1. Put yourself in the role of the Recall Coordinator for Ford Motor Company in
ID: 343744 • Letter: 1
Question
1. Put yourself in the role of the Recall Coordinator for Ford Motor Company in the Pinto Case study; (a) What is cost-benefit analysis and is it appropriate where human life is part of the cost calculation? (b) How would Milton Friedman (profit maximization) view cost-benefit analysis in this situation? How would Ed Freeman (stakeholder) view it? How about the Golden Rule, would there be a different result? (c) Where do you draw the ethical line on product safety?
2. In the Pinto case study, as the Recall Coordinator: (a) Identify the ethical issues and ethical conflicts and who are the affected parties (stakeholders)? (b) What decision would you make? Which theory would it be based upon - the consequential (utilitarian) or the deontological (Kant's Categorical Imperative) and what would be the consequences of your decision?
3. What conditions would have to be present for you to blow the whistle about unethical conduct you observed at work? How would you go about it by identifying the specific steps you would take. What are the implications (risks) for you?
4. Ninos and Ninas, Inc. is an adoption agency in Massachusetts that specializes in speedy adoptions of poor Hispanic-American infants. These poor infants, if not adopted, would end up abandoned on the street or malnourished in orphanages because their mothers cannot afford to care for them. The adoption fee charged by the agency is $15,000. Linda and Andrew have been accepted for adoption by the agency with a deposit of $10,000. Soon thereafter, Carmen, the agency's director of adoption services, informs Linda and Andrew that a baby girl is now available. She instructs them to place in a post office box the final $5,000 fee payment and an additional, separate $2,500 in cash in an envelop, marking the envelope with cash for "senior Jose." Carmen further explains that once they have paid the $5,000 adoption fee balance and additional cash payment, they can come to the agency the next day to pick up the little girl. When Linda questions the additional odd cash payment, Carmen tells her Senior Jose is an official in the social agency who handles adoptions and it is the way Ninos and Ninas Inc. has been doing business for 10 years. How would you characterize the additional cash payment and does the adoption benefit to the infant girl justify the method for accomplishing that benefit?If you were Linda, would you go forward with the adoption? What ethical and/or moral theories would help in your decision?
iguzine called it one of the ILIOMS that helped create the business world as it is today."2 According to Fortune, the case and ensuing legal batles contributed to the develop- ment of consumer activism as well as to the consumer protections and class action lawsuits that we now take for granted. We have also seen aspects of the case play out in more recent product safety cases CASE PINTO FIRES by Dennis A. Gioia (used with permission) On August 10, 1978, three teenage girls died horribly in an automobile accident. Driving a 1973 Ford Pinto to their church volleyball practice in Goshen, Indiana, they were struck from behind by a Chevrolet van. The Pinto's fuel tank ruptured and the car exploded in flames. Two passengers, Lynn Marie Ulrich, 16, and her cousin, Donna Ulrich, 18, were trapped inside the inferno and burned to death. After three attempts, Lynn Marie's sister, 18-year-old Judy Ann, was dragged out alive from the driver's seat, but died in agony hours later in the hospital.Explanation / Answer
Respected Student,
Q1]
a) If the design of fuel tank is changed then there are cost as well as benefits associated with it.Cost in terms of expenditure company has to do make the fuel tank much more safer from low speed rear end collisions as it was becoming menance on human life.
Improvement: $11 saftey improvement in all the models having fuel tank issue.
Cost:
Sales: 11 million cars and 1.5 million light trucks
Unit cost: $11 per car & $11 per truck.
Cummulative cost: 11x11+1,5x11=121+16.5= $137.5 million.
Benefits:
Savings:180 burn deaths,180 serious burn injuries,2100 burn vehicles
Unit benefits: $2,00,000 per death,$67,000 per injury, $700 per vehicle
Cummulative benefits: $2,00,000x180+$67,000x180+$700x2100=$49.5 million.
The cost outweigh the benefits by 2 to 3 times but it is not at all appropriate to go ahead with such a decisions as everything we do in this world for betterment of human life and if that is at stake then this kind of decisions must not be persued for short or medium term mileage in market share as it will dent image/brand hugely in larger time span and case was also depicting that within 7 to 8 years huge outcry started coming from all the stakeholdres of society.
b) Milton Friedman would view it from the angle of huge increase in sales and hence profits in smaller segments vis-a-vis German competition specifically and Japanese as they were enjoying good sales in mid and heavy segement till 1970.
Ed Freeman would view it from the angle of ethical dilema that what to go ahead if to decide between profit maximization and human and societal loss and one should give prime importance to human life as ultimately everything is for the betterment of human being.
Humanists try to embrace the moral principle known as the 'Golden Rule', otherwise known as the ethic of reciprocity, which means we believe that people should aim to treat each other as they would like to be treated themselves – with tolerance, consideration and compassion.
And if we go by golden rule the decision taken by Ford at the start of 1970's was not at all appropriate as there was no tolerance,consideration and compassion in the decision between trunk space and fuel tank positioning as well as design of fuel tank.
C) The line has to be drawn between profit maximization and ethical aspects of business and one should never cross that even for an iota of decision.
Here 11 cars were tested for rear crash at low speed of 31 miles per hour at fuel tank and 8 failed and 3 servived the rear crash but additional saftey measures were incorporated in 3 cars.
The above tests were conducted under the guidelines established by Federal Motor Vehicle Saftey Standard 301 which was proposed in 1968 by National Highway Traffic Saftey Standards but not officilaly adopted until the 1977 model year as litigation were going on in the court.
It's a big question mark(?).
So, clear cut case of advertendly neglecting the human dimension in this case.
Q2]
a) The ethical issue is clear and categorical whether to go ahead with such kind of decisions which involves a loss of human life.
The ethical dilema is between the profit maximization and cost associated if changes would have benn incorporated in the fuel tank design.
b) I would not go ahead with such a product in the market and my decision would have been based on dentological(Kant's Categorical Imperative) that it's a clear cut violation of the social responsibility of any business with refrence to all the stakeholders namely customer,Governemnt,Judiciary,employees, & media.
The short term pain of 2 to 3 years is not at all big issue as product would have been appropriate in all terms by 1974/75 and till that time company could have focused on mid and large segment and tried to encash that image which was very good till 1968.
The cross financial support is always there in businesses running under one umbrella.
Q3]
If i would have taken the decision any way whether my bread butter was involved or not or i could have been at influential position or not.
I would taken the following points:
I would have got job on my own strength in market and i would have been put my case strongly if sacked.
At least projected human loss with high probability could have been prevented.
Regards.
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