The Pinto Case: Ethical Leadership

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Table of Contents

Introduction
Case Overview
Ford’s Ethical Position Point during the Pinto Incident
My Point of View on Ford’s Position
Ford Employee Moral Dilemmas and the Ethical Succession Perspective
Organizational Citizenship
Conclusion
References

Introduction

It is important to note that motor vehicles are often involved in road accidents, which cause injuries and fatalities. Accordingly, automobile manufacturers must comply with basic safety standards in order to increase their reliability. However, there are cases when companies try to generate significant profits and neglect the safety of people using their products. Thus, it is essential to analyze the case of Ford Pinto and identify the ethical practices that have been violated.

Case Overview

The events occurred in 1978 when a car accident caused the deaths of three adolescents on a highway near Goshen, Indiana. The tragic event occurred when sisters Judy and Lynn Ulrich and their cousin Donna Ulrich were driving a Ford Pinto when a van slammed into the car’s rear. The Ford Pinto burst into flames after hitting the gas tank, leaving the sisters no chance of survival (Hoffman, 1966). As a result, an investigation was launched, and an Elkhart County grand jury convened, which spent twenty weeks investigating the circumstances of the case and indicted Fora for murder.

From the perspective of Elkhart County, the arguments in court were based on the fact that the company knew about possible defects in the cars and failed to comply with accepted safety standards. Accordingly, Ford neglected the safety of the vehicles in order to choose a design and placement of the gas tank that would be convenient for people and allow the company to generate more profits (Hoffman, 1966). At the same time, the lawyer defending Ford’s interests raised objections. Ford’s position was based on the fact that they had researched the cars before they were released to the mass market and found that they met safety standards.

Ford’s Ethical Position Point during the Pinto Incident

It is essential to notice that even before the Ford Motor Company’s court case, there were various opinions about the safety of the Pinto car. Therefore, the company had calculations prepared, which it used as evidence to cope with the incident (Hoffman, 1966). Ford adopted a utilitarian approach to decision-making in analyzing and dealing with the Pinto incident. In this ethical decision-making model, the company’s decision is based on the most significant common advantage for society (Ferrell & Fraedrich, 2021). In this case, Ford calculated the cost of redesigning Pinto’s fuel system and the potential cost of settling lawsuits resulting from accidents.

Based on its ethical position, Ford conducted a cost-benefit analysis that weighed the potential costs of redesigning the Pinto against the potential accidents caused by the existing design. The firm estimated that the redesign price would be approximately $11 million per vehicle, amounting to about $137 million over the entire production cycle (Hoffman, 1966, p. 4). In contrast, Ford estimated that each injury or death caused by a Pinto crash would cost the firm about $200,000 in legal costs (Hoffman, 1966, p. 4). From these calculations, the company concluded that staying with the current design would be financially wiser.

Under a rights-based approach, Ford would have recognized the inalienable right to safety for its clients and made modifications to the design to assure that the Pinto provided the safest possible protection. An equitable approach would prioritize a fair distribution of benefits and burdens, which could lead to a design change that would benefit society, not just the company’s bottom line (Ferrell & Fraedrich, 2021). Ford may have applied an alternative ethical perspective that includes the virtue approach and the care approach. According to the virtue approach, Ford would have recognized that the firm has a moral obligation to act with integrity and make design choices that put human safety first. A caring approach would prioritize compassion and empathy for customers and their security rather than focusing solely on financial considerations.

My Point of View on Ford’s Position

I disagree with the position of Ford, which was taken during the Pinto case. The reason is that the company’s management did not follow the practice of transparency and did not warn potential car owners about the possible risks (Hoffman, 1966). I also think that Ford did not prioritize safety over financial gain, which is unacceptable for a company that is one of the market leaders. Moreover, the company did not take into account the interests of other car owners who, after the publicity surrounding the incident that led to the deaths of three teenagers, began to fear for their lives.

