Essay on "Moral or Ethical Difference if the $11"

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moral or ethical difference if the $11 savings had been passed on to Ford's customers? Could a rational customer have chosen to save $11 and risk the more dangerous gas tank? Would that have been similar to making air bags optional? What if Ford had told potential customers about its decision?

In an effort to under-price the competition in the increasingly cutthroat automobile industry, under the leadership of Lee Iacocca, Ford cut many corners when designing their newest model, the Ford Pinto. Although design engineers had reported that the alternate placement of the gas tank was a time bomb waiting to happen, Ford stuck with its "under $2,000, under 2000 pounds" initiative and went ahead with the design as planned. Their blunder was exposed to the public in an article in Mother Jones magazine, which incited a maelstrom of negative backlash against the automotive industry and their lack of concern for safety. In this sense, Ford was to blame for Pinto debacle in that the company could have done more to ensure safety. There would have been no moral difference if the $11 savings had been passed on to Ford's customers. No rational person would chose to risk their lives to save $11. However there are still questions about where to draw the line when it comes to manufacturer responsibility. After all in our overly-litigious society, American industry is finding itself increasingly at risk.

Ford felt the impact of the tort system's growing obsession with institutional punishment as their actions were considered not just a mistake, but a crime. As Shaw and Barry (2004) point out even if corporations cannot be considered "moral actors," the law can "still fine them, monitor and regu

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late their activities, and require the people who run them to do one thing or another" (p. 212). They can also indict them. The Ford Motor Company was indicted on two counts of criminal homicide. Because the prosecution was not able to prove that Ford acted with conscious bad faith, or that any official of the company even believed that its design was unreasonably dangerous, let alone had any intent to kill or injure, Ford was acquitted of claims of criminal homicide but not of criminal product liability. This does not mean however that lawsuits such as the one against Ford should be entirely disallowed. There are certainly instances when manufacturer neglect is viably criminal. This case was not the last to invoke strict-liability tort standards as a new basis for criminal responsibility. The new tort law had come full circle. Strict liability was originally offered as a low-key, no-fault insurance system. These no-fault principles have been stretched to define a new class of crime.

The hazards of risk and cost-benefit analysis have often been trumpeted in the philosophical literature on business ethics. As such, the most famous perversions of this sort of thinking have elicited immense contemplation. The infamous Ford Pinto case has been the subject of numerous ethical case studies and it remains a subject of interest decades after it occurred. It is likely that this case continues to persist as a hot topic of debate primarily because of the questions it raises about risk and cost-benefit analyses not only from a financial perspective but also from an ethical one. I believe that the Ford Motor Company made a morally incorrect choice in placing Pinto gas tanks where it did. Consumers were uninformed, the record of the Pinto in rear-end collisions was worse than that of competitors, and Ford fought government regulations. While informing customers would have reduced this liability to some extent, it is the manufacturer's responsibility to provide safe products, as many people would not completely understand the implications even if they were informed.

References

Shaw, W.H., and Barry, V. (2004). Moral issues in business, 9th Ed. Australia: Thomson/Wadsworth

2. Should Ford have been found guilty of criminal homicide in the Ulrich case?

As tragic as the Ulrich case was, I believe that the courts decision to acquit Ford of claims of criminal homicide but not of criminal product liability was the right decision. Criminal homicide entails the intent to do harm, which Ford was clearly not guilty of. However they were definitely guilty of negligence. The prosecution was unable to provide any proof that the Ford Motor Company had malicious intent, nor was it able to prove that the executives at Ford were aware that the product was a ticking time bomb. Therefore, to convict Ford of criminal homicide would ultimately change the entire criteria of what constitutes that crime.

Ultimately, no matter what the laws dictate, the potential for individuals and organizations to behave unethically is limitless. Unfortunately, this potential is too frequently realized. When Ford failed to correct a known defect that made its Pinto vulnerable to gas tank explosions following low-speed rear-end collisions the company clearly crossed numerous legal and ethical boundaries. Even several decades after this incident and a plethora of reform efforts, unethical organizational practices are still absurdly commonplace. However what is even more absurd is the rabid amount of frivolous litigation suits that are brought against companies that needlessly tie up our court system.

Consumers have a reasonable expectations that major corporations are not going to sell them products that are going to put their lives at risk. There is a difference between purposely selling a five-year-old a book of matches and purposely selling a trusting customer a car that is likely to explode on impact. The placement of the gas tank was a choice made by Ford to increase their profit margin -- it was not a necessity. As such, they betrayed the public's trust and were negligent in their responsibilities. They were not however, guilty of criminal homicide due to the lack of intent.

4. How can organizations help raise the self-esteem of workers? How might organizations benefit if they are able to successfully implement these strategies? Discuss the answer with related theoretical concepts.

