Determining discovered a serious failing in the gas

Determining
how to conduct business properly and responsibly at all times can be a
difficult task. Any known or unknown act of misconduct by businesses not only
draws public attention, but also unnecessary governmental involvement to
reassure businesses take the appropriate steps to improve ethical actions in
their establishments. The conducts of businesses come under routine scrutiny as
their entrepreneurial reach and power increase. Society constantly observes how
these companies treat their workers and their customers, how well they ensure
to meet their responsibilities, how many contributions they make to their
communities where they do business, etc. Hence, how quickly and the manner in
which these organizations recognize and resolve ethical issues serve as an
important tool to assess ethical decision making practices by these
organizations. The Ford Motor Company’s handling of the 1970s Ford Pinto models
provides an excellent example of an ethically controversial practice of
business. The cases involved Ford Pinto’s defective fuel system design, which
Ford decided not to rectify due to a cost-benefit analysis they had conducted.
This led to Ford taking a lot of heat for what was seen as an unethical
decision.

Due
to increased gas prices in the 1970s, American car buyers were looking for
smaller, more fuel efficient automobiles. Japanese automakers, who were specialists
in creating such models of cars, had a strong presence in the U.S market. To
compete with the Japanese automakers, Ford’s president, Lee
Iacocca, decided to produce an economical vehicle called the Ford Pinto. Unfortunately,
due to a rushed production, the design ended up being faulty. Crash tests
discovered a serious failing in the gas tank, which was placed directly behind
the rear axle to create additional trunk space. The improper placement of the
gas tank increased the risk of an explosion in an accident involving rear end
collisions. At Ford, a debate broke out about whether or not to move forward
with the existing Pinto model. Legally, the automaker stood on solid grounds
because government guidelines at the time required gas tanks to remain intact upon
impacts under 20 miles per hour
(Hoffman,
2005). However, dilemma was whether it was an ethical decision, despite being a
legal one. Ford made the final decision based on utilitarian terms, in which a cost-benefit analysis was carried out
to evaluate the loss. Ford assigned monetary values to assess the redesign
cost, probable litigation cost, and the cost value of lives of potential
victims. The calculation assigned the value of human life at $200,000, a
serious burn injury at $67,000 and estimated fatalities of 180 people and critical
injuries to 180 people. It was concluded that it would cost $137 million to redesign
Pinto’s gas tank, while possible liability costs could add up to $49 million.
Ford decided it would be more lucrative to continue to produce the defective Pinto
rather than to rectify the design. Thus, in September, 1970, Ford released its
first Pinto in the market. They sold the faulty model for almost seven years
before the company was eventually litigated for the faulty gas tanks, which
allegedly killed hundreds of people. 

On
August 10, 1978, three teenage girls died driving a Ford Pinto in Elkhert County,
Indiana. Their car was struck from behind by a van, and their Pinto’s fuel tank
ruptured causing the car to explode in flames. The information about the Pinto’s
faulty gas tank had already became a news in 1977 through investigative efforts
by Mark Dowie of Mother Jones Magazine (Hoffman, 2005). Subsequently, Ford was sued
in an Elkhart County court where a grand jury indicted a criminal homicide and
recklessness charges against Ford, the first ever against an American
corporation. During the litigation procedures, Elkhart County prosecutors
maintained that Ford’s engineers were well aware of issue with the gas tank,
but they did nothing to correct the failing design. It was also revealed to the
court that Ford valued profits over buyers’ safety and welfare. On the other
hand, Ford maintained that the Pinto was a safe vehicle and adhered to all the safety
regulations of Indiana. Ford also declared that the engineers deemed the Pinto
as “a good, safe car and bought it for themselves and their families” (Hoffman,
2005). Ford further convinced the court that it built the Pinto “to take on the
imports, to save jobs for Americans, and to make a profit for its stockholders”
(Hoffman, 2005). On March 13, 1980, the Elkhart County jury
found Ford not guilty of criminal homicide in the case involving three teenagers.

In
their defense, Ford’s showed how they considered “the greatest happiness or
good for the greatest number of people.” 
In Ford’s case, the decision to capitalize on profit while discounting
safety concerns was producing the greatest good because more people were able
to own an inexpensive car, which compensated for the loss of comparatively few
lives. Hence, in order to maximize collective well-being, Ford utilized the
utilitarian approach and prioritized the benefits of the group over the
interests of individuals.

A
drawback of the utilitarian approach involves assigning values to the benefits
and harms of our actions and their consequences. First, how can Ford determine
whether the loss of lives justifies the economic benefit gained by others?  The calculations by which the welfare of the
group is measured against that of the individual may leave scope for bias.
Second, it may be considered unreasonable and faulty to make decisions based on
impossible calculations of the future. Another limitation of their decision was
that Ford disregarded some of the other essential principles of ethics, such as
autonomy and justice of the drivers.

Personally,
I disagree with Ford’s approach because I believe that Pinto drivers should have
also be given rights to make their own decisions. These Pinto drivers might
have handled the same information differently; they may have placed safety
concerns ahead of finances. By not considering getting their consent, Ford
violated their autonomy. Moreover, limiting non-Pinto drivers’ liberties for
the benefits of Pinto drivers can also be considered unfair and biased. Ford’s
decision makers were only thinking from an organizational point of view, and
failed to consider that the Pinto, with its faulty design, could be a major
threat to everyone on the road.

