Written Case Analysis Corporate Social Responsibility

Written Case Analysis

The primary purpose of doing business is, according to marketing theorist Theodore Levitt, is defined as a need to “create and keep a customer” (Boatright, 216). Although this quote is very vague, it may be agreed that this “purpose” includes finding a need (a particular want in a society) and a target market, how to attract customers from a defined target market, and how to develop a sustainable strategy in the long run to keep and attract new customers. Keeping and attracting new customers are arguably the most challenging tasks in business. One way to take on this challenge is through customer satisfaction. Underlying customer satisfaction is product safety and reliability, which in today’s society, plays a pivotal role in decision making. Boatright uses case 10.3 in his text “Ethics and the Conduct of Business” to show the importance of ethics and the impact of decision making in business.

The Ford-Firestone Brawl (Boatright, 242) is a case that Boatright used to demonstrate how decision making could affect long-term business partnership when the safety of consumers is compromised. Ford (car manufacturer) and Firestone (tire company) had been doing business together for nearly 100 years, where Firestone supplied tires to Ford per their specifications. A dispute arose between the two when a combination of the Ford Explorer SUV and Firestone ATX and ATX II tire resulted in over 200 deaths and 700 injuries caused by product failure. By using Ford as the agent for this case analysis, the dispute between the two giant corporations raise a number of ethical issues that Ford now face.

Ford has developed a vehicle that is quick and cheap to produce by making a few simple modifications to an already existing model. Ford engineers have found ways of improving the Explorer’s road performance through design modifications, but instead proposed alterations (softening suspension and lowering tire psi) that could be made without changing the available assembly line.

It can be understood from the case details that Ford had been working with both Firestone and Goodyear in supplying tires for use on the Explorer. After Goodyear had discontinued supplying tires to Ford on the grounds that they did not want to compromise their own tire quality standard at Fords asking price, questions were raised concerning the Explorer’s structural safety. Firestone had conducted a statistical analysis for accidents involving the Explorer, and found that tire failure accounted for less than 10 percent. Firestone then faulted Ford for addressing the Explorer’s poor road performance with minor alterations instead of making a permanent change to solve the problem.

Ford CEO, Jacques Nasser, responded with his own statistical proof showing that tire defects in Firestone’s tires largely out weighing defects from competitor tires when analysis the cause of fatal accidents involving the Explorer. Nasser continued to put blame on Firestone by saying that Firestone chose to continue with production and supply of tires to Ford’s specifications, even after Goodyear had withdrawn. Nasser added that Firestone’s decentralization of department head’s was another reason Ford was at fault for the Explorer’s alarming fatality margin as they failed to recognize the problem with the tire-vehicle combination, and in communicating the problem with Ford. Ford even went as far as placing fault for tire failure on the consumer for neglecting to regulate tire psi themselves.

Both Firestone and Ford had either recalled or replaced the ATX or ATX II tires that were originally fitted onto the Explorer, although Ford only issued a replacement of Firestone tires the day after Firestone presented Ford with a letter severing the long-standing relationship between the two corporations. In the end, Ford lost the business of tire giants Goodyear, replaced $3 billion worth of Firestone tires, and when Firestone walked away, Ford lost 40 percent of their global revenue ($7.5 billion in annual sales).

The ethical issues that Ford now had to answer surrounded the value they placed behind their Explorer. Was the Explorer a defective, unsafe product? Were Ford engineer’s tire alterations worth the lower cost benefit than manufacturing the Explorer from a new assembly line specific to the modifications that would improve the Explorer’s road performance, when two tire giants withdrew their business altogether? Should Ford have placed blame on Firestone when there was evidence suggesting that both were at fault? Ultimately, Ford had to now decide to accept that the Explorer’s design was a safety concern to consumers and to create a new assembly line to make it a more road worthy vehicle, or to continue with the current design, backing the Explorer’s stability, leaving a cheap, affordable vehicle on the market.

By rewording the dilemma, it becomes a matter of what Ford values more: do they value the safety of their consumers over profits or will they value increased profits from cutting expenses and leaving their customers free to decide on whether this is a safe buy or not? By using Virtue Ethics, the case facts will help identify where Ford places their values, and hopefully resolve this case in the most ethical way.

Since Virtue Ethics is concerned with character qualities that shape a “whole, good person” where the ultimate end is good, any decision making should be geared towards the well-being of anything and everything (Dr. Ophardt lectures). Plato and Aristotle have both described these character qualities as virtues that tend to have “good” connotations. Where Plato’s view is based on “a world of forms beyond our sense”, where virtues should reflect the perfect ideal (all characteristics that lead towards good are virtues, everything else that does not lead to good is a vice), Aristotle looks for the middle ground between insufficient and excessive by looking at and analysis actual events (Wilkens, 132). By considering the act (or decision to act) as the means for doing good, Aristotle’s view helps focus on what solutions are possible and rational, rather than what would be the perfect outcome (Wilkens, 133).

Dr. Ophardt offers a different view on Virtue Ethics from his lectures. He places emphasis on acting with integrity as the character quality that best identifies with this theory. What this means is to control behaviour as judged by seeing self-fulfillment through something other than what benefits you (Dr. Ophardt, lecture). By behaving with control, outside factors do not influence judgment when striving to be a whole, good person. Since Ford is governed by an executive body, the values identified from this case will be considered to represent Ford as a whole, much like most consumers would do.

Therefore, from these three perspectives on Virtue Ethics, most of Fords actions are either lacking or excessive in terms of finding a balanced or controlled decision when looking for solutions to this dilemma. First off, although engineers did have methods to manufacture the Explorer to be safer on the road, their decision to assemble it on an existing line was lazy and stingy. Ford could argue that this was to produce a more affordable vehicle for consumers, but the resulting cost benefits favoured Ford more than the customer. It can be argued that their decision to reduce tire psi against making a more physical change to the Explorer, and to expect consumers to be more mindful of tire psi was careless, naïve and irresponsible regarding customer safety.

If Virtue Ethics was compared to Trust Ethics, the conclusions would be similar. As summarized by Dr. Ophardt, Trust Ethics focuses on relationships (Dr. Ophardt, lecture). The interactions between individuals, or corporations in this case, are evaluated based on the nature of the relationship, their priorities, the rights of those involved in the relationship, as well as their responsibilities (Dr. Ophardt, lecture). Trust Ethics’ purpose is to determine prioritized value system for the purposes of the agents involved. Trust Ethics uses values to help evaluate the interaction of agents, as they prioritize their purpose.

As mentioned earlier, product safety and concern for the consumer are the values in which businesses should prioritize their involvement in order to maintain sustainability. For Ford, the value placed in customer relations is taken away when they neglect the safety concerns of a product that has resulted in numerous fatalities. Placing blame on Firestone instead of taking initiative to correct the problem also devaluates the customer by not taking ownership of the responsibility they have to their customers. Finally, by stating that faulting falls on the consumer for a product that has been proven to be defective from collected data, Ford may have severed all relationship connections to their customers.

Proverbs 13:11 says “Wealth gotten by vanity shall diminish, but he that gathers by labour shall increase”. It is evident that Ford lost billions of dollars over one decision that they believed to be a quick, profit making strategy. Ford should now accept that the Explorer’s failure was in part their fault and work hard to restore the relationships that have been lost from their decision and to create an image worthy for customers to reinvest their trust in Ford vehicles. Ford should reevaluate their value structure and place customer safety as one of their major priorities.