Analysis Of Ethical Issues In The Ford Pinto Controversy

Background and introduction to the Ford Pinto car

The well-known car manufacturer Ford Motor Company designed a car Pinto way back in beginning of 1968, for responding to the market trend of sub-compact cars in America (Fordpinto.com 2019). The trend of sub compact cars in 70’s used to be a classic phenomenon. Car manufacturing companies like Volkswagen employed a new design within this category as well. The most attention-grabbing feature of these cars is its small size which does not exceeds more than 165 inches. It makes it little larger than micro cars but does not looks like other compact cars. Other significant specifications are its light weight and reasonably priced range. However, Ford launched classic piece of Pinto coloured in red to the market within two years to capture the latest trend. The organisation was operating the market driven by the fact that customers hardly evaluate safety facilities when it comes to buying a car. They focus more on its outlook and likely to respond to market trends of automobiles. Implementing this corporate concept Ford designed Pinto in a hurried manner and tried to capture market trend and it turned out to be a disaster. As mentioned, consumers generally focus on the outlook more and affordable pricing more preferred than provided safety measures. According to Karlidag (2013), public relations management in an efficient manner has positive impact to the business irrespective of industries. Ford’s renowned brand image obliges the customer base to trust enough to invest on Pinto without thinking twice.   

A disastrous case occurred when an American family; a teenage boy of thirteen years and his mother, was travelling driving a Pinto car. Even a mild collision with another car running at a speed of 30 mile per hour ignited a fire in Pinto. It caused the mother’s unfortunate death and the boy received fatal brunt wounds. After that collision happened, rear portion of Pinto warped up completely towards back seat and blasted into fire. Although, the family received compensation for damages that took place, yet argument raised against the faulty car safety and design related defects of fuel tank. Although, there were numerous controversies the company did not make any significant transformation to upgrade its quality. People who have already bought the cars cannot really get rid of that due to its bad reputation of being explosive. The most shocking accidents took place even when a car in motion collided with a Pinto parked in roadside. That Pinto car blasted into fire just after collision happened. This incident highly specifies the manufacturing deficiency in case of fuel system that situated on its rear set up and design as well. Aside from that, Pinto was criticised for jammed doors that restricted customers from coming out and burned till death. In this due course, abiding by the strategies mentioned in Carroll and Buchholtz (2014), the case is going to be investigated and key ethical issues will be identified at first. Responsible designations will be recognised who could have taken the ethical decision of restructuring the design yet did not take any initiative. Further, this report will try to mark its stakeholders and inaugurate relationship between major ethical issues and the brand image of Ford as negative publicity or any kind of controversy is harmful for brand popularity immensely.

The disastrous accidents and controversies surrounding Pinto

American families who had always wanted to buy a car within affordable range felt excited after the launch of Ford Pinto. The controversy left them with massive psychological burden as they were potential threat of explosion. Both the internal and external stakeholders were the victim of multiple incidents of ill-fated accidents. The management received public criticism for ignoring social responsibility of modifying important factor of manufacturing. Suppliers, responsible employees along with shareholders confronted with tremendous public pressure and hatred. Consumers trust was broken by the company as Ford could not satisfy customers’ expectation not only that led them towards fatality. Additionally, there were numerous families who have been victimized and their future was at stake. Government was questioned for not commencing concrete steps against them for violating environmental norms along with manipulating consumers’ trust.

Surprising fact is that management was fully aware of the design faults regarding the way fuel tank was placed. It was positioned at back of the car at end. By the time Ford comprehended its influence it was too late to make any changes. Acknowledging the cost effective analysis they unethically ignored their social contribution and launched with faulty designs for the customer base who are least bothered about faulty designs. It has been perceived that if they would have trailed the path of transforming the entire thing following ethical guidelines, it would cost lesser amount than offering frequent compensation for damage. Moreover, designing the car in a safer way could have prevent unfortunate demises as well.  This context highlights ethical issues as follows.

