Case Study of Hoffman Pinto

free essayCompliance with the laws and regulations and upholding high ethical standards is essential for all businesses. However, for manufacturing companies it comes with additional challenges. This is because the operation of a manufacturing line carries with it the potential of harming the consumers. There exists a possibility that the manufactured products may be unsafe for the market. This specifically makes the application of ethical practices a vital aspect in the manufacturing industry.

Events that Caused the Grand Jury Indictment of Ford

The chain of events that led the grand jury to prosecute the Ford Motor Company for criminal charges began with the deaths of three teenagers on August 10, 1978. The three young people in question were driving in a 1973 Ford Pinto, which stopped on the US Highway 33 near Goshen. They were hit from the rear by a speeding van, causing the Pinto’s gas tank to rupture. The car burst into flames, thereby killing the three teenagers. As a result, a local prosecutor Michael Constantino moved to persuade the grand jury to impeach the Ford Motor Company on the grounds of deviation from the acceptable code of conduct. This means that they had knowingly disregarded the safety risks posed by the placement and design of the Pinto’s gas tank.

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Perspectives of the Trial

It is quite evident that the Ford Motor Company acted with undue haste in marketing its Pinto model. This action ignored the fact that the company was aware, through their own tests, that the rear-end assembling of the model was highly vulnerable to collisions. These included collisions from the rear end at speeds ranging from 18 to 20 mph. In spite of this, they were reluctant to change the position of the gas tank because such a move would have resulted in increased costs for them. It would also have meant a change in the design of the whole rear part of the car as well as a reduced amount of luggage space in the car. Instead, the corporation lobbied for the delay in implementing safety standards. In effect, the company was prepared to sacrifice safety precautions that could save many lives for corporate profit.

Ford Motor Company

Despite the fact that the Pinto model did not meet the rear-impact tests at 20 mph, it did not pose more safety risks than other cars of the same class during that era. The company stated that it had set an internal performance goal for itself when experimenting with rubber bladders. This entailed protecting all their manufactured cars’ gas tanks so as to identify the best way for them to meet the 20 mph rear-collision standard. This also included a special focus on the company’s future cars, which they were planning to manufacture. As such, the company argued that it had already met the current government’s own rear collision standards. It would, therefore, be unfair for a court to rule that their vehicle was unsafe just because it failed to meet the standards that had been proposed for the company’s vehicles and also because its specifications did not mirror the technology that was going to be introduced in the later models of the car.

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Ethical Perspective Followed by Ford in Handling the Pinto Incident

In dealing with the ethical dilemma that the company was faced with, its management followed the perspective of ethical relativism. This basically meant that the company acted in a manner that served their own self-interests. As such, the company was already aware of the potential dangers that the gas tank’s position posed in the case of a rear collision. Instead of focusing their efforts on repositioning the tank for the safety of their customers, they acted in their own self-interest and hid behind the excuse of the government not having standards such as the standard 301 of the Federal Motor Vehicle safety standards. The standard was developed to protect drivers from immense physical harm in the event of a crash. However, in a real sense it was the same company that lobbied for the delayed implementation of these standards.

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The Analysis Ford Adopted in Developing Their Ethical Position

The Ford Motor Company adopted a cost-benefit analysis in coming up with their ethical position. This was evidenced by an analysis that was released by Ford dubbed the fatalities associated with crash-induced fuel leakages and fires. This report compared the costs that the company would have to incur in order to make changes to the gas tank’s position to the benefits attained in the form of compensations for the consequences of car crashes. According to them, the analysis revealed that incurring the costs would not be effectively beneficial for society. Furthermore, redesigning the vehicles would make the vehicles unattractive for potential buyers, which would also have had a detrimental effect on the sales of the cars.

Ethical Decision-Making Process Ford could have Used

Once the company had identified the defect in the Pinto model, the best approach would have been to define the requirements for a solution first. This would have been followed by designing the solutions and implementing them. The company would then test the new design to ascertain that it was capable of meeting the required standards. Such standards if met would allow them to release the new design to the market. A repetition of this process would be necessitated if the pre-determined standards were not met. Following this decision-making process would have led the company to a different ethical decision, one that would reflect the high level of corporate responsibility and product liability.

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The Alternative Ethical Perspective Ford could have Adopted

Universalism Perspective

Universalism is an ethical perspective that invokes a sense of duty. (Beauchamp et al., 2009) It is the opposite of ethical relativism as in dictates the interests of the people to be put first. Its implications suggest that one would only make a decision the same way that all other businesses make their own decisions without exceptions. Following this perspective would require that Ford put the safety of its customers first and reposition the gas tank of the Pinto model regardless of the costs they would incur. This would have guaranteed the evasion of criminal suits against the corporation.

