Running head: FORD PINTO CASE

Ford Pinto Case MGT 216 July 5, 2010

FORD PINTO CASE Ford Pinto Case The dilemma involving Ford with the production the pinto hit the car market hard. In the

creation of the ford pinto, it was built to meet to the competition of other economical cars. It was built to weigh only 2,000 pounds and cost less than 2,000, which was very affordable for most Americans. The production of the this new compact car, designed to compete with the foreign car industries, Ford Motor Company, under the leadership of Chief Executive Officer Lee Iacocca, was under extreme pressure to produce this car within a minimal time-line. Unfortunately, this short fused suspense resulted in the lack of stringent safety inspections. Because of this expeditious timeline, the Ford Pinto was not properly tested for rear- end impact. Instead of adequately testing this vehicle prior during the proper stage, it was tested after production. During the testing, it was discovered that this new compact vehicle, failed to meet internal safety standards for a vehicle of this size. Ford had mistakenly installed the fuel tank in the rear of the car versus on the side. Therefore, upon rear end impact, the risk associated with major damage, including potential vehicle, was severely high. Ford deliberated this issue and derived at a few courses of action. Unfortunately, the action that they chose was based on dollars and not sense; Ford selected potential monetary gain over the lives of their customers. Corporate leaders, managers and engineers were all aware of the problem; however, they still agreed to move forward with production. After reading the case study in detail, I clearly believe that this issue could have been avoided, saving consumer lives and still generating profitable income, had Ford been more concerned about their reputation than their profit. It has clearly become evident that Ford has spent more time dealing with this issue than it spent in the entire lifecycle of Ford Pinto Production; and the company has clearly shelled out more money in litigation and fines than it ever expected. Bottom line, the Ford Pinto should have been tested, in its fullness, from the front, around all sides and into the rear for impact consequences. Unfortunately, at this stage, Ford has

FORD PINTO CASE incurred a problem that historians have, and will continue, to use as an example of a bad ethical decision; one that has negligently resulted in loss of life for far too many people. I have come to conclude that in business it is very important to take the appropriate amount of time to correct known deficiencies and to always make safety a number one priority. Before any vehicle can be shipped for sale, I believe they should be fully tested to ensure that they are operating at the highest level of efficiency and deemed to be of the highest safety

standard. A companys reputation, their character, will undoubtedly reap far greater benefits for them when the final earnings are added up. Earnings should not just be counted in dollars because ethics far exceeds any dollar amount. The pressures of competition, making a dollar and name recognition will never outweigh honesty, integrity, respect, honor, dignity and values of the sort. Individual pressure is often caused by social pressure and Mr. Iacoccas desire to build the Ford Pinto was clearly a result of an external pressure to produce a vehicle that was equal to or better than others in that class. Unfortunately, submitting to such pressure, at the expense of others, more often that not adds up to a net loss. External social pressures play a big part in the decision reached about the Ford Motor Company. Individuals lives were put in jeopardy. Ford was put through the media due to the harm they put on humans lives. It took the Ford Motor Company several years to retain their reputation. There were a number of options that Ford had that would have prevented the deaths of so many people yet it was not done until eight years after the release of the first model. Mr. Iacoccas purpose was on profit and not safety. It is obvious, that for all the accolades he has received in the automobile industry, this ethical blemish resulted in a serious character flaw. Money will never replace a human life and I am confident that Mr. Iacocca will concur with that belief; and if he were able to turn back the hands of time, I believe he would have definitely done things much differently by ensuring vehicle and consumer safety. His own personal ethics were

FORD PINTO CASE reflected in the ethic of the organization he led. Fortunately, both he and Ford Motor Company have made great strides to overcome the error of their ways. Until about 20 years ago very little was known about the topic of organizational ethics. Today a persons career can be severely damaged if an ethical issue is mishandled. Ford waited

eight years to change the design of the Pinto because of an internal cost-benefit analysis, which placed a dollar value above human life. The analysis indicated that an immediate correction to the Pinto wasnt profitable; and in fact, it would be less expensive to pay for the injuries/deaths of others than it would be to make a change that would save lives. However, Ford has since come to understand that such logic is not logical at all. Ford found themselves not guilty of legal wrongdoing but their organizational ethics were clearly called into question (Trevio & Nelson, 2007) The ethical choice for most would have been to produce a vehicle that was safe, period. These vehicles could have been made safe by simply using the plastic barrier and adding the cost to the vehicle. A few dollars could have potentially been saved elsewhere from within the organization. Unfortunately, in real life situations, many people make decisions that they may not normally make especially when monies are involved. Most people will give back a wallet containing just a few dollars but many will keep the same wallet if it contains a large sum of money Fords found itself in the midst of an ethical dilemma and unfortunately they chose the wrong course of action regarding the resolution of the matter. They have since been widely criticized and one of their former executives, Mr. Harley Copp, a resigned from the company and was very vocal in his criticism of the organization. Mr. Copps criticism was heard by many citizens including a gentleman named Ralph Nader. Mr. Nader is a consumer advocate and his,

FORD PINTO CASE as well as others, criticism of Ford is the reason that we are dealing with this Ford Pinto Case Study today.

FORD PINTO CASE References DeGeorge, R. T. (2006). Business Ethics (6th ed). Retrieved June 30, 2010 from https://ecampus.phoenix.edu/content/eBooklibrary2.

Newton, L.H. & Ford, M. M. (2005). Taking sides: Clashing views in business ethics and society (10th ed.). Retrieved\June 22, 2010 from https://ecampus.phoenix.edu/content/eBooklibrary2 Trevino, K. and Nelson, K. (2007). Managing Business Ethics. Straight Talk about How to Do it Right, (4th ed.). John Wiley & Sons.