Nevertheless, if I were the head of Ford, I would take a deontological ethical point of view. This is because a company of this size cannot suffer significant reputational losses, as it did after the Pinto incident (Hoffman, 1966). Therefore, the point of view that focuses on the moral rules and duties that a person has is acceptable for Ford. From this point of view, I would prioritize the safety of the company’s customers and other stakeholders over making significant profits.

Accordingly, I would change the unsafe design of the Pinto to ensure that it meets safety standards, regardless of the financial cost this would cause. This would help to create and maintain the reputation of Ford vehicles as reliable and safe and, in the long run, improve profits. I think that the company has been operating with a low level of morale. The Pinto incident characterized the company as pursuing only its own interests, meaning that it valued increasing profits above any human cost (Hoffman, 1966). In particular, they acted at the pre-conventional level, at which decisions are made solely based on potential rewards and not on considering the broader ethical implications of their actions.

Ford Employee Moral Dilemmas and the Ethical Succession Perspective

In terms of their level of moral development, individual contributors and middle managers at Ford may have operated at different levels. Some individuals may have performed at the pre-conventional level and prioritized self-interest, while others may have served at the conventional level, prioritizing norms and values (Ferrell & Fraedrich, 2021). In this way, people who tried to follow moral rules faced ethical dilemmas. For example, some Ford engineers who were aware of the safety problems associated with the Pinto may have tried to oppose the decision to release the car without changes to the design. However, their concerns were dismissed, and they eventually agreed with the decision to prioritize financial considerations.

Similarly, middle-level leaders at Ford may have found themselves in a difficult position where they were pressured to meet financial targets, even if it meant ignoring safety issues. Overall, the ethical dilemmas faced by individual contributors, followers, and middle managers at Ford highlight the complex nature of ethical decision-making in organizations. From an ethical imitation perspective, individuals who favor the greater good and act in the organization’s and its stakeholders’ best interests would operate at a higher level of moral development (Ferrell & Fraedrich, 2021). These people would be willing to challenge authority, take personal responsibility for their actions, and strive to create positive change in the organization. In general, following ethical principles requires people to act honestly, courageously, and responsibly in challenging conditions and to prioritize societal values over company profits.

Organizational Citizenship

It is crucial to recognize the following components of organizational citizenship. First, altruism implies help and support in the workplace without the desire for personal gain. Second, it is a civic virtue that presupposes the willingness of employees to participate in and control equality in the organization (Ferrell & Fraedrich, 2021). Third, integrity means following the rules of work ethics and providing quality work. Fourthly, sportsmanship means accepting successes and failures in the workplace and being willing to change. Finally, civility means maintaining positive behavior between colleagues. In the Ford and the Pinto incident case, the company demonstrated a lack of organizational citizenship by prioritizing financial considerations over safety concerns (Ferrell & Fraedrich, 2021). Ford staff at various organizational levels also showed failing corporate citizenship.

Regarding the four stages of the maturity scale, Ford would be at stage three, where the problem is publicly known and the organization actively responds. Ford had already been indicted grand jury at this stage and faced significant public scrutiny and legal consequences. However, the organization struggled to address the situation and regain the public’s trust effectively (Ferrell & Fraedrich, 2021). If I had been Ford’s leader at the time of the case, I would have set goals such as prioritizing safety over profit, creating a code of conduct, conducting regular audits, and encouraging organizational citizenship. This action would have enhanced the company’s ethical perspective.

Conclusion

In summary, the Pinto case analysis emphasizes the importance of ethical leadership in organizations. In addition, the case highlights the importance of organizational culture in shaping employee behavior. Furthermore, this case demonstrates the importance of moral development for ethical decision-making. I learned about the importance of ethical decision-making processes in organizational behavior. It is crucial to involve multiple perspectives and use a comprehensive approach to decision-making that considers both the short-term and long-term consequences of actions.

References

Ferrell, O. C., & Fraedrich, J. (2021). Business ethics: Ethical decision making and cases. Cengage learning.

Hoffman, W. M. (1966). Case study the Ford Pinto. Corporate Obligations and Responsibilities: Everything Old is New Again, 222-229.

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