WEEK 3: EGOISM, UTILITARIANISM, AND COST-BENEFIT ANALYSIS Preparation: At the beginning of class students will need to submit a one-page summary of the following readings: Hoffman, D. (2004) ‘The Ford Pinto’, in Gini, A. (ed.) Case Studies in Business Ethics (5th edn.), Upper Saddle River, NJ: Pearson Prentice Hall, pp. 222 - 228. Kelman, S. ‘Cost-Benefit Analysis: An Ethical Critique’ and Leonard, H. & Zeckhauser, R. ‘Cost-Benefit Analysis Defended’ in Hoffman et al. (2001) Business Ethics:
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Means end chain Consumers buy a product for a reason. Sometimes the reason is practicality and sometimes it relates to vanity. The means-end chain is a tool that marketers use to decide why people are buying what they are buying. In my opinion, it is a tool that helps them decide what attributes of a specific product draws in the consumer and how the product makes them feel, both good and bad, both functional and emotional and the overall value the consumer feels. From start to finish, this
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The Ford Pinto Ethical Dilemma Written by Learning Team B; C. Riley, F. Foster, K. Jankoski, M. Riner, & R. Price Organizational Ethics and Social Responsibility 16 Aug 2010 Paul A. Kramer The Ford Pinto Ethical Dilemma In this presentation, a very important case that transpired from 1971 to 1978 with the Ford Motor Company, under the leadership of Mr. Lee Iacocca, CEO will be explored. During that time the CEO of Ford wanted to manufacture a vehicle to keep up with the competition
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vehicle having to pay millions of dollars in lawsuits. This was due to their negligence in not following the proper inspection procedures. It will be observed how this company was affected by the ethical and unethical issues regarding the Ford Pinto along with Ford and the Department of Transportation being the blame for every accident that transpired for not following the normal inspection procedures. A comparison of utilitarianism, deontological and virtue ethics in whistle blowing will be discussed
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El caso del ford pinto A finales de los años 1960’s los autos americanos perdieron su mercado por la venta de autos japoneses ya que estos eran mas económicos. En 1971 Lee Iacocca un CEO de Ford Motor quiso construir un auto para poder competir. Le ordeno a la compañía la construcción de un auto que no pesara más de 2,000 lbs. Y que su costo no pasara de $2,000.00. De esta idea nació el Ford Pinto. Por la prisa de querer terminarlo pronto, la producción del auto se logro en 25 meses cuando lo
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production of Pinto regardless the defects and the danger to future customers, or delay the production and modify the original model to assure safety and reliability, regardless the higher costs? Ford’s decision was to continue the production of the defective design while basing it on a cost-benefit analysis. In this context another dilemma was created: should such an analysis be used in situations where defects could lead to death or cause tremendous harm, such as in the Ford Pinto situation?
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1. What moral issues does the Pinto case raise? That businesses should not be putting a value on human life and disregard a known deadly danger. Ford thought they could get away with a dangerous automobile by paying off those lawsuits from people who were injured and the families of the dead. Ford thought it was more cost effective not to fix the dangerous condition than to spend the money to save people. 2. Suppose Ford officials were asked to justify their decision. What moral principles do
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In the case of the ford pinto Lee Iacocca wanted to produce a car to meet with the competition of the Japanese market. The car was to be designed and produced in a condensed time 25 months vice the 43 which would have been the usual. Ford motor company completed the task. At the time there was not a standard from the national highway traffic safety committee as to a rear-end impact, that requirement was not in place until after production. I find Ford was not acting un-ethical in the design and
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Case Review #1: Ford Pinto 1.) FACTS • Ford was aware of gas tank defects on their Pinto model • Ford ignored the safety concerns, positing “safety doesn’t sell” (p. 66) • Ford based their decision off a cost-benefit analysis o Determined the “cost” of trunk alterations outweighed the “cost” of enhanced safety • There were over 40 incidents involving Pinto passengers dying or being severely maimed 2.) ETHICAL ISSUES • Is it morally right to sell a car with known, potentially fatal, defects
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THE PINTO CASE A SHORT SUMMARY In the early 1960s Ford’s market position was being heavily eroded by competition from domestic and foreign manufactures of subcompacts. Lee Iacocca, then President of Ford, was determined to regain Ford’s share of the market by having a new subcompact, the Pinto, in production by 1970. Then Ford engineers crash tested an early model of the Pinto. They found that when the automobile was struck from the rear at 20 miles per hour, the gas tank regularly ruptured. Stray
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