Scholars have provided numerous explanations from a variety of perspectives regarding what motivates employees to excel. These range from behaviorism theories to stage theories to cognitive theories. Yet among these divergent models, one concept remains relatively undisputed; the fact that people need to feel confident in themselves and their abilities in order to succeed. As such, the concept of self-esteem plays a major role in employee motivation, and therefore organizational leaders will benefit from raising the self-esteem of their employees.

Building self-esteem is a core component of cognitive behavioral theory; a model which combines the learning process focus of cognitive theories and the action-based focus of behavioral theories. Keeping in mind that employers are not therapists, the question of how to raise the self-esteem of workers using strategies that come from the cognitive behavioral model is challenging to answer.

In order to approach the situation from a cognitive behavioral perspective, employers need to work at changing the way an employee thinks, as well as the way he behaves. For example, according to McGrath (2001) "Research has shown that the more roles people fill, the more sources of self-esteem they have. Meaningful work has long been one of the important ways to feel good about oneself" (para 2). Accordingly, giving an employee greater responsibilities and more meaningful work will affect both behavioral and cognitive aspects of self-esteem. By wearing more hats, his behavior will adapt to the new responsibilities, and the more minutes of his day that are filled with meaningful work will cause him to think more positively about his worth and value to the company.

Stage theories such as Abraham Maslow's (1970) hierarchy of needs also provide helpful insight into the importance of self-esteem on employee motivation and satisfaction. As employees make their way up the hierarchy from fulfilling their basic needs to striving for self-actualization, they become more productive and satisfied individuals. This, of course, is not only good for the individuals but for the success of the company.

What the issue of self-esteem in the workplace ultimately boils down to is that employees need to feel responsible, appreciated and worthy. The more responsible, appreciated and worthy they feel, the more likely they are to have higher levels of self-esteem, self-efficacy (a belief in their abilities), and confidence that they are making a valuable contribution to the company for which they are employed. Positive reinforcement through compliments on a job well done, to adding responsibilities, to raises and promotions will all help achieve these goals. There is no one size fits all strategy for building self-esteem in employees, but according to Geller (2000), "asking people to define policies and procedures and develop an action plan makes them feel important, improves self-esteem and confidence, and prepares them for the challenge to lead" (para 18). The obvious benefit for employers is happier, more confident workers who are driven to excel.

References

Geller, S. (2000, May 18) How to overcome resistance to change, ISHN, Retrieved from http://www.ishn.com/Articles/Feature_Article/5802fbac78fb7010VgnVCM100000f932a8c0

Maslow, a., (1970) Motivation and personality, 2nd ed., Harper & Row (orig. 1954)… READ MORE

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Quoted Instructions for "Moral or Ethical Difference if the $11" Assignment:

“

Instruction : Please answer 4 questions, of which Question 1 & 2 are compulsory. The layout of your answers should be in

paragraph style.

THE VALUE OF LIFE

There was a time when the “made in Japan” label brought a predictable smirk of

superiority to the face of most Americans. The quality of most Japanese products usually was as low as their price. In fact, few imports could match their domestic counterparts, the proud products of "Yankee know-how." But by the late 1960s, an invasion of foreign-made goods chiseled a few worry lines into the countenance of American industry. And in Detroit, worry was fast fading to panic as the Japanese, not to mention the Germans, began to gobble up more and more of the subcompact auto market.

Never one to take a back seat to the competition, Ford Motor Company decided to meet the threat from abroad head-on. In 1968, Ford executives decided to produce the Pinto. Known inside the company as "Lee’s car," after Ford president Lee Iacocca, the Pinto was to weigh no more than 2,000 pounds and cost no more than $2,000.

Eager to have its subcompact ready for the 1971 model year, Ford decided to compress the normal drafting-board-to-showroom time of about three-and-a-half years into two. The compressed schedule meant that any design changes typically

made before production-line tooling would have to be made during it.

Before producing the Pinto, Ford crash-tested eleven of them, in part to learn if they met the National Highway Traffic Safety Administration (NHTSA) proposed safety standard that all autos be able to withstand a fixed-barrier impact of 20 miles per hour without fuel loss. Eight tandard-design Pintos failed the tests. The three cars that passed the test all had some kind of gas-tank modification. One had a plastic baffle between the front of the tank and the differential housing; the second had a piece of steel between the tank and the rear bumper; and the third had a rubber-lined gas tank.

Ford officials faced a tough decision. Should they go ahead with the standard design, thereby meeting the production timetable but possibly jeopardizing consumer safety?

Or should they delay production of the Pinto by redesigning the gas tank to make it safer and thus concede another year of subcompact dominance to foreign companies?

To determine whether to proceed with the original design of the Pinto fuel tank, Ford decided to use a capital-budgeting approach, examining the expected costs and the social benefits of making the change. Would the social benefits of a new tank design outweigh design costs, or would they not?

