It gives the people what they want. Case: The Ford Pinto; The Ford Pinto and the Dominant View; Reading: Friedman – The Social Responsibility of Business Is to Increase Its Profits; Understanding Friedman’s thesis; Friedman’s Justification for Stockholder Theory; Reading: Freeman – Managing for Stakeholders; Freeman’s Stakeholder Theory; Separation and Integration Though Ford was acquitted of reckless homicide in March 1980, the Pinto's reputation had plummeted disastrously; Ford … THE FORD PINTO CASE ... (categorical imperative) and favored consumers over company stakeholders (justice), including Which would be benefited by that delay? and perhaps the American automobile industry. Was the Pinto a case of deception or fraud? Later that year, General Motors recalled 320,000 of its 1976 and 1977 Chevettes for similar fuel tank modifications. The Grimshaw case was just one of more than one hundred lawsuits that were filed because of design flaws in the Pinto that resulted in fuel tank fires. Our objective in this module is not to give you an answer as to which of these theories is the better one. We know what they want because the consumers are expressing their preferences through the market. Ford Motor Company Case Study In this case study of Ford Motor Company my decision would have to lean towards a recall for many reasons but, mostly I believe saving lives and my customer service reputation as smart businessmen. It was behind the rear bumper, and when the car was rear-ended, the tank would rip, causing gas to spill under the engine. By 1977, new Pinto models incorporated a few minor alterations necessary to meet federal standards that Ford had managed to hold off for six years. Something went wrong. Their interests are best served by allowing them to produce cars as soon as possible, even if that car is not the best that could be made. Ford set an ambitious production deadline of 25 months. The early subcompact market was dominated by foreign manufacturers such as Volkswagen and Toyota. "Hell no," said an engineer who worked on the Pinto. Case: The Ford Pinto; The Ford Pinto and the Dominant View; Reading: Friedman – The Social Responsibility of Business Is to Increase Its Profits; Understanding Friedman’s thesis; Friedman’s Justification for Stockholder Theory; Reading: Freeman – Managing for Stakeholders; Freeman’s Stakeholder Theory; Separation and Integration Ford impacts these stakeholder groups through its business activities. Are the customers better served by having something in the market that they can buy, or by producing a car that is out of their fiscal reach? None of these protective devices was used. Free Essays on Ford Pinto Case Stakeholders . Between 1971 and 1978, the Pinto was responsible for a number of fire-related deaths. Adding to the pressure to ignore these safety costs was Lee Iacocca's stated goal that the Pinto was not to weigh an ounce over 2,000 pounds and not to cost a cent over $2,000. Case Study Of Ford Pinto. It certainly seems like something is wrong about building a car which has a known tendency to burst into flames when it is hit in the rear, but is that wrong a matter of deception or fraud? Later that year, General Motors recalled 320,000 of its 1976 and 1977 Chevettes for similar fuel tank modifications. Competing against the Japanese car manufacturers, which used to be considered as superior to the American ones in terms of product quality, the leaders of Ford decided to create a new vehicle known as the Ford Pinto. When we make the assumption that a car is safe, we are making that assumption in the context of a highly regulated market which requires many safety devices and systems that did not exist in the early 70s. Search. Would they have benefited from the safer Pinto design that was not produced? Grimshaw and Gray’s family filed a tort action against Ford, and the jury awarded not only $2.516 million to the Grimshaws and $559,680 to the Grays in damages for their injuries, but also $125 million to punish Ford for its conduct. His research interests include supply chain management and sustainable operations, and he teaches courses on Risk and Business Analytics. Rear end collisions caused the car to burst into flame. "That person would have been fired. These companies had more experience producing economical cars than their American counterparts. The stakeholders in this particular case include: Which of these stakeholders would be harmed by delaying the production of the Pinto? Perhaps Ford has a responsibility to make their research available, but perhaps the consumer has a responsibility to find out the risks they are taking when they make a purchase. There