The business ethics includes three main theories: utilitarianism, deontology and theory of justice. One of the most influential in business ethics is the concept of utilitarianism (Act Utilitarianism) which states that morally justified action is an action which eventually leads to the maximum benefits for everyone who is involved. After reading a case “The Ford Pinto” I came to the conclusion that Ford acted unethically in resolving the issues with a gas tank in the cars. As I understand, Ford calculated that human life is not worth enough for them to spend extra $8 on the production cost of each car.
Ford’s economists did the following: using the statistics of accidents, they estimated approximately how many such accidents will happen in all the years of exploitation of Pinto, and how many people will be burnt alive. Then they calculated the cost of payments for the insurance and the claims of the victims. They also estimated that the cost of remaking all Pinto is several times higher than the cost of the claims. Accordingly, Ford decided that it is more economically profitable to burn people, than to alter cars.
In my opinion Ford’s decision was unethical and I support my opinion with an Act Utilitarianism theory. The decision that Ford made was a morally incorrect. The reason why I say this is because; even intellectually challenged person can see that human life is worth more that $8 or the whole Pinto car. In my mind you don’t need to be an economist to resolve the issues with a gas tank without losing any money. What Ford had to do is to add this $8 dollars to the price of the car and the problem could have been solved ($8 in 1970 was equivalent to $44. 0 in 2009).
Let’s say that it still doesn’t cover Ford’s expenses, in this case Ford’s economists should have uses logic thinking, since the car ignites from the bump on the rear bumper, people will get hurt and families of the victims will want the answers or money compensations. Since the Ford didn’t solve this issue by using an Act Utilitarianism theory, damages of the company included brand reputation and significant financial losses. Regarding the lawsuits, in my opinion lawsuits don’t create difficulties for American companies to be competitive.
I think the only reason why we have high quality products and why the companies are trying to create high quality and healthy products for people is because they are afraid to be sued by the customers. The actual law requires a manufacturer of the products or other parties which are involved in the process of product sales to be responsible for the quality of the products (goods), products must be subjected to examination in order to identify and confirm the presence (or absence) of defects, which can be a source of harm to the consumers.
Thus, the manufactures may hold responsibility for the product which is defective and constitutes a potential hazard to users. For example, if the tire company is not afraid to get sued and lose all the money, it would not pay as much attention to the quality of the product and would try to save as much money as possible on the production costs (we see how it ended in Pinto’s case) which would create danger on the road and people would get hurt. However, I think that there must be limitation of the lawsuits, because we don’t want people to start suing big corporations because of silly claims.
My personal moral standing would not change because of my involvement in the company which was involved in wrong doing towards its customers. The reason why I have chosen Act Utilitarianism theory as a support of my opinion in the Ford’s case is because; this theory supports my understanding of how that situation should have been solved. Regarding the company that is partially owned by governments, it would also be unethical to choose financial data over human life.