To find the answer, Ford had to assign specific values to the variables involved. For some factors in the equation, this posed no problem. The costs of design improvement,

for example, could be estimated at eleven dollars per vehicle. But what about human life? Could a dollar-and-cents figure be assigned to a human being?

NHTSA thought it could. It had estimated that society loses $200,725 every time a person is killed in an auto accident. It broke down the costs as follows:

Future productivity losses

Direct $132,000

Indirect 41,300

Medical costs

Hospital 700

Other 425

Property damage 1,500

Insurance administration 4,700

Legal and court expenses 3,000

Employer losses 1,000

Victim’s pain and suffering 10,000

Funeral 900

Assets (lost consumption) 5,000

Miscellaneous accident costs 200

Total per fatality $200,7251

Ford used NHTSA and other statistical studies in its cost-benefit analysis, which yielded the following estimates:

Benefits

Savings: 180 burn deaths; 180 serious burn

injuries; 2,100 burned vehicles

Unit cost: $200,000 per death; $67,000 per injury;

$700 per vehicle

Total benefit: (180 x $200,000) + (180 x $67,000)

+ (2,100 x $700) = $49.5 million

Costs

Sales: 11 million cars, 1.5 million light trucks

Unit cost: $11 per car, $11 per truck

Total cost: 12.5 million x $11 = $137.5 million2

Since the costs of the safety improvement outweighed its benefits, Ford decided to push ahead with the original design.

Here is what happened after Ford made this decision:

Between 700 and 2,500 persons died in accidents involving Pinto fires between 1971 and 1978. According to sworn testimony of Ford engineer Harley Copp, 95% of them

would have survived if Ford had positioned the fuel tank over the axle (as it had done on its Capri automobiles).

NHTSA’s standard was adopted in 1977. The Pinto then acquired a rupture-proof fuel tank. The following year Ford was obliged to recall all 1971-1976 Pintos for fuel-tank

modifications.

Between 1971 and 1978, approximately fifty lawsuits were brought against Ford in connection with rear-end accidents involving the Pinto. In the Richard Grimshaw case,

in addition to awarding over $3 million in compensatory damages to the victims of a Pinto crash, the jury awarded a landmark $125 million in punitive damages against Ford. The judge reduced punitive damages to $3.5 million.

On August 10, 1978, 18-year-old Judy Ulrich, her 16-year-old sister Lynn, and their

18-year-old cousin Donna, in their 1973 Ford Pinto, were struck from the rear by a van near Elkhart, Indiana. The gas tank of the Pinto exploded on impact. In the fire that resulted, the three teenagers were burned to death. Ford was charged with criminal homicide. The judge presiding over the 20-week trial advised jurors that Ford should be convicted if it had clearly disregarded the harm that might result from

its actions, and that disregard represented a substantial deviation from acceptable standards of conduct. On March 13, 1980, the jury found Ford not guilty of criminal homicide.

For its part, Ford has always denied that the Pinto is unsafe compared with other cars of its type and era. The company also points out that in every model year the Pinto

met or surpassed the government’s own standards. But what the company does not say is that successful lobbying by it and its industry associates was responsible for delaying for 9 years the adoption of NHTSA’s 20-miles-per-hour crash standard. And Ford’s critics claim that there were more than forty European and Japanese models in the Pinto price and weight range with safer gas-tank position. "Ford made an

extremely irresponsible decision," concludes auto safety expert Byron Bloch, "when they placed such a weak tank in such a ridiculous location in such a soft rear end."

Questions 1 and 2 are based on the case study above and they are compulsory to attempt.

1. Would it have made a moral or ethical difference if the $11 savings had been passed on to Ford’s customers? Could a rational customer have chosen to save $11 and risk the more dangerous gas tank? Would that have been similar to

making air bags optional? What if Ford had told potential customers about its decision?

2. Should Ford have been found guilty of criminal homicide in the Ulrich case?

3. 3M Corporation offers employees seminars on financial planning and parenting; and Tires Plus offers classes on nutrition and healthy cooking, work/life balance, weight loss, and smoking cessation. Do these programs represent a good use of company funds? Explain your answer.

4. How can organizations help raise the self-esteem of workers? How might organizations benefit if they are able to successfully implement these strategies? Discuss the answer with related theoretical concepts

5. It has been said that “attitudes represent a powerful force in any organization.” Support this statement with the help of relevant theoretical concepts and related examples?

6. Describe the needs present in Maslow’s hierarchy. How can organizations attempt to meet these needs so that employees are motivated to produce more work? Discuss the answer in detail

7. Do you think the labor union movement is dead? Why or why not? Answer this question through Hong Kong’s unions’ perspective

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