The Ethical Triangle and Ford Company - Assignment Example

?Ethical decision-making The ethical triangle and Ford Company case The core of the ethical theory of utilitarianism is the utility principle, which implies that we always act in order to promote the greatest amount of satisfaction and the least amount of dissatisfaction for the greatest number of people. The notion of human pleasures is equated with happiness therefore; the right action in any situation is the one that produces the greatest possible happiness for the greatest possible number. Happiness is the central value or good that motivates our behavior. The greatest happiness is fulfilled when acts that produce maximum happiness for those affected-the best results-are considered morally good acts. In utilitarianism, ethical behavior implies acting in the interests of the larger group, even if one must sacrifice one’s own interests to do so. The welfare of the group matters not the individual. Higher pleasures are logical or intellectual while lower pleasures are concerned with the physical needs. The role of pleasure is to provide happiness. Showing compassion for the society helps an individual care for the community in which he or she lives. Compassion is very significant to an individual in that it makes them realize the meaning and purpose of life, which is to be happy. This is because since every person wants to be happy, they will do anything to avoid misery and suffering. Virtues are important because they help human beings to derive pleasure in their actions, have uniformity in the way they act, and act promptly which in turn will result to peaceful co-existence, thus everybody will be happy about the life they live. Posner is following the principle of act utilitarianism in that he desires to die so that he does not cause financial constrain to his family. 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 $121 million. Since the social cost of $121 million outweighed the social benefit of $36 million, the study concluded that improving the Pinto design would not be cost-effective from a societal point of view. 1. Identify the relevant issues for decision-making In early 1960s, Ford’s market position was wearing down due to high competitions from domestic and international manufactures of subcompacts. Therefore, the Ford Motor Company, endorsed by the vice-president Lee Iacocca, came to a decision of manufacturing a new subcompact car called Pinto that was to be produced domestically at an affordable price. The decision of manufacturing Pinto was also aimed at gaining large market share for the company, the designing and development of Pinto car was therefore accelerated in order to meet this plan. The sales for the designed Pinto were excellent during the initial few years, but preceded a big problem later that needed an active decision mechanism for its effective solution. In May 1972, a tragedy happened where Lily Gray and Richard Grimshaw, aged thirteen years old, were touring in a 1972 Pinto car. Their car got struck by another vehicle which was estimated travelling at thirty miles per hour. The collision ignited fire in the Pinto, which took Lily Gray’s life leaving Richard Grimshaw with devastating wounds. A judgment was made against Ford and the jury granted the Gray family 560000 dollar. Matthew Grimshaw was also given $2.5 million to recompense the damage. However, jury was also granted $125 million in disciplinary damage as well. Another criminal case proceeded six month after the controversial Grimshaw verdict, where three women died after their car was hit by another car said to be driven at a low relative speed. Many people claimed that there death was because of ford’s failure to upgrade the automobile fuel system. We also finds that, according to fold engineers collapse test conducted on Pinto cars, revealed a serious imperfection in the gas tank. The test evaluates that, in clashes beyond 25 miles per hour there was always rupturing of gas tank. These engineers therefore suggested that, they had to change and strengthen the designing of the Pinto into a new model. 2. What should be the decision? The final decision, made by the ford company, was to redesign the Pinto into a more effective and efficient model. However, there are two reasons that lead to implementation of this decision. First, it was capable of meeting all appropriate federal laws and standards. Secondly, the Pinto was similar in safety to other vehicles being generated by the auto industry. However, Ford decided to use cost analysis featured in section 11 to create production decisions that interpreted into lost lives. During the first production and testing phase, limits were set for the Pinto meaning that the vehicle could not be exceeded beyond 2000 dollars in cost and 2000 pounds in weight. After the basic designing was completed, crash verifications began which reviewed that when it was struck from behind at a speed of 31 miles per hour, the Pinto’s gas tank broke down. The tank was therefore located according to the manufacturing standard at the time. 3. Under what conditions should the decision be different? The decision for designing the Pinto into a new model differed with the expectation of the risk/benefit analysis which justifies not creating the production modification of the Pinto model. It was estimated that designing the Pinto would result into 180 less burn deaths, 180 less serious burn wound, and 2100 less burned cars. The calculation made by NHTSA resulted to 200000 dollars per death, 67000 dollars per injury, and 700 dollars per car equating to a total of 49.5 million dollars. Since the advantage of 49.5 million dollars was much less than 137 million dollar, Ford felt justified in deciding not to modify the product design. Reference Donaldson., T. (2007). Ethical issues in business: A philosophical approach. New York: Prentice Hall. Read More