...Amy Bruney Marketing Ethics I. Introduction II. Literature Review III. Recommendations & Implications for Marketing Managers IV. Conclusion V. Sources INTRODUCTION “For seven years the Ford Motor Company sold cars in which it knew hundreds of people would needlessly burn to death.” Mark Dowie, Author of Pinto Madness (8) One of the biggest automotive news stories in the latter part of the 1970’s dealt with tales of exploding Ford Pintos and the considerable awards civil court juries were presenting to victims of accidents involving the cars. Ford produced the Pinto automobile from 1971 to 1980. Initially the car sold well, but a defect in the early models made Pintos prone to leaking fuel and catching on fire after relatively low-speed, rear-end collisions. The Pinto’s gas tank was located behind the rear axle. A rear-end collision of about 28 miles per hour or more would crush the car’s rear end, causing the tank to split and the filling pipe to break loose. It had been proven that spilled fuel and sparks from the crash caused fires that produced fatalities or serious burns. Was Ford aware of the potential problems in the framework of the Pinto? Was there an easy, inexpensive way to fix these problems? Was the Pinto fire controversy a lot of hype, or had Ford truly discounted human lives in order to save a few dollars? If Ford management really placed marketing considerations above safety, was that objective ethical...
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...The Ford Pinto Case The Ford Pinto Case was a very controversial moment in Ford’s history. They were struggling to keep up with the ever rising imports of Japanese auto manufacturers that were being produced and sold at a rate that was light years ahead of the industry. Ford had to come up with a solution and they had to do it fast. Their answer, the Ford Pinto, a car that was great on gas, easy to produce, and could be sold at an astonishingly low price. Ford’s answer to the car market demands relied heavily on the success of the Ford Pinto. They had very little time to produce a car that was both good on gas and even better on the wallet. This is illustrated when they speak of the fact that they only had “25 months rather than the usual 43 months for a new car line” (DeGeorge 298). We often find ourselves in a pinch each and every day, with decisions that can only hang in limbo for a matter of moments. What happens when we do this, we often force ourselves to take shortcuts to reach the end result. I believe this holds true more often than not if we reflect upon these moments in our lives. This was no different than the case of Ford’s production of the Pinto. During the production of vehicles, they go through a series of steps beginning with prototype development. After prototype development and before the car is able to be released on the market, they must sustain a range of test to make sure the vehicle meets and is in accordance with all motor safety guidelines. Ford...
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...Ford Pinto Case In the late 1960s Ford Motor Company developed the idea of the Ford Pinto. Foreign automobile such as Germans and Japanese manufactures dominated the small car market. Ford Motor Company did not want to stay behind in production. Chief Executive Officer, Henry Ford II and Lee Iococca’s rushed building new compact cars out in the market within two and half years which, was the Ford Pinto and the shortest production planning. Production and distribution of the 1970s Ford Pinto stirred controversy regarding safety concerns. Ford’s desire to compete with the foreign manufacturers led Ford to overlook known design flaws and their own ethics while in search of higher profits. Ford assigned a team of engineers to work on nothing but the Pinto. This team was required to stick to Iacocca’s goal of “the limits 2000”; this meant that the car could not weigh more than 2000 pounds. This became a challenge for the engineers and created concerns regarding the placement of the fuel tank. Because of the accelerated production the testing was not done thoroughly. Out of 11 Pintos subjected to rear end collisions, eight failed the test. Only the three with baffles between the tank and bumper and a special interior tank lining met safety standards. The project was almost complete, and it was not possible to make redesign revisions and meet the deadline for the release of the Pinto. The car met the requirements for the American public. It was not long before...
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...of a popular and affordable vehicle, the Pinto. The vehicle is perfect for the tight budgeted and built by a trusted company (Ford). Then the unexpected happens, it is in a rear end accident. Upon the accident the car explodes. Sounds like a bad dream, right! (See video link in PowerPoint presentation) The following discusses a similar story that will from here forward be in reference as the Pinto Case, in which Ford was accused of being at fault for selling a shoddy car to the public. Were they at fault? What was the ethical dilemma? What were the social pressures? All of this and more is here within in detail. Pinto Case Study When Ford Motor Company had to determine what action to take in regards to the pinto many considerations were made. The company had to decide whether to install a baffle on the Ford Pinto to prevent the possibility of a puncture in the gas tank by a bolt from the bumper. The issue was found during a test done after the car was in production and on sale in the U.S. The gas tank is in the back of the car. During a rear-end test it was found that if a car travels more than 20 miles per hour and is hit from behind it is possible that a bolt from the bumper can puncture the gas tank. This can cause an explosion. Ford had the choice to install a baffle, which goes between the bumper and the gas tank, or spend $6.65 to $11 on each car, totaling $20.9 million. The other choice was to keep the Pinto as is and deal with the lawsuits that arose...