Although
the utilitarian approach is a legitimate tool to calculate cost-benefit
analysis, I believe it should be limited for strictly financial decisions. By
putting a value on human lives, Ford treated its customers as a means to an
end. By utilizing the principles of utilitarianism, Ford implied that their
neglect for drivers’ safety did not matter, as far as they were successful in attaining
a desired outcome for overall good. In this case, it was acceptable for Ford to
not fix the faulty design in the Pinto and sell the car at low cost as far as their
actions made their customers happy. By doing this, they not only let go of the
morality of their action, but also disregarded the value of human lives. 

 Based on Immanuel Kant’s theory, the integrity
and rights of a person should always be respected. If I had to deal with the
same dilemma Ford had to, I would have followed Kant’s ethical perspective over
the utilitarian approach. Kant’s ethical perspective states that the rightness
or wrongness of actions are not determined by the outcome, but whether these
actions fulfill our moral duty. Kant’s ethical theory implies that the morality
of any action basically depends upon intrinsic nature of the action (Johnson,
2015). Human lives have a fundamental value apart from any cost-benefit breakdown.
There should not be a moral cost-benefit analysis that permits organizations to
risk any human being for financial gain. Regardless of the consequences, harming
other human beings is not acceptable.

By
applying the Kantian ethics to make a
decision, I would also argue that the “categorical imperative” of
moral action is not to treat human beings as means to an end, but as an end in
themselves. This is unlike the utilitarian view, which allows for use of
individuals as means to benefit the many. Thus, any calculations generated in the
Ford Pinto cases should not have been taken as quantitative outcomes, but
instead as a basis for comparing and assessing different intervention
approaches.

I
believe if Ford had made a decision using Kant’s approach to ethics, they would
have decided not to move ahead with production of the Pinto. Ford’s leaders and
engineers would have probably argued that the car should not be manufactured
and sold to customers unless it is entirely safe. Ford’s decision would have
been based on a responsibility to humanity, regardless of the consequences. However,
in reality, Ford’s leaders behaved irrationally by convincing themselves that
they were producing a greater good. 

By
making their decision on the basis of cost-benefit analysis, Ford’s executives became
victims of what Harvard Professor, Max Bazerman, calls “Cognitive Biases.” Their decision was a product of “perceptual
biases than of unhealthy motivations” (Johnson, 2015).  It is interesting to look at the Pinto
decision from this perspective. Although Ford executives knew that the car had
a risk of exploding, their final decision gave no consideration to their
customers’ welfares. They took no initiative to reach out to Pinto buyers and
ask if they were willing to pay an extra few dollars to fix the gas tank. The “cognitive barriers” clouded their
decision-making skills. They were under the impression that their decision is
morally permissible because it produces a greater good to society. In court, Ford
also used moral disengagement tactics
to defend their decision. They kept claiming that the “Pinto is safe,” thus refuting
its risk of causing any harmful consequences. Ford managers also claimed that
Ford did everything according to the NHTSA standard in effect until 1977. In
doing so, they separated themselves from any responsibility of any harmful effects
caused by the Pinto. By using a variety of tactics to excuse itself from wrongdoing,
Ford showed moral disengagement.  Moreover, by making selfish decisions without
regard for others, and trying to avoid its consequences, Ford’s leaders,
engineers, and counsel demonstrated to be at the Pre-Conventional Moral Development stage in which what is
considered right is what one can get away with.

As
a leader in the automobile industry, Ford should have thought about the long-term
benefits and consequences of the decisions they made as an organization. They
not only disregarded their customers, but also did not set high ethical
standards for their employees and followers. By not striving for fairness, not taking
responsibility for their actions and not showing respect for human lives, they
set low ethical standards. Also for the similar reasons, Lee Iacocca cannot be
considered as a role model for Ford’s followers, as he did not show qualities
of a good leader.  

In
analyzing Ford’s behavior from an organizational
citizenship perspective, it should have taken the information provided by its
engineers seriously, and should have discontinued production on the Pinto when
the safety issues were brought up. However, Ford did not do that because by
doing so, it would have incurred monetary loss. Hence, for Ford, the risk of
jeopardizing human lives was worth the monetary rewards. This irresponsible behavior places Ford in the elementary stage of development for
corporate citizenship because it gave priority to making a profit for the
business and not to the wellbeing of society and its people.  Furthermore, if Ford’s maturity of societal
issues and the public’s expectations around such issues is measured, it puts
them in the latent stage, in which
the issue is largely ignored or dismissed by the organization. 

As
a result of analyzing this case, I have learned that a good leader is truthful,
trustworthy, and demonstrates integrity. The leader who “walks the talk” by
adopting and implementing moral values into action, generates the higher level
of trust and respect from followers. While ethical decisions may not always be
the easiest, a business can gain long-term rewards by conducting ethical
practices. In Ford’s case, poor ethical leadership practices led to an eventual
hit to their reputation, which likely financially hurt the brand following the
fallout of the Pinto issue. If they had acted ethically instead of prioritizing
profits over lives, they might have gained the trust of the public, and
increased sales due in part to a good reputation. Ethicality in business
depends on many individuals making ethical decisions. Organizational behavior
can lead to ethical business practices if the members of the organization
choose to act ethically. However, if one individual in the organization
prioritizes profits over ethics, it could cause a series of business actions
that result in unethical practices. Organizational leadership must be strong in
its ethical stance in order to ensure that the organizations actions reflect
this ethicality.

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