Business Ethics Positive Social Change and the Ford Pinto Essay

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Business Ethics and Positive Social Change: The Ford Pinto Fiasco

How much is a human life worth? Most people would likely agree that human lives are priceless, but the executives at Ford Motor Company made this type of grisly calculation when they were confronted with the alarming facts about the dangers posed by flaws in the gas tanks of their Pinto automobiles in 1970. Although Ford Motor Company would ultimately recall 1.5 million Pintos to repair the gas tank flaw in 1978, the decision to continue production of this car represented one of the most high-profile examples of how unethical business decisions can have a profoundly adverse effect on society. The purpose of this paper is to provide a review of the relevant literature concerning this business ethics crisis and the scandal that ensued within the context of positive social change.

1) What are the essential details of the event, and the causes of the crisis and/or negative impact to society?

The origins of the unethical business decision made by Ford Motor (hereinafter alternatively “Ford” or “the company”) can be traced to early 1970 when the decision to develop an inexpensive vehicle was originally made by the company’s leadership. Introduced to the market in 1971, the Ford Pinto was the brainchild of Lee Iacocca, whose original design specifications were straightforward and called for a one-ton automobile that could be developed and manufactured quickly and which would retail for around just $2,000 (Bumbeck, 2018). In response, in 1969, the company’s design engineers quickly set to work at an accelerated pace in order to satisfy these specifications.

In their haste to deliver the goods, the design engineers at Ford succeeded in developing a car for budget-minded Americans that largely satisfied the original specifications. The company’s faith in Iacocca’s decision to manufacture the Pinto was certainly justifiable. After all, Iacocca was considered a veritable automotive genius by his employees because he had just saved Ford Motor from near-certain bankruptcy by developing and introducing the wildly popular Mustang in the early 1960s which remains one of the company’s best selling cars today (Goodman, 2018). Moreover, the company was struggling to compete in an increasingly globalized marketplace where cheap foreign imports were destroying the American automotive industry and time was of the essence.

Nevertheless, as the casualties and fatalities that mounted over the next decade would prove beyond a doubt, the design engineers overlooked an important detail with respect to the car’s solid rear axle and its rear-mounted fuel tank. During collisions, the rear axle could penetrate the fuel tank, resulting in spillages, fires and even explosions (Bumbeck, 2018).

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Indeed, the car’s reputation for injuring and killing people became so pronounced that by the mid-1970s, late-night comedians were suggesting the United States could easily win the war in Vietnam by sending a fleet of Pintos into North Vietnam in reverse.

Although the company would go on to survive this public relations disaster, the damage that was done to Ford’s corporate reputation and brand was enormous. In addition, this incident underscored the increasing willingness of major corporations in the minds of tens of millions of American consumers to ignore and even conceal potentially hazardous products. In fact, in the aftermath of the Pinto fiasco, one industry analyst concluded that, “The U.S. economy has been hurt most by incompetence and bad ethics at the top levels of management and administration. These tendencies have encouraged inefficient, uneconomic and demoralizing practices in practically every walk of economic life” (Aggarwal, 1992, p. 25). Of course, there have been countless instances of products that ultimately prove dangerous to consumers due to flawed designs over the years, but design failures are completely different from the types of unethical business decisions employed by the company that further exacerbate these harms and these issues are discussed below.

2) Where do you see failures in corporate governance?

While the company would eventually be found not guilty of any criminal wrongdoings in the injuries and deaths caused by the flawed Pinto design by a court of competent jurisdiction, it is clear that there was a breakdown in the Ford corporate culture that placed a higher priority on profitability than it did on the welfare of the people who purchased their Pinto automobiles (Hayk & Hersey, 2008). As the court records would eventually show, though, there was a profound failure in corporate governance at Ford Motor that made it possible for the company’s leadership to make this type of cost-benefit analysis concerning the costs of lawsuits against the company and the costs of a recall to repair the problem using real live human beings as the guinea pigs in this equation.

The precise dates when the company’s executives first became aware of the problem remain unknown, most industry analysts believe that Ford’s leadership knew about the gas tank problem early on and chose to proceed with production and marketing anyway. In this regard, Bumbeck (2018) advises that, “The Pinto’s ‘Unsafe at Any Speed’ moment came in the fall of 1977, when….....

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