might have been fewer deaths and injuries from the Pinto, but it’s also probably true that there would have been fewer Pintos sold. Since the cost of the car is the primary draw for consumers, and Ford’s responsibility is to produce profits for their stockholders, Ford needs to keep the costs of design and production at very low levels. Safety wasn't a popular subject around Ford in those days. Ford Pinto Stakeholder Analysis  Ford Pinto Ethics Case Analysis Dickey L. Sours Jr. Business Ethics Course The Ford Pinto designs had the placement of the fuel tank behind the rear axle The fuel tank position has allowed the projecting bolts to puncture the tank when the vehicle was struck from the rear. When Ford was developing the Pinto, the company needed a low-priced car in a hurry to compete with Volkswagen and Japanese imports. Please check your entries and try again. It seems wrong, to many people, that we should sacrifice the lives and well-being of the customer for some extra profit for stockholders. Iacocca, a rising star at Ford due to his success with the Mustang, argued that Volkswagen and the Japanese were going to capture the entire American subcompact market unless Ford produced an alternative to the VW Beetle. The Ford employees (including the engineers) might not face any negative consequences from the delay. Ford engineers considered numerous solutions to the fuel tank problem, including lining the fuel tank with a nylon bladder at a cost of $5.25 to $8.00 per vehicle, adding structural protection in the rear of the car at a cost of $4.20 per vehicle, and placing a plastic baffle between the fuel tank and the differential housing at a cost of $1.00 per vehicle. In the end, a very small proportion of total Pinto-drivers were harmed by the potentially explosive car. The delays that they would face would keep the Pinto off of the market, they say, for a year. Gray died a few hours later. Grimshaw v. Ford Motor Company, 1981 The Pinto, a subcompact car made by Ford Motor Company, became infamous in the 1970s for bursting into flames if its gas tank was ruptured in a collision. It might very well be the case that consumers would have bought the car even if they knew that it had failed some safety tests or that it wasn’t the safest car on the market. The first and most important in my opinion would be the consumer, those buying the Ford Pinto. The tests that Ford did with the Pinto showed them that the car posed a danger to the occupants in certain situations, but Ford also knew that all cars could pose a danger to their occupants in some situations. © Michael Matteson and Chris Metivier 2020, Reading: Friedman – The Social Responsibility of Business Is to Increase Its Profits, Friedman’s Justification for Stockholder Theory, Reading: Freeman – Managing for Stakeholders, Module 3: Social Responsibility, Professionalism, and Loyalty, Corporate Social Responsibility and the Triple Bottom Line, Reading: Davis – Some Paradoxes of Whistle-Blowing, Reading: Duska – Whistle Blowing and Employee Loyalty, Reading: Arnold & Bustos – Business Ethics and Global Climate Change, Reading: Desjardins – Sustainability: Business’s New Environmental Obligation, Reading: Maitland – The Great Non-Debate over International Sweatshops, Reading: Arnold and Bowie – Sweatshops and Respect for Persons, Terrible Working Conditions and the Costs of Improvement, Module 6: Privacy, Property, and Technology, Reading: DeGeorge – Intellectual Property and Pharmaceutical Drugs, Case: Patents and the African AIDS Epidemic, Conflicting Rights and Ethical Intuitions, Reading: Arrington – Advertising and Behavior Control, Reading: Brenkert – Marketing and the Vulnerable, Case: Kraft foods Inc.: The Cost of Advertising on Children’s Waistlines, the communities around their production facilities. Sports cars pose a greater risk to pedestrians when they hit them. They might be able to argue that they were acting in the best interests of their stockholders by doing this and, if Friedman is correct, this is all that they are morally obligated to do. FordPinto.com, the forum offers many categories such as general, technical and historic information as well as the classifieds section. As Executive Vice President and later as President of Ford, Mr. Iacocca was the driving force behind the program to produce the Pinto. Internal company documents showed that Ford secretly crash-tested the Pinto more than forty times before it went on the market and that the Pinto's fuel tank ruptured in every test performed at speeds over twenty-five miles per hour. Estimates by Mother Jones attribute between 500 and 900 burn deaths to Pinto crashes. sho