• Ford Motor along with contemporary government were accused for valuing human lives with monetary amount and presenting the compensation amount and the company considered those compensation amount as their loss. A reading of Weck and Ivanova (2013) indicates towards significance of trust in business.This unethical behaviour of Car Company not only led people towards premature death, but also they were penalised for manipulating customers with false commitment for profitability. The company chose the most unethical way to defend itself stating further monetary investment for restructuring was much higher than cost of social wellbeing.  
• The cost of improvements was not that high to create cost related risk in their balance sheet. The company’s carelessness for correlating existing faults by initiating modification fell under serious unethical concern. The most astonishing thing was no serious actions was granted against the company on behalf of Government or tried to withdraw Ford’s business permit. Therefore, Ford continued to business legally following an unethical and unjustified way.
• The cost benefit analysis made them to reject the thought of designing the car again considering the high expenditure. To restrict the weight, small size and operation cost within certain parameter customers met with extreme consequences.  
• According to Neubert, Wu and Roberts (2013),an ideal organisation must follow a culture where adequate training will be provided to employees guiding them for maintaining high moral behaviour. However, it disheartened people as they saw Ford’s culture is filled up with untruthful practices and their encouragement is towards employee behaviour where they are trained to ignore important matters like safety and security; according to Xu, Loi and Ngo (2016) which is a mandatory aspect. Their indifferent behaviour regarding structuring safety policies falls under violation of ethics which was recognised, instead more importance has been noticed towards increasing sales along with profit.
• Internal stakeholders were accused of remaining silent in case of maintaining safety policies while manufacturing other brand of cars too. Their behaviour of ignoring moral obligation generated a doubtful image of Ford in front of its shareholders.

• Social responsibility was ignored by employees which manifested degraded sense of ethical values. Employees who were involved into the Pinto project, they had that privilege to take serious initiative of complaining to higher management about internal hypocrisy of launching such a faulty design and save customers from probable risk of explosion. Customers would appreciate the venture if they experience honest effort of admitting ignored responsibility. Cost benefit analysis was much expected from employees while dealing out the car’s design.
• Ford’s work culture of practicing such duality, contemporary leadership style were questioned as employees could not vocalize their opinion with seniors holding high designation. The study of Choi, Ullah and Kwak (2015) indicates poor communication channels restricted employees to add their valuable opinion in the ethical decision making process.  
• As described in Madanchian et al. (2016),theory indicates a problematic leadership style can lead employees towards practicing faulty behaviour. Therefore, requirement of training in necessary to bring forth ethical behaviour. However, why such initiates were not taken it was the culture itself, people questioned that too. Besides, voice was raised among the customers against dishonest business practice of Ford and criticized their marketing theory, “safety does not sell’. Being the most important external stakeholders, manipulating customers comes under exploiting consumers’ right. It harmed Ford’s reputation and created sustainability issues for them.
• Following the theories detected in Uprety (2016),management’s moral senses, duties and responsibilities could have been applied more logically to preserve commercial association with shareholders as well as suppliers. According to the business regulations, shareholders should have known the project plan entirely. It was unexpected not to obtain any protest from their behalf in the first place. More positive efforts were expected from them regarding researching the matter deeply and come up with a logical sub-compact design which adheres to all the ethical standards.

Conclusion

It is collectively acknowledged that preserving the community standard within business system improves a business in terms of sustainability within competitive business culture. As it is true for entire automobile market, American market is not an exception as well. In 1972, even then also business thoughts were profit oriented yet overlooking moral responsibility cannot be acknowledged at any state of affairs. Its impact was entirely negative over the targeted customer base and influenced their buying behaviour at large. Ford’s standing as a trusted business organisation was smashed tremendously as customers asked for legal assistance in both the civil and criminal acts. In this due course, Ford lost their competitive edge not only in national market but internationally too.    

