Business Ethics
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Business Ethics
Business Ethics
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Introduction:
Today, the businesses need to be ethical in their working. Ethics is the study of right and
wrong, the duty and different...Business Ethics
1
Business Ethics
Business Ethics
2
Introduction:
Today, the businesses need to be ethical in their working. Ethics is the study of right and
wrong, the duty and different obligations that the firm needs to follow, different moral norms and
the responsibility that an individual carries. Business Ethics is the ethics that needs to be
followed in the context of the business. It is the application of principles, discipline and theories
of ethics to the organizational context. (Helms, 2006). The business needs to work ethically and
morally in their business. The company has to meet the standards of conduct focusing on welfare
of humans and their right to make their own choices.
Ethics plays an important role in the business. The firms today face quite a lot of
problems. Some issues facing society and business include downsizing of staff, pollution control,
disposal of toxic waste, depletion and allocation of scarce resources, cost containment, changes
in law and technology, employee rights, discrimination against women and minorities, and
product safety. Issues such as these are complex and they create ethical dilemmas that are
difficult to resolve.
Ethical Perspective in case of Ford Pinto:
Moral standard means the standards or practices that might have direct or immediate
effects on human being. A business concern needs to work on the moral standards in all the
aspects with the utmost priority. The main moral issue that Ford Pinto case highlights is the life
of human i.e. the valuation of human life on the basis of negligence-efficiency. Ford Pinto was
launched in the year 1971, with accelerated features so as to beat the competition. It was In May
1972 when the first accident of Ford Pinto took place which took away the life of Lily Gray and
injured Richard Grimshaw, 13 years old child majorly. The car was running at thirty miles per
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hour when it collided with a car and the fire ignited. This was the first case that Ford Pinto had
encountered.
To beat the competition of the existing automobile companies Ford launched Pinto
known as Lees Car. The main reason for Fords accident was the design of Ford Pinto. The
fuel tank in Ford Pinto was located behind the rear axle. The ideal design of the fuel tank must
have been placed above the rear axle. Ford adopted this design so as to create more trunk space.
The design of Ford Pinto made Pinto more vulnerable to a rear-end collision.
The other design faults of Ford Pinto was that the gas tank and the rear axle were
separated by only nine inches even the bolts were placed in a position that ignited the concern.
The fuel filler pipe design resulted in a higher probability that it would to disconnect from the
tank in the event of an accident than usual, causing gas spillage that could lead to dangerous
fires. (Leggette, 1999).
Ford did not follow the rules of etiquette which served as the violation of moral
implications. Ford also did not follow different rules and regulations that were set by the
government. Ford did not follow the regulation that was proposed by National Highway Traffic
Safety Administration (NHTSA), which stated different safety measures that needed to be
followed by the automobile industry while designing the car engine basically focusing on the
rear end impact.
The main moral issue was the dollar value of human life. Ford did not follow moral
responsibility and obligation to see to the welfare and safety of the consumers of their product
regardless if the net overall effect results in a less than favorable product price point and
subsequent reduced profit margin to the stockholders. Ford assured that the car works perfectly
fine as assured and it is not dangerous. Ford preferred selling other cars if the customers prior
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requirement was safety instead of acceleration, at this requirement, Ford preferred selling larger
cars. Ford focused on cost benefit analysis by keeping costs and the benefits there in. Ford ran
parallel on the act utilitarianism wherein the good is calculated for a specific action at a specific
time. Nonetheless, act utility is a form of moral cost-benefit analysis that business, by its nature,
is already prone to factor. (Faculty Web Pages, n.d.)
Ford was solely responsible for all the loss of human life in case of Pinto as it really did
not care about the human lives it was more concerned about the cost that it incurred in adding on
safety measures. Thus, it can be said that Ford was morally wrong, they were not able to access
the consequences that the stakeholders could have faced because of the unsafe engine and car
design. Ford worked majorly for self interest keeping aside the interests of the people.
The management of the Ford believed that it is ethical to keep human life of few people
at stake in the name of the greater good for themselves or for greater numbers of people. They
treat human beings as inputs to a societal utility function. In the context of business, they value
profits above everything else because doing so serves greater numbers of people in the context of
business. Thus, they inevitably put a price on human life. (Alpaslan & Mitroff, 2004)
Ford Pinto accidents caused more than 500 deaths and many were severely injured by the
burn. Burning Pintos have become such an embarrassment to Ford that its advertising agency, J.
Walter Thompson, dropped a line from the end of a radio spot that read "Pinto leaves you with
that warm feeling. (Dowie, 1977)
Despite of the unsafe concerns of Ford Pinto, Ford continued the production of Pinto.
Ford Pinto was launched by Ford, in response to the lucrative car launched by Volkswagen. To
compete with the competition, Ford reduced its production time and launched Ford Pinto within
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25 months. The company produced over two million Pintos (Dardis & Zent, 1982). Dennis
Gioia (1992) identified two principles on which Ford executives based their decision. First, they
believed that safety doesnt sell. Second, Ford had a corporate norm that required managers to
adhere to the production limits of 2,000 that aimed to keep the cost and the weight of the car
below $2,000 and 2,000 pounds.
For different decisions, Ford used Ethical egoism, risk/benefit analysis (utilitarianism),
ethical relativism and stakeholders theory.
Ford Pinto used mainly cost benefit analysis to justify their decision. They used benefit
reasoning which was used in terms of the expected costs and benefits so as to justify their
decision.
They worked for self interest which justifies their Ethical egoism, they wanted to beat the
competition in the market so they rushed with their production of Ford Pinto and launched them
in the market within 25 months of operations.
Ford focused in their Stakeholders justifying the stakeholders theory, as Ford focused
on the profits an short term objective, they did not focus on long term consequences that the
unsafe Ford could have brought to the companys image. They just focused on short term
objective.
The other things that revolved round their decision was the Green Book of Ford which
focused on the production model.
Ford tried to value the human life of people and used that as the basis of cost benefit
analysis.
Ford could have decreased the cost of designing by focusing on innovation and producing
new design so as to avoid fuel tank rapture. Like stated by Good year, Ford could have used
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rubber bladder to cover the fuel tank so as to avoid the fuel tank rapture and explosion. It could
also have focused on reducing different legal costs and the profits that it intended to earn from
Ford Pinto.
Ford should have focused on repairing all its vehicles after the very first incident that
took place so as to avoid the human loss.
Safety must be the most prior thing that the business needs to... View Full Attachment Show more
