Cost-Benefit Analysis and the Ford Pinto Essay

Exclusively available on Available only on IvyPanda® Made by Human No AI

According to the principles of modern corporate ethics, every private business bears direct responsibility for the well-being of the community and environment, in which this firm operates. The company must not pursue only its own commercial interests but the interests of society as well. Moreover, the profitability of this enterprise heavily depends on its ability to maintain good relationships with the public. Inability to meet these standards inevitably leads to a decrease in sales and the loss of profit. However, there are cases when the private business deliberately violates these norms because hoping that it would this unethical conduct would go unnoticed and the public will not be able to take any action.

Such firm as Ford Motor Company (FMC) has frequently been criticized for its failure to ensure the safety of American consumers. Its automobile the Ford Pinto lacked a safety kit and this made the car more prone to fire. Furthermore, the management was aware of this drawback, but nothing was done to rectify it. It should be borne in mind that the cost of this improvement was approximately eleven dollars per one car. The company made this decision on the basis of cost-benefit analysis. In other words, they estimated that the cost or redesign would be much greater than the costs of lawsuits (Friedman et al, 70). In fact, they tried to calculate the value of human life. Certainly, from a moral point of view, this behavior is impermissible as human life is invaluable and it cannot be measured in terms of numbers. But this decision had other important implications.

In his article Michael Friedman strives to analyze the criteria according to which this decision was made. First, the author sets facts on the idea that cost-benefit analysis is the most common technique used by the management of Ford (Friedman et al, 70). In fact, it is utilized nowadays by the firms officials. Thus, this fact should not be so astonishing. The only exception is that at that time people became aware of the firms policies.

Undoubtedly from an ethical perspective, such a decision may seem outrageous to many people. It even appears to be utterly unthinkable because average people cannot imagine that their safety may not be worth of $ 11 improvement (Friedman, p 66). But this example shows that a great number of firms are concerned only with their position in the market rather than the well-being of average citizens. At the present moment, the consequences of such a decision could have been more severe. The thing is that Ford could simply lose the competition to foreign automakers, for example from Japan or Germany and the competition was truly stiff at that time because new manufactures have already entered American markets (Friedman et al, p 63). In fact, Ford was saved by a mere chance because the number of car accidents was relatively small.

Overall, it is quite possible for us to say that the mere pursuit of profit is morally impermissible and dangerous to any enterprise. In the modern age, customers can profoundly impact the development of any company. Provided that this event occurs in the modern age: customer dissatisfaction can immensely decrease the income level even of such giant as Ford Motor Company. This case illustrates that those claims about corporate social responsibility are mere lip service or hollow promises because they are not supported by any actions. Furthermore, this situation demonstrates that the value is human life is sometimes estimated by means of cost-benefit analysis.

Works Cited

Almeder. Snoeyenbos, M., R., & Humber J. Business Ethics: Third Edition. Prometheus Books, 1992.

More related papers Related Essay Examples
Cite This paper
You're welcome to use this sample in your assignment. Be sure to cite it correctly

Reference

IvyPanda. (2021, November 22). Cost-Benefit Analysis and the Ford Pinto. https://ivypanda.com/essays/cost-benefit-analysis-and-the-ford-pinto/

Work Cited

"Cost-Benefit Analysis and the Ford Pinto." IvyPanda, 22 Nov. 2021, ivypanda.com/essays/cost-benefit-analysis-and-the-ford-pinto/.

References

IvyPanda. (2021) 'Cost-Benefit Analysis and the Ford Pinto'. 22 November.

References

IvyPanda. 2021. "Cost-Benefit Analysis and the Ford Pinto." November 22, 2021. https://ivypanda.com/essays/cost-benefit-analysis-and-the-ford-pinto/.

1. IvyPanda. "Cost-Benefit Analysis and the Ford Pinto." November 22, 2021. https://ivypanda.com/essays/cost-benefit-analysis-and-the-ford-pinto/.


Bibliography


IvyPanda. "Cost-Benefit Analysis and the Ford Pinto." November 22, 2021. https://ivypanda.com/essays/cost-benefit-analysis-and-the-ford-pinto/.

If, for any reason, you believe that this content should not be published on our website, please request its removal.
Updated:
This academic paper example has been carefully picked, checked and refined by our editorial team.
No AI was involved: only quilified experts contributed.
You are free to use it for the following purposes:
  • To find inspiration for your paper and overcome writer’s block
  • As a source of information (ensure proper referencing)
  • As a template for you assignment
Privacy Settings

IvyPanda uses cookies and similar technologies to enhance your experience, enabling functionalities such as:

  • Basic site functions
  • Ensuring secure, safe transactions
  • Secure account login
  • Remembering account, browser, and regional preferences
  • Remembering privacy and security settings
  • Analyzing site traffic and usage
  • Personalized search, content, and recommendations
  • Displaying relevant, targeted ads on and off IvyPanda

Please refer to IvyPanda's Cookies Policy and Privacy Policy for detailed information.

Required Cookies & Technologies
Always active

Certain technologies we use are essential for critical functions such as security and site integrity, account authentication, security and privacy preferences, internal site usage and maintenance data, and ensuring the site operates correctly for browsing and transactions.

Site Customization

Cookies and similar technologies are used to enhance your experience by:

  • Remembering general and regional preferences
  • Personalizing content, search, recommendations, and offers

Some functions, such as personalized recommendations, account preferences, or localization, may not work correctly without these technologies. For more details, please refer to IvyPanda's Cookies Policy.

Personalized Advertising

To enable personalized advertising (such as interest-based ads), we may share your data with our marketing and advertising partners using cookies and other technologies. These partners may have their own information collected about you. Turning off the personalized advertising setting won't stop you from seeing IvyPanda ads, but it may make the ads you see less relevant or more repetitive.

Personalized advertising may be considered a "sale" or "sharing" of the information under California and other state privacy laws, and you may have the right to opt out. Turning off personalized advertising allows you to exercise your right to opt out. Learn more in IvyPanda's Cookies Policy and Privacy Policy.

1 / 1