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...Business Research Ethics Diane Gutierrez RES/351 September 30, 2015 Gwenn Grondal Business Research Ethics Ethics in business research is not always a black and white issue. What is legal may not necessarily be ethical and the same can be said for the opposite. Careful consideration should be taken when conducting business research as both good and bad things may be discovered, and remaining ethical in your findings and how you apply it to your business, could invariably save your business far more than money. Here we will explore the ethical decisions made by Ford Motor Company after research found their Ford Pinto to be unsafe in rear-end collisions. In an effort to beat out strong foreign competition from in the small car market, Ford Motor Company produced the Ford Pinto in 1970. Before this time, Ford dominated in the production of larger vehicles and never was considered a contender in the small car market. Lee Iacocca wanted to change this, as Europe had made fast strides to match America in the automobile market by 1970. Europe and Asia benefited from the small car market, as it was easier to ship vehicles and thus expanding their business into other countries and making them very popular in the world market. America was limited in their ability to expand their current market to other countries, as shipping these excessively larger vehicles was not practical. America could only expand business to Canada and Mexico, so the Ford Pinto would be an important...
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...Ford Motor Company Pinto Case Karen Nollet, Alonso Miller, Michael Morra, Pamela Tenori MGT/216 Abstract In 1971, Ford Motor Company (FMC), on the advice of then vice-president Lee Iacocca, introduced the first subcompact vehicle, the Ford Pinto. After production, Ford discovered a defect in the design on the fuel system; the gas tank was placed in the rear of the vehicle. This error could cause the vehicle to explode on low speed rear end collisions. Ford conducted a risk/analysis to determine whether to recall the vehicles or leave the situation as is and suffer the consequences as they arise. After concluding that the vehicles could be modified for $11 per vehicle, Ford decided not to recall the vehicles. Based on their risk/analysis the cost to recall the vehicles sold would be $137 million, Ford determined that it would be more profitable to leave the vehicles as is and pay out costs in lawsuits because this figure adjusted to $49.5 million, substantially lower than the cost to recall the product. Ethics and morals would appear to be ignored for profit and gain. Ford Motor Company Pinto Case Ford Motor Company Mission Statement (1996), “We are a global family with a proud heritage passionately...
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...Ethics Keith A. Bates Sr. MGT/498 4 April 2012 Richard Rignall Ethics Ethics and Social Responsibility in Developing a Strategic Plan Ethics are values that guide personal thoughts and actions in knowing right from wrong. Personal conduct and behavior is based on how the individual views unethical behavior. Social responsibility is the company, management, and employees working and conducting themselves by following rules of society. Companies that include ethics and social responsibility into the company's mission and vision statement have a greater chance of succeeding. Ethics is based on an individual's actions. These individual actions affect the business. Adelphia, one of The United States largest cable company, failed because of poor leadership. Leadership at Adelphia did not conduct business in an ethical fashion and these actions created an atmosphere of greed and corruption, which resulted in prosecution and jail time. Companies have a responsibility to the society that the company serves. Successful companies are organizations financially responsible, but do not place profit above social responsibility. Companies that demonstrate their commitment to society and consumers create an atmosphere where the consumers will return. Consumers need to feel safe with the products they purchased and have faith the company is responsible in the product design, pricing, and consumer safety. Corporations should consider their community and residents when formulating the strategic...
