Reference no: EM133177148

The Ford Pinto Case

The Ford Pinto, a compact car produced during the 1970s, became notorious for its tendency in rear-end collisions to leak fuel and explode into flames. More than two dozen people were killed or injured in Pinto fires before the company issued a recall to correct the problem. Scrutiny of the decision process behind the model's launch revealed that under intense competition from Volkswagen and other small-car manufacturers, Ford had rushed the Pinto into production. Engineers had discovered the potential danger of ruptured fuel tanks in preproduction crash tests, but the assembly line was ready to go, and the company's leaders decided to proceed.

Few executives involved in the Pinto decision believed that they were making an unethical choice, apparently because they thought of it as purely a business decision. They argued, "Our role entitles us to act in a certain way, which might not always be ethical or sensitive to other stakeholders." Furthermore, taking an approach regarded as rational in most business school curricula, they conducted a formal cost-benefit analysis - putting dollar amounts on a redesign, potential lawsuits, and even lives - and determined that it would be cheaper to pay off lawsuits than to make the repair.

Do you agree with the argument by Ford executives, "Our role entitles us to act in a certain way, which might not always be ethical or sensitive to other stakeholders."(Explain your answers sufficiently)