ascertain the quality of the products entering the market. Nonetheless, it is not wrong to sell a vehicle that is less safe than those presented by market rivals, as long as the vehicle has met the standard safety conditions set by regulatory bodies such as NHTSA. NHTSA has put in place minimum thresholds for safety of cars on the roads. Reference Shaw, W.H. (2010). Business Ethics: A Textbook With Cases: A Textbook with Cases. New York: Cengage Learning. Read More