Mgt 216 - Organizational Ethics and Social Responsibility - Ford Pinto Case Study

Case Study Discussion & Executive Summary

MGT/216 - ORGANIZATIONAL ETHICS AND SOCIAL RESPONSIBILITY

November 8, 2010

Case Study Discussion & Executive Summary

Introduction

From our text we have learned there are two ways a person can think about ethical decision making: from the prescriptive approach or the descriptive approach. The prescriptive approach offers up decision making tools which prescribe what decision we should make as moral individuals. The descriptive approach, on the other hand, deals with how people actually make ethical decisions (Treviño & Nelson, 2007). Thinking about our own ethical decisions, many will find that what we should do doesn't always line up with what we actually do. This is evident in the Ford Pinto case of the 1970's.

The case surrounding the Ford Pinto involved deaths of three teenaged girls. There is no doubt there were some ethical decisions the company needed to make. Our team has developed an executive summary which includes the following key points: roles of people, products and profits; the differences in the Ford Motor Company's mission, values, and guiding principles then and now as well as; an analysis of our learning teams values compared to the values of the Ford Motor Company.

Role of People, Products, and Profits

In the Ford Pinto gas tank explosions case, the engineers were pushed to design and produce this vehicle in only 2 years. CEO's and managers knew the safety standards were poor, but decided to move forward with production. The National Highway Traffic Safety Administration (NHTSA) was also aware of the problem, but accepted the cost/benefit analysis argument. Ford went through with the plan to manufacture and sell the Pinto even though the safety level remained a concern.

Ford estimated that making the change in the Pinto would have an overall cost of approximately $137 million dollars. "This $11 per unit cost applied to 11 million cars and 1.5 million trucks. Ford estimated that making this $11 change would result in a total of 180 less burn deaths, 180 less serious burn injuries and 2,100 less burned vehicles. (Palmiter, 1999)" Ford used a risk/benefit analysis to argument to justify these numbers to the NHTSA.

Ford did not profit from making the unwise decision to manufacture the Pinto without suggested safety features. Following the tragic deaths of many individuals, Ford found itself in many controversial court cases. In just one court case alone, a family was awarded "$3.5 million (Palmitter, 1999)" dollars. This is well above what it would have cost Ford to simply make the necessary safety changes in the Pinto.

Mission, Values, and Guiding Principles: 1970's & Present Day

Learning Team C discovered Ford executives' primary concern was challenging Europe for profits in the small-car market. Ford's leaders risked customer's lives because safety was not considered a consumer preference at the time. Although Ford officials knew the probability of increased casualty-rates, it continued to manufacture and sell unsafe vehicles. Ford's integrity and credibility suffered as a result. Over the past few decades, Ford has learned from previous mistakes. The ethical principles surrounding the Pinto case are in stark contrast to the Ford Company today.

In June, the Ethisphere Institute,