At the end of 2001 it was revealed that its reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud. Enron has since become a popular symbol of willful corporate fraud and corruption. They must have had no company credo! Before the energy conglomerate's collapse in 2001, Enron’s senior management team had developed a wonderful video on Enron's ethics and integrity. Clearly, Enron spent a fortune "packaging" these wonderful messages. It didn't really matter, since a number of Enron's top executives either have been indicted or are in jail.
Lecture 4 Case Study: The Ford Pinto In the 1970 s the Ford Motor Company designed a car called the Pinto that was driven by company marketing and economic goals No reinforcing structure between the bumper, rear panel and gas tank, meant that rear panel bolts would be thrust forward and could puncture the tank in a collision. The doors could potentially jam during an accident due to poor reinforcing, and material under car was insufficient to prevent fire from making its way into the cabin. However there were design flaws.
Lecture 4 Case Study: The Ford Pinto Investigative reporting by Mother Jones magazine unearthed the famous Ford Pinto Memo in which Ford executives were shownto be completely aware of the design flaw, and its consequences, and costs to recall thePinto in order to fix the problem . However, it was alleged that Ford made the decision that the cost of paying off potential law suits would in fact be cheaper based on arbitrary values placed on human lives and injury. This calculation in favor of profits led to major lawsuits, criminal charges, and a costly recall of all Pintos. While Ford was acquitted of criminal charges, it lost several million dollars and gained a reputation for manufacturing "the barbecue that seats four."
Lecture 4 Case Study : The Ford Pinto 1. The Ford Pinto memo apparently wasn't used or consulted in Ford's internal decision making. It was attached to a letter written to the National Highway Transportation Safety Bureau (NHTSA) concerning a proposed regulation. 2. $200,000 per life was not Ford's value; it was a value used, with qualifications, within NHTSA at the time. 3. The Pinto's principal design defect--locating the fuel tank behind the axle--was not unique to the Pinto. It was "commonplace at the time in American cars . 4. The Pinto's safety record was comparable to other sub-compact cars, such as the AMC Gremlin, Chevy Vega, Datsun 1200, Toyota Corolla, and VW Beetle. 5. The prevailing precedent at the time encouraged manufacturers to consider safety/cost tradeoffs
Lecture 4 Case Study : The Ford Pinto 1. The Ford Pinto memo apparently wasn't used or consulted in Ford's internal decision making. It was attached to a letter written to the National Highway Transportation Safety Bureau (NHTSA) concerning a proposed regulation.