Human Rights Perspective

This perspective dictates the entitlement of each person to human rights that at birth. It suggests that in carrying out business activities, the individual rights of people must be taken into consideration. Specifically, the right that was undermined by the actions of the Ford Motor Company was the right to choose. It is a right that would have allowed the consumers to make the gas tank much safer by installing the rubber bladder for a small fee. Following this perspective would mean doing away with the cost-benefit analysis that the company had adopted. It would have helped to protect the individual human rights by repositioning the Pinto model’s gas tank.

Personal Opinion

I disagree with the manner in which the Ford Motor Company handled this case. The company acted with total disregard to the ethical standards of society by putting their corporate profit goals ahead of human lives. I believe it would have been much easier to adjust the positioning of the model’s gas tank before pushing the new model to the market. It would not only cost roughly $11 for each car but increase the safety of the passengers in case of car crashes. Consequently, the company could have actually complied with both current and future standards of Federal Motor Vehicle Safety Standards. This fact alone could have increased the marketability of the model due to the high standards of safety that they could have advertised.

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Leadership Practices not Followed by Ford

Accountability

One of the bad leadership practices that led the company to their decision is the lack of accountability. Every corporation has an obligation to its customers to provide products that are safe for use and do not pose any immediate danger to their consumers. Ford demonstrated a lack of accountability to their customers by lobbying for a delay in the implementation of improved motor vehicle safety standards. Instead, they neglected the safety hazards posed by the positioning of the gas tank in the Pinto car model. This is so because their main focus was on profits rather than the safety of the consumer.

Co-Creating with the Business Partners

Co-creating primarily implies that the company holds the same stance as its partners do. This is connected to maintenance of high ethical standards, quality, and human rights, as well as compliance with the government laws and regulations (Ramaswamy & Ozcan, 2014). The partners here include other businesses, the employees, and the customers. Ford failed to uphold this quality by failing to maintain an honest relationship based on mutual trust with their partners, specifically the customers. It is evidenced by Ford’s decision to market the Pinto model despite their knowledge of the potential hazards it posed on the roads.

The Ethical Perspective I would Follow

As an executive of Ford, the universalism perspective would have been fit for application in such a situation. It implies that the interest of the consumer should be put first.  As such, the priority would be to ensure that the vehicle models released into the market meet or surpass the current vehicle standards and that all the potential safety threats regarding the product are at a minimum. This way, re-designing the rear part of the Pinto model would have been the first move once the problem was detected. This is because the consumers are the most important part of the business and as such, the company could not have gambled with their safety standards on the Pinto model.

Level of Moral Development Ford was Operating on

Based on the type of decisions made by Ford in dealing with the situations, their level of moral development would be classified as pre-conventional. At this level, the sense of morality is being controlled by an external rule of authority and actions are mostly based on the consequences they would bring ,while the reasoning is driven by self-interest (Spitzeck, 2009). In this case, Ford’s reasoning led them to the decision of ignoring the safety risks posed by the gas tank’s positioning. It illustrates a focus on self-interest, which was corporate profit.

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Dilemmas Faced by Individual Contributors and Mid-Level Managers at Ford

The engineers, as well as mid-level managers, were faced with a moral dilemma concerning the production of the Ford model. Specifically, the engineers were the ones who identified the problem during the pre-production crash test, which they explained to the top managers of the company. When the top managers of the company decided to produce the car despite the issue, the engineers had to decide whether to conform to the decision or act according to the universal ethical principles. It is evident that they decided to conform since no further adjustments were made to the car. This indicates that the conventional level of moral development drove their obedience to the authority and behavior and made them conform to the corporate order of decision making.

Ford’s Stage of Development

The Ford Motor Company can be placed in the growth/survival stage of development. At this stage, the business aims to generate new revenue and increase the number of customers. For the Ford Corporation, this meant the expansion into new markets to increase its profit margin. This is what prompted the company to venture into the small car market by producing the Pinto model. The model was meant to compete with the import of small cars, thereby saving jobs for Americans while at the same time making huge profits for its stakeholders.

Goals for Moving Forward as a Leader at Ford Corporation

The first goal would be to increase the level of corporate responsibility the company has by actually participating in the process of setting the motor vehicles safety standards and ensuring compliance. A complete overturn of the decision-making process with regards to introducing new models to the market would also be implemented. This would mean that the company would design prototypes of each new model, which would be tested for various standards of safety before the actual production could begin. Making adjustments would, therefore, be easier, as very little resources would be employed in making the prototypes.

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Conclusion

In light of the above, it is evident that ethical leadership practices and organizational behavior are some of the vital aspects of any business performance. This is because they play a huge role in the decisions made by corporate staff regardless of their position in the organization. I have come to understand that it is essential for companies to move beyond corporate compliance during their production and manufacturing process. As such, each person in the company should act in a manner that they feel is morally right and not just because they look to avoid the consequences. Additionally, as a company, ethical leadership does not involve making the toughest decisions for the sake of the company’s profits. Instead, the interests of its customers should be placed first in addition to meeting the required standards of practice.