Business ethics refer to the application of right and wrong in the decision-making process. Business ethics guide the professional interactions between a business and their customers and as such the Who-How framework guides the formulation and implementation of business ethics in the decision making process. However, the Who aspect of the framework explores the stakeholders affected by the business ethics including the clients, investors, the management, employees, the community and the future generation. The how-part examines the guidelines that inform the ethical decision-making process like public disclosures, universalization, and the golden rule. An analysis of the Ford Pinto case in which the manufacturers ignored the technical problems in their vehicles during the trial phase due to repair versus compensation cost considerations will be the center of focus. The Ford Pinto case defied business ethics since it disregarded the stakeholders as well as the public disclosure, universalization, and the golden rule guidelines of the WH framework.
The Ford Motor Company’s market share was threatened by the growing imports in the 1968 period a factor that forced them to speed up the manufacture and release of their Pinto brand into the market (Weiss, 2014). In their attempt to hasten the production the standard drafting board- to-showroom period was cut from three-and-a-half years to two years a profit driven decision which would ultimately compromise the Ford Pinto quality . The aftermath was the production of prototypes that did not conform to the standard 20 mph set by the National Highway Traffic Safety Administration (Shaw & Barry, 2015). The shortcoming meant that the car was prone to rupturing in the gas tanks which would lead to leaks, therefore, posing a serious fire hazard but at this point, the release schedule superseded their consumer safety concerns. The release of the substandard vehicles would salvage their market share while reducing costs since the repair costs stood at $11 per vehicle, or $137 million total while the compensation would cost $47.5 million (Schwartz, 2017). The result of the unethical decision was over 400 deaths and injuries arising from pinto fire-related accidents.
Delegate your assignment to our experts and they will do the rest.
Using the WH framework ethical analysis Pinto’s decision was unethical since it negatively affected the stakeholders and violated the ethical guidelines in the framework (Shaw & Barry, 2015). On examining the why aspect of the framework, the decision led to negative repercussions on not only on the brand equity but also on the customers, employees, investors and shareholders and the community (Weiss, 2014). To the customers, the defective cars led to the loss of lives, injuries and permanent disability. The accidents led to recall of the vehicles for fuel tank modification and also attracted over fifty lawsuits from the victims and their families which cost the Ford Company over $3 million in compensation and $125 million in punitive damages. The lawsuits and settlements negatively affected the brand equity, led to decrease in share value and loss of customers which significantly affected the investors and shareholders' returns and the overall profitability of the firm (Schwartz, 2017). The community was also affected because it led to the loss of productive members of society who would have made a meaningful contribution to society.
On the how aspect of the framework, the decision violated the golden rule which states that people should treat others the way they would wish to be treated (Schwartz, 2017). The golden rule requires that the business put their customers' feelings into consideration something that the Pinto manufacturers disregarded, therefore, making their decision unethical. Additionally, the company also ignored the public disclosure test since they did not make known to the customers the potential risks that came with using their products (Shaw & Barry, 2015). The public disclosure test also stipulates as members of society a company should mind about how the society views them a factor that didn't deter the Pinto manufacturers from making a decision that would make them look bad in the public's eye (Schwartz, 2017). The decision also violated the universalization test which states that an ethical decision should have a positive outcome if it were to be copied by others. If companies copied Pinto's decision, it would mean the flooding of the market with substandard goods resulting in death and injury to the consumers (Weiss, 2014). Since ethical decisions are those that advocate for the best outcome Pinto’s decision was therefore unethical.
In sum, the decision by Pinto manufacturers to put cost saving before consumer safety in their production process is unethical. It negatively affects the stakeholders and violates the three rules of the golden rule, public disclosures rule, and the universalization test.
References
Shaw, W. H., & Barry, V. E. (2015). Moral issues in business . Australia: Wadsworth.
Schwartz, M. S. (2017). Business Ethics: An Ethical Decision-making Approach . Malden, MA: John Wiley & Sons, Inc.
Weiss, J. W. (2014). Business ethics: a stakeholder and issues management approach . San Francisco: Berrett-Koehler.
