1. If you were deciding whether to engage in the recall or settle the cases in which injury occurred, which would you choose? Why? If I was the CEOof a company facing a similar situation to what Ford Company faced in 1968 with the decision associated with recalling the Pinto model I would have chosen to recall the auto rather than put the customers at risk. Human life should not be given a monetary value because life is priceless. “Life is for laughing, loving, and living” (Foreman). When Ford made the decision to assume $50 million in out of court settlement instead of investing $121 million in the recall they made a decision that was unethical.
Unethical behavior adversely affects the image and customer retention of a company (Hill, 2012). The company made a bad decision because they did not consider the hidden costs associated with the lost of image of the company. This decision was seen unfavorably by the stakeholders of the company. 2. What influence does the value of your stakeholders have upon your decision? The stakeholders of the company should be the top priority of the firm when making this decision.
Some of the stakeholder groups that are going to be affected by the decision include the employees, shareholders, lenders, customers, and the community (Tutor2u, 2012). The employees of the company might suffer emotional damages associated with the guilt of them knowing that the cars they are helping produce have defects that can harm human life. The shareholders of the company would not be happy about the decision either because the out of court settlements would reduce their shareholder’s wealth.
The lenders would not like to do business with a company that disregards the importance of human life. The customers and the community are the most affected stakeholders because they are the ones that are going to pay the consequences of the lost of human life the 1968 Pinto would cause in the long run. 3. What sort of financial impact will your decision have upon the company? The financial impact the decision will have on the company is adverse independent of the decision they made. Choosing to recall the Pinto’s would cost the company $121 million, while the out of court settlements costs $50 million.
Despite the fact recalling cost more the right decision for the company is to recall the product to fix the mechanical problem. The company’s image would be enhanced by acting in a socially responsible way and recalling the Pinto. 4. How do you account for the intrinsic and instrumental value of human life? There is no way to account for the intrinsic and instrumental value of life other than to assume that life is priceless that that the actions of corporations should never put in danger the lives of human beings.
Ford Corporation made the wrong decision back in 1968 of choosing monetary considerations over the value of life. The decision the company made over 34 years ago would not be accepted today because in the 21st century corporate social responsibility has become a critical success factor. “Corporate social responsibility (CSR) can be defined as the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time" (Referenceforbusiness, 2012).
References Foreman, E. Quotes of Life. Retrieved June 13, 2012 from June 12, 2012 from http: //www. angelfire. com/ma4/memajs/quotes/life. html Hill, E. (2012). The Advantage of Ethical Behavior in Business. Retrieved June 12, 2012 from http: //smallbusiness. chron. com/advantages-ethical-behavior-business-21067.html Referenceforbusiness. com (2012). Corporate Social Responsibility. Retrieved June 12, 2012 from http: //www. referenceforbusiness. com/management/Comp-De/Corporate-Social-Responsibility. html Tutor2u. net (2012). Introduction to Stakeholders. Retrieved June 12, 2012 from http: //tutor2u. net/business/accounts/stakeholder_theory. htm