BBA 3210 Unit II Assignment

BBA 3210 Unit II Assignment

Columbia Southern University

Unit II Assignment: Ford Pinto

According to Kubasek et al. (2016), the who-how (WH) framework for business ethics emphasizes that a proper set of ethical guidelines requires that managerial decisions recognize the facts that decisions made will have an affect on particular groups of stakeholders (the whom) as operations are carried out within a firm, and also that managers require a set of guidelines for how (the how) to make ethical decisions that meet the standards of action-oriented business behavior. “Who” represents the many different groups of individuals within a firm, known as stakeholders, who will be affected by the firm’s decisions. Stakeholders include customers, owners and shareholders, employees, management, the surrounding community, as well as future generations, and managers should take each group into considerations when engaging in ethical decision making (Kubasek et al., 2016).

Knowing “how” to make “ethical decisions has always been one of our most confusing and important human challenges” (Kubasek et al., 2016, p. 21). Three general ethical guidelines; which are the golden rule, public disclosure, and universalization, have been put into place to assist in making these decisions and provide a path to ethical conduct. The golden rule emphasizes that decision makers be aware of the fact that the rights and needs of other people matter. The public disclosure test, sometimes referred to as the television test, requires decision makers to imagine that their decisions and actions are being broadcast on national television for millions of people to see and perceive. Finally, the universalization test focuses on the stakeholders who are involved in the decisions being made and considers what the world might be like if the same decision were copied by everyone else around the globe. It asks the question, “if others follow the example set forth in this decision, would the world the world be a better place” (Kubasek et al, 2016)?”

With this information in mind, an examination of the well-known case of the Ford Pinto, where Ford knew that the design of the vehicles fuel tank was defective and had an almost certain potential for fire when the vehicle was involved in any type of rear end accident, yet Ford decided to forego repairing the defective design based upon a cost analysis that predicted that it would be more cost-beneficial to pay for damages resulting from deaths, burns, and vehicle loss rather than repairing the defect. I believe that Fords decision to forego repairing the defective design does not comply with the ethical guidelines set forth in the WH framework. In making the decision to pay damages rather than pay for repairs, Ford failed to consider all of the stakeholders who would be affected by their decision, and chose only to consider the bottom line. Ford ignored the repercussions on customers, who could possibly die as a result of their decision, as well as the emotional impacts on employees who may have been building the cars on the assembly line knowing the potential for death or serious injury to others. Additionally, Ford failed to consider the communities in which they operate and disregarded future generations as loved ones may have been lost or severely injured which had the potential to snowball into a host of other future issues.

In making this decision, Ford certainly failed the “how” within the WH framework. Ford blatantly went against the golden rule in failing to consider the rights and needs of others and certainly was not considerate of others feelings as I am sure they would have wanted in return. In making their decision, Ford should have considered whether or not this is how they would want to be treated should the roles have been reversed and should have taken the rights and needs of others into consideration. Ford also may have considered utilizing the public disclosure test in making their decision. In doing so the company may have been able to determine how their actions and decisions may have been perceived by the public in determining that the safety of stakeholders was less important than saving money. Though the costs may have been higher for the company, stakeholders may have held the decision in a higher regard and Ford would have looked much better in their decision than they ultimately did. Finally, had Ford considered the universalization test in their decision, the conclusion certainly would have been drawn that should others follow the same example in future decisions, the world certainly would not be a better place. Decision makers within Ford could have utilized any of the three ethical guidelines within the “how” of the WH framework and discovered that the decision was highly unethical and had a much greater impact on stakeholders than the cost benefit analysis could predict. There is no moral theory that Ford could have utilized as a means of justifying the choice of accepting paying damages for death, injuries, or loss over repairing the defective vehicles.

References:

Kubasek, N., Browne, M. N., Herron, D. J., Dhooge, L. J., & Barkacs, L. (2016). Dynamic business law: The

essentials (3rd ed.). New York, NY: McGraw-Hill Education.