Ford Pinto. Stakeholder theory is not the only alternative, either, but it does give Stockholder theory a run for its money. Ford employees. He underwent surgery to graft a new ear and nose using skin from the few unscarred portions of his body. So, the decision to produce the Pinto as-is becomes an easy one to make despite the dangerous tendency to burst into flames. SUVs have a higher risk of rolling over than sedans. At the same time, the stakeholders are significant because they affect the company through their purchases and sociopolitical pressure. Is such a claim fair to make if you know that it does not meet reasonable safety regulations that will come into effect very soon? Not only was it poorly designed, it was dangerously designed according to the reports. In 1970 Ford crash-tested the Pinto itself, and the result was the same: ruptured gas tanks and dangerous leaks. They knew that they were violating laws which would come into effect soon, but they weren’t in effect yet. They could say that their car met all current safety regulations. Ford puts the figure at 23; its critics say the figure is closer to 500. Did anyone go to Iacocca and tell him the gas tank was unsafe? Dr. Shouqiang Wang is an Assistant Professor in Operations Management at the Jindal School. Because of the tendency of the Pinto to explode on impact, bystanders who had not purchased the car might also be injured in its wake. As one of the biggest U.S.-based automobile manufacturers, Ford must addre… Foster Brady, Pamela . Ford Pinto Fires Case Study and Executive Summary Essay 1208 Words | 5 Pages. that the Ford plants would have brought into the community. Pinto was a best-selling subcompact. runs drives smells and looks new. As Lee Iacocca was then fond of saying, "Safety doesn't sell.". Most people did not die in fiery auto crashes. There were two fixes: Move the gas tank, or reinforce the tank so it couldn’t break as easily. The Grimshaw case sent a message to automakers that if they chose to ignore safety considerations, it would be at their own financial peril. 1980 Ford Pinto OI-00510 a Project car is rust-free and is in good condition, huge engine compartment, an assortment of aluminum wheels 13" and 15", fiberglass hood, and fiberglass teardrop. Trucks sometimes lose traction in slippery conditions because their rear end is light when they are empty. It might also seem wrong that we let some potential danger to a small group of customers to outweigh the interests of those people who are  This doesn’t mean that the Pinto shouldn’t have been produced as it was, but we have the intuition that someone did something in this case that was wrong. None of these protective devices were used. The second stakeholder would be the investors, stockholders, of Ford Motor Company. In fact, it might create more work for them to do which might make their jobs more secure. According to the sworn testimony of Ford engineers, 95 percent of the fatalities would have survived if Ford had located the fuel tank over the axle (as it had done on its Capri automobiles). The Pinto's gas tank ruptured, releasing gasoline vapors that quickly spread to the passenger compartment. Company officials also decided to proceed even though Ford owned the patent on a much safer gas tank. 25 1971 Ford Pinto. The Pinto, a subcompact car made by Ford Motor Company, became infamous in the 1970s for bursting into flames if its gas tank was ruptured in a collision. The stakeholders in this case include the employees of Ford, the customers who purchase Ford products, the government, domestic and foreign competitors, and those effected by the loss of life due to the safety concerns in the car. 2 LISTINGS - Ford Pinto 25 1979 Ford Pinto. If we are to be concerned with the value that is created and destroyed for those who have a stake in the business’s actions, then we must look to each of them and attempt to discern whose interests should be primary. The Pinto's fuel tank ruptured and the car exploded in flames. Pirkul, Hasan . Ford engineers considered a number of solutions to the fuel tank problem, including lining the fuel tank with a nylon bladder at a cost of $5.25 to $8.00 per vehicle, adding structural protection in the rear of the car at a cost of $4.20 per vehicle, and placing a plastic baffle between the fuel tank and the differential housing at a cost of $2.35 per vehicle. We have designed complicated systems for the frames of cars to increase safety, computer control over drive systems and brakes to increase traction, and several other features that make our cars safer to drive, but these systems were not available in the 70s. Email Jedson JSOM 4.229 (972) 883-5812 . With Lee it was taboo." The short answer is that they did not violate the laws of the time. Introduction and Situational Analysis The Ford Pinto is a subcompact car that was released in the 1970s by the Ford Motor Company. They depended on the factory to bring jobs, training, and wealth into the community. The most obvious ways that these interests can be considered is in terms of money or safety. Iacocca was fired the following month. Even when the Pinto failed to meet the safety guidelines that Ford knew would be in place in a few years, it was judged that it would be too costly to change the design of the car. The customers are an interesting case. After all, many of us voluntarily take risks that others would shy away from. The stakeholders in the Ford Pinto case include all consumers of the automobile. Posted: Nov 29, 2020. “This honor is a reflection of Ford’s core values, and it shows that our employees are continuing to make the right decisions every day for all of our stakeholders.” Ethisphere’s list of the World’s Most Ethical Companies acknowledges and honors companies that recognize they have a role in society to influence or drive a positive change. A problem here is that deception and fraud require that someone intends for another person to be deceived or that they actively deceived that other person. It might make the Pinto into an entirely unprofitable venture. The Pinto was a car with a mission. A spark ignited the mixture, and the Pinto exploded in a ball of fire. Sarasota, FL. 1979 Ford pinto wagon 55176 actual mile unmolested creampuff. We might say that there is an expectation of safety when one buys a car from a company like Ford. Find 10 used Ford Pinto in Dallas, TX as low as $7,395 on Carsforsale.com®. Ford appealed the judgment, and the court reduced the award of punitive damages to $3.5 million. Most people got what they expected to get from the Pinto: a cheap car that served to get them from place to place. Burning Pintos had become a public embarrassment to Ford. The question we must ask is whether Ford violated those rules when they made the Pinto. The Pinto was rushed through production in just twenty-five months so it could be included in Ford’s 1971 line of new models. Safety was not nearly the selling point in the 1970s that it is now. In 1972, a Ford Pinto driven by Lilly Gray stalled as she entered a merge lane on a California freeway. Her Pinto was rear-ended by another car traveling about thirty miles per hour. With those theories in mind, we should analyze what we know of the Pinto case and try to determine what choices each of those theories would have recommended. Driving a 1973 Ford Pinto to their church volleyball practice in Goshen, Indiana, they were struck from behind by a Chevrolet van. Lee Iacocca, a rising star within Ford due to his success with the Mustang, argued that Volkswagen and the Japanese were going to capture the entire American subcompact market unless Ford produced an alternative to the VW Beetle. This paper recounts the Ford Pinto case, describes various ethical decision criteria, details the classroom experiment, then reports the results of the study. Very rare 1971 Ford Pinto convention car. Her passenger, thirteen-year-old Richard Grimshaw, suffered disfiguring burns and had to endure dozens of operations. High gas prices, narrow roads, and population dense areas in mid-20th century … $15,879. However, the court denied Ford's request to have the punitive damages award thrown out entirely, finding that Ford had knowingly endangered the lives of thousands of Pinto owners. The smallest American Ford vehicle since 1907, the Pinto was the first subcompact vehicle produced by Ford in North America. The Ford Pinto is a front-engine, rear-drive subcompact car manufactured and marketed by Ford Motor Company for model years 1971–1980. On June 9, 1978, Ford agreed to recall 1.5 million Ford Pinto and 30,000 Mercury Bobcat sedan and hatchback models. Why did the company delay so long in making these minimal and inexpensive improvements? The lawsuits brought by injured people and their survivors uncovered how the company rushed the Pinto through production and onto the market. Ford Motor Companys corporate social responsibility (CSR) programs are designed to respond to the demands and interests of the firms stakeholders. The Pinto’s selling points included things like good fuel economy, small size, and not being an import. If they were shut down for a year, then that is another year without the funds (jobs, taxes, etc.) There are other rules that we might need to account for. People wanted small, cheap cars, and the Pinto was a