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...Ford Pinto: An Ethical Inferno Michael W. Daniels Excelsior College Introduction and Analysis “Pinto crashes caused the death and mutilation of 900 occupants after their cars burst into flames after rear-end collisions,” Robert Sherefkin explains in his article Lee Iacocca's Pinto: A fiery failure. The engineered design of the Ford Pintos resulted in the gas tank rupturing in low speed rear end collisions. The design flaw was recognized early in the Ford Pinto’s production. According to Dowie’s article Pinto Madness. Mother Jones, “Internal company documents in our possession show that Ford has crash-tested the Pinto at a top secret site more than 40 times and that every test made at over 25 mph without special structural alteration of the car has resulted in a ruptured fuel tank.” Dowie then explains how more than a quarter of those tests were performed prior to the initial release of the vehicle. It was estimated that just 11$ upgrade per vehicle would have remedied the problem (Dowie, 1977). On June 10, 1978, almost a decade after the first Pinto was built, Ford eventually agreed to recall the Pinto (Boyce, D, 2012). The decision was made after countless lawsuits over a span of eight years drained the Ford Motor Company of millions of dollars. The company’s President Lee Iacocca could have rectified the design flaw but deemed it too late in production to reconstruct the vehicle. His requirement of the car weighing less than 2000 pounds and cost of under...
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...an organization to disclose what he or she believes to be wrongdoing in or by the organization” (Griffin). How does one choose if wrongdoing has happened in a utilitarianistic view? To present the process of utilitarian theory in a whistleblowing case, I ran across documentation referencing Ford Motor Company’s manufacturing of the Ford Pinto the early 1970’s. Petersen and Farrell discuss the ethical dilemmas faced by engineers highlighted by the 1980 Winamac, Indiana trial of Ford Motor Company (1986, p.3). The Pinto was created as a response to the Japanese competition emerging in the US. Due to competition, Ford was eager to get the subcompact car released in 1971. Changes were made, and Ford was able to reduce the lead time of production by a year and a half to get the car on the road. Frank Capps, a principal design Engineer charged that management’s weight and price goals along with time requirements resulted in engineers having to place band aid fixes to problems that emerged during testing. Capps raised issues from the safety tests in a series of letters to upper officials and was demoted in his position. Another engineer was fired for a whistleblowing event unrelated to the Pinto fuel system error, but ended up testifying in later years as a witness for one of the burn victims based from knowledge he had. Griffin states...
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...not quarrel over the importance of profits. But they do quarrel over whether or not business firms have obligations beyond making profits. A consumer may be a pet owner who feeds and provides care for a beloved animal, a doting grandparent who buys toys and clothes for the grandkids, an individual who wears contact lenses or hearing aids, a patient who buys prescription medications, or vehicle owner. Should a consumer have certain expectations from the suppliers and producers of the products that he buys? Can we trust corporations that they will not produce what will jeopardize the human life? Was Ford to be blame in the pinto case? Must we wait for the characters like “Erin Brokovich” to fight on behalf of the helpless consumers? Who is to be blamed for the McDonald’s hot coffee case-the producer, the consumer or the regulators? Almost thirty years has passed since the Pinto accidents and what followed from it. We still don’t know how “safe” a...
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...Managing Product Safety: the Ford Pinto Summary: Around 1967 Ford Motor Company decided to design a small size car called the Ford Pinto. The automobile industry at the time (and still is) was highly competitive and very cyclical. In the late 1960's, America began to see the influences of foreign vehicles. Facts Around 1967 Ford Motor Company decided to design a small size car called the Ford Pinto. The automobile industry at the time (and still is) was highly competitive and very cyclical. In the late 1960's, America began to see the influences of foreign vehicles. Prior to that, cars were bigger and less fuel efficient, allowing the Japanese to gain substantial market share with the smaller, more economical vehicles, and the need to react to this pressure was even greater at Ford. Even though they held the number two spot in market share behind General Motors, they only held a 22.3% market share compared to General Motors at 46.4%, a very significant difference. There was strong competition for Ford in the American small-car market from Volkswagen and several Japanesecompanies in the 1960's. In order for Ford to stay competitive and fight off competition, they rushed its newest car the Ford Pinto into production in much less time than is usually required to develop a car. The regular time to producean automobile was 43 months; Ford took only 38 months. Before production, the engineers at Ford discovered a major flaw in the cars' design. In nearly all rear-end crash test...
