 In 1970s, Japanese car makers captured practically the

whole US market.

 Resultantly, US car makers started suffering heavy

losses.

 Lee Iaccoca, then President of Ford wanted a car that

could compete with the Japanese automobile makers

 The mandate was to make a car that was < 2000lbs in

weight, priced at < $ 2000 and should match the
Japanese cars in style and aethetics.
Ford PINTO
Change the Design:
 12.5 Million cars x $11 = $ 137 Million

Do Not Change the Design:

 180 Deaths = $200,000 per death
 180 Serious Burn Injuries = $67,000 per injury
 2100 Burnt Vehicles = $ 700 per burnt vehicle
Ford Decided Not to
Change the Design !
 Lee Iacocca was sent packing
from Ford Motor Company for
what many feel were the
disastrous memos about the
Pinto gas-tank debacle that led
to his desk. Not only was Henry
Ford II unhappy with the huge
amounts paid in fines and
punitive damages, but he
realized how this negative news
could affect all aspects of the
family business. It was no secret
that Henry and Lee didn't see
eye to eye anymore, and, in the
end, the man whose last name
was on the building won out.
For:-
 In a perfectly competitive free market profit making will benefit
the society but since most firms are not perfectly competitive
and inspite of being inefficient, try to earn profits
 This leads to harming the society more than benefitting it due
to pollution, tax evasion, fraud, product hazard, price fixing etc.
 Managers impose their value systems which might not be in
consonance with those of society.
 An employee should follow his superiors in his workplace

 Business ethics is essentially following law.

Against:-
 Ethics should govern all voluntary activities and since
business is a voluntary activity, it should also be governed by
ethics
 Business cannot carry on just lie this unless is follows a code
of conduct.
 Ethical considerations are consistent with business pursuits.
 Prisoner B Prisoner B does
cooperates not cooperate
with Prisoner A with Prisoner A

Prisoner A
A gets 1 year A gets 3 year
cooperates
B gets 1 year B goes free
with Prisoner B

Prisoner A does
A goes free A gets 3 year
not cooperate
B gets 3 year B gets 3 year
with Prisoner B

What would be Your Decision?