small, cheap car. Ford Pinto Case Stakeholders  Ford Pinto Ethics Case Analysis Dickey L. Sours Jr. Business Ethics Course The Ford Pinto designs had the placement of the fuel tank behind the rear axle The fuel tank position has allowed the projecting bolts to puncture the tank when the vehicle was struck from the rear. Let’s see how those interests might be respected and connected. It was supposed to be the car that kept Ford abreast of the times. It isn’t always clear whose interest we should care most about, but it does seem that we should consider people who aren’t stockholders if they will be affected by our actions. Unfortunately, Ford chose to do neither. Ford Pinto Case Overview. This rupture created a risk of fire. The law is only one of the “rules of the game,” however. The Pinto was rushed through production in just twenty-five months so it could be included in Ford’s 1971 line; the normal time span for a new car model was about forty-three months. Ford Motor Company Case Study. If Ford did not promise that their car would never burst into flames, have they deceived anyone? Smaller cars made ideal secondary options because of their inexpensive costs. Email Pamela JSOM 1 ... Pinto, Jedson . Small, cheap, cars are (or were) less resistant to impacts. CASE STUDY “FORD PINTO” 1 2. Stakeholder Management and Corporate Social Responsibility ... Ford, Jr., David . "That person would have been fired. Subcompact cars entered the American automotive marketplace in the 1960's. While testing the vehicle for rear-end accidents, Ford found that the Pinto’s gas tank was incorrectly placed. Ford proceeded with its manufacturing schedule. "Hell no," replied an engineer who worked on the Pinto. Pinto Case 1. 2. INTRODUCTION • Demand for sub-compact cars • Designed in May of 1968 by the vice-president of Ford Motor Company, Lee Iacocca • Weighed 2000 pounds, cost $2000 and manufactured in 2 years 2 3. Now that you have finished the reading for this module, you should address the Case Response assignment on Black Board and take the Quiz for Module 1. The stakeholders in this particular case include: Ford stockholders. Design changes take time, those designs must be tested, and the factories must be retooled for the new production. In fact, their interests are all interconnected like silk threads in a web or the links in a chain. Ancillary stakeholders include all members of the general public who might come into contact with the automobile in their community. Two passengers, Lynn Marie Ulrich, 16, and her cousin, Donna Ulrich, 18, … The case of the Pinto is concerning because it appears that Ford sacrificed the safety and well-being of their customers for the well-being of their stockholders. Did anyone go to Mr. Iacocca and tell him the gas tank was unsafe? So, even when a crash test showed that a one-pound, one-dollar piece of plastic prevented the gas tank from being punctured, the alternative was thrown out as extra cost and extra weight. Fair Park is a recreational and educational complex in Dallas, Texas, United States, located immediately east of downtown.The 277-acre (112 ha) area is registered as a Dallas Landmark and National Historic Landmark; many of the buildings were constructed for the Texas Centennial Exposition in 1936.Fair Park has been designated a Great Place in America by the American Planning Association. We might also ask what responsibility the consumer has in the Pinto case. Those people who would have bought the danger-Pinto, but couldn’t afford the safer-Pinto, would have been left with no car or would have kept driving their older (and perhaps less-safe-than-a-Pinto) cars. Ford pinto full details and analysis report with references 1. That is, they are buying cheap cars instead of expensive cars. Edward Freeman’s stakeholder theory thesis statement is as follows: “The basic idea is that businesses, and the executives who manage them, actually do and should create value for customers, suppliers, employees, communities, and financiers (or shareholders).”[5] In this particular case involving Ford Motor Vehicle Company, the stakeholders would be the product engineers, the employees of the … With Lee it was taboo." The Ford Pinto is a subcompact car that was manufactured and marketed by Ford Motor Company in North America, sold from the 1971 to the 1980 model years. What about the communities that existed around the Ford production facilities? Ford Motor Co., Ford notoriously became the first American corporation ever indicted or prosecuted on criminal homicide charges. At this time many families began to purchase multiple vehicles. 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