It is a tendency of consumers to choose products or service which satisfy their hopes and not leading them towards fatal consequences (Rani 2014). Ford Pinto displayed extrame controversial performance particularly in the field of sub compact designs which raises questions against their business training and both the personal and professional morale. Undoubtedly, it extremely caused harm to their premium automobile brand image. Researchers like Malik et al. (2013) recommends that customers behaves in a loyal way when they get to know about responsible practices within the management following three dimensions of sustainability. In this scam, Ford handled customers’ unlawfully by selling defective machinery which led them towards extreme casualty.

Investigation of ethical issues and responsibility

As stated in to Moore (2014), this is an instance of violated social, environmental and economic sustainability standards; an unprofessional practice of ‘corporate social responsibility’. In addition to that, a section of customer lost their trust over other existing sub-compact designs of cars like Volkswagen Beetle as well which was a damage to the automobile industry all together. On the other hand, another section stared to rely on foreign car brands more than American brands.

The fact must be remembered that the old perception of purchasing behaviour used to oblige people to buy a car or any product out of necessity. However, contemporary buying behaviour is driven by wishes and kind of psychological. Customers had a particular perception while buying Pinto that it is the car which suits their small family and fulfil budget concerns as well. There is no point of buying a defective piece of car paying high monetary amount.  Customers would be satisfied if price were higher following ethical norms.  Extended research and justified pricing strategy were more tolerable by the customers even in this era than harming brand image with such controversial scam. Hence, to conclude it can be stated that an authentic brand is acceptable in all the spectrum of society if both the social and business requirements can be fulfilled.  Being honest and true towards sustainability practices can be considered as vast competitive advantage for a product that secures business in terms of retaining the interest of the market.

References

Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder management. Nelson Education.

Choi, S.B., Ullah, S.M. and Kwak, W.J., 2015. Ethical leadership and followers’ attitudes toward corporate social responsibility: The role of perceived ethical work climate. Social Behavior and Personality: an international journal, 43(3), pp.353-365.

Fordpinto.com (2019). Pinto Car Club of America – Index. [online] Fordpinto.com. Available at: https://fordpinto.com/ [Accessed 2 Feb. 2019].

Karlidag, S., 2013. Is a corporate social responsability a public relations invention in mobile communication?.

Madanchian, M., Hussein, N., Noordin, F. and Taherdoost, H., 2016. The Relationship between Ethical Leadership, Leadership Effectiveness and Organizational Performance: A Review of Literature in SMEs Context. European Business & Management, 2(2), pp.17-21.

Malik, M.E., Ghafoor, M.M., Iqbal, H.K., Ali, Q., Hunbal, H., Noman, M. and Ahmad, B., 2013. Impact of brand image and advertisement on consumer buying behavior. World Applied Sciences Journal, 23(1), pp.117-122.

Moore, C., 2014. Corporate social responsibility and creating shared value. Heiffer International, pp.1-6.

Neubert, M.J., Wu, C. and Roberts, J.A., 2013. The influence of ethical leadership and regulatory focus on employee outcomes. Business Ethics Quarterly, 23(2), pp.269-296.

Rani, P., 2014. Factors influencing consumer behaviour. International journal of current research and academic review, 2(9), pp.52-61.

Uprety, R., 2016. Does Chief Executive Officer (CEO) leadership style matter? An empirical analysis of the relationship among CEO leadership style, job satisfaction and profitability in Nepali financial institutions. Journal of Business and Management Research, 1(2), pp.1-16.

Weck, M. and Ivanova, M., 2013. The importance of cultural adaptation for the trust development within business relationships. Journal of Business & Industrial Marketing, 28(3), pp.210-220.

Xu, A.J., Loi, R. and Ngo, H.Y., 2016. Ethical leadership behavior and employee justice perceptions: The mediating role of trust in organization. Journal of Business Ethics, 134(3), pp.493-504.