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...Business Case (The Ford Pinto) There was strong competition for Ford in the American small-car market from Volkswagen and several Japanese companies in the 1960's. To fight the competition, Ford rushed its newest car the Pinto into production in much less time than is usually required to develop a car. The regular time to produce an automobile is 43 months but Ford took 25 months only (Satchi, L., 2005). Although Ford had access to a new design which would decrease the possibility of the Ford Pinto from exploding, the company chose not to implement the design, which would have cost $11 per car, even though it had done an analysis showing that the new design would result in 180 less deaths. The company defended itself on the grounds that it used the accepted risk-benefit analysis to determine if the monetary costs of making the change were greater than the societal benefit. Based on the numbers Ford used, the cost would have been $137 million versus the $49.5 million price tag put on the deaths, injuries, and car damages, and thus Ford felt justified not implementing the design change (Legget, C., 1999). This was a ground breaking decision because it failed to use the common standard of whether a harm was a result of an action on trespass or harm as a result of an action on the case (Ferguson, A., 2005). From reading this case, we realize the company did not apply the managing ethics competency in building its goals and structure. Managing ethics competency involves the overall...
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...Utilitarianism and Business Ethics INTRODUCTION Welcome to philosophicalinvestigations - a site dedicted to ethical thinking (rather than one page summaries!!! Though I'm afraid I do add those at exam time - market pressures!). I hope you enjoy this case study which also has a powerpoint that goes with it. There's plenty of other useful material on this site - case studies, handouts, powerpoints and summaries, and also I have written a number of books including best-selling revision guides and a useful book on 'How to Write Philosophy Essays". Click here for details. If you're worried about exams you might at least print out my strengths and weaknesses summaries under each moral theory. I deliberately quote only from my five favourite ethics books, click here to find out which they are - because you might like to buy one of them to supplement your study. Of course, it's important to quote the philosophers themselves in their own words - see my handouts, or for what academics say about them - see the key quotes section under the topic area of each moral theory. And if you'd like to blog on anything in the news send it to me - I'd be delighted to read it and - if it fulfils the criterion of good ethical thinking (!), post it!!!!! Utilitarianism is a normative, consequentialist, empirical philosophy which links the idea of a good action to one which promotes maximum pleasure or happiness, found by adding up costs and benefits (or pains and pleasures). It has two classic formulations...
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...The biggest influence on the decision to implement the baffle comes from a human element that seems to be missing from Ford’s decision. Human life is priceless, but Ford did manage to place a number on it. The loss of life is enough external pressure to influence the recall of the Pinto and add a part that cost less than a trip to the movies. “One Ford engineer, when asked about the dangerous gas tank said, “Safety isn’t the issue; trunk space is” (De George, 2005, p. 116). The Ford Company did not operate with a concern for the people. Instead of placing the safety of consumers at the top of the list, Lee Iacocca placed profit and competition above all. “As Lee Iacocca was fond of saying, “Safety does not sell” (Newton & Ford, 2008, p. 297). Recalling the cars did not seem to be of any concern and losing money is not an option. The company was not short on resources. They had the information, the materials, and the know-how to produce a safe vehicle. The consumers deserve to have a product that is safe and affordable. Unfortunately, the powers at the top did not take into account what the consumer thinks. The risk/benefit analysis was a large part of the decision to avoid the recall. This would place a dollar amount on human life. It would cost the company more to fix the problem than to save a number of lives. “When someone dies as a result of a dangerous product, unsafe treatment or negligent corporate behavior, we can't measure how much the deceased person...
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...PINTO FIRES CASE The assumption that ‘it’s easy to be ethical’ assumes that individuals automatically know that they are facing an ethical dilemma and that they should simply choose to do the right thing. But decision makers may not always recognize that they are facing a moral issue. Rarely do decisions come with waving red flags. Dennis Gioia was recall coordinator at Ford Motor Company in the early 1970s when the company decided not to recall the Pinto despite dangerous fires that were killing the occupants of vehicles involved in low-impact rear-end collisions. In his information and overloaded recall coordinator role, Gioia saw thousands of accident reports, and he followed a cognitive “script” that helped him decide which situations represented strong recall candidates and which did not. The incoming information about the Pinto fires did not penetrate a script designed to surface other issues, and it did not initially raise ethical concerns. He and his colleagues in the recall office did not recognize the recall issue as an ethical issue. From the standpoint of Hooker’s test, we will start with the geralizability test. Hooker (2011) states that to pass generalizability, it must give the reasons for an action have to be consistent with the assumption that others who have the same reasons act the same way. To release the Pinto as scheduled and risk the safety of those who purchased it or spend more time designing the car, thereby seceding more of the subcompact...
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