Case Study on "Cost Benefits Analysis Versus Ethics"

Case Study 3 pages (1346 words) Sources: 3

[EXCERPT] . . . .

As far as a stakeholder analysis, fixing the design flaws at the onset obviously would have cost Ford money. However, the fact that the "benefits" were supposedly less than the cost of fixing the flaw is rather twisted given that nearly a thousand people died as a direct or indirect result of that design flaw. Indeed, the customers are stakeholders too and Ford had a duty to fix the design flaw before the car was ever sold to the public. This holds true even if Ford itself lost money and the shareholders (also stakeholders) were to squawk about the costs of fixing the problem. The point is that while worrying about money spent and shareholder returns is important to a publicly traded company like Ford, making decisions like Ford did that obviously and unquestionably endanger the public are never acceptable and should not be allowed to happen ... regardless of the cost. Ultimately, Ford could have absorbed the cost or scrapped the car. However, those five to nine hundred dead people had their lives cut short over something that was entirely preventable. Even well-designed cars can have fatality accidents. This is not in question. However, cars should not be exploding and burning to rubble if they are rear-ended at less than twenty to thirty miles per hour and that is precisely what was happening with Pintos and Ford knew it in advance. When it comes to analysis based on ethical theories, it is clear that Ford was exercising a lot of cultural relativism. Indeed, they were calculating whether to do the fix to the gas tanks based on dollars and cents. In many to most cases, this may be acceptable. However, any product that can kill its user due to a design flaw should be fixed. Any morally sound person, even in the car industry, would blast as unethical or even soulless the idea of selling a car with such an unsafe design flaw that could easily and obviously kill people. To state the obvious, society viewed what Ford did very dimly as they were ostensibly more worried about saving money than saving lives. Further, Ford had a duty to do the right thing anyway irrespective of what the public did or did not know.

Conclusion

As for recommendations, car companies that know about design flaws need to fix them when they arise. Again, when it comes to things like brakes, electrical safety, anything to do with fuel or anything else flammable and so forth, whether or not to fix a known flaw is not even a question. If a knob on a stereo is known to fall off, that's one thing. However, when the car cannot be braked, steered or there is any sort of fire hazard, allowing that flaw to go by unfixed cannot be allowed to happen. Ford should have absolutely used their better gas tank even if it meant money was spent up front. If the Pintos weren't exploding into flames, they quite possibly could have sold more due to less bad press and grueling deaths of their customers. Ford should have an ethics person that personally checks on the development of each car and keeps an eye on crash test results, problems that are found and so forth. That person should be independent of anyone else and should not face any punishment or blowback for offering an unvarnished opinion. Even better would be a third party auditor, much like what is done with accounting matters.

References

Dowie, M. (1977). Pinto Madness. Mother Jones. Retrieved 19 September 2015, from http://www.motherjones.com/politics/1977/09/pinto-madness

Shaw, W. (2015). Case: The Ford Pinto -- Business Ethics. Philosophia.uncg.edu. Retrieved 19 September 2015, from http://philosophia.uncg.edu/phi361-metivier/module-2-why-does-business-need-ethics/case-the-ford-pinto/

Sherefkin, R. (2003). Lee Iacocca's Pinto: A fiery failure. Automotive News. Retrieved 19 September 2015, from http://www.autonews.com/article/20030616/SUB/306160770/lee-iacoccas-pinto:-a-fiery-failure READ MORE

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