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ETHICS IN THE BUSINESS WORLD.
Term Paper ID:30347
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Essay Subject:
Discussion of ethical issues using the example of Ford and Firestone.... More...
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7 Pages / 1575 Words
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Paper Abstract:
Discussion of ethical issues using the example of Ford and Firestone. The companies' lack of disclosure regarding problems with Firestone tired on Ford Explorer vehicles that led to a series of deaths. Argues that Ford and Firestone put their company's profit over customer safety. Issue of consumers' rights vs. corporate cost and benefit.
Paper Introduction:
Ford and Firestone
The infamous series of deaths attributed mainly to malfunction of Firestone tires on Ford Explorer vehicles provides a good platform for looking at ethics in the business world. Ethical issues address an individual and organizational moral conduct in many aspects of life. In the business world, it involves answering the question of whether we are acting "in good faith, promptly, fairly and equitably, whenever liability is reasonably clear" (Claims, 2001).
If a business has a conflict of interest between being profitable and being unfair, then it is engaging in an unethical act toward the public. As in the case of Ford and Firestone, the company had apparently disclosed the truths from the public in hope of saving the company's long-built reputation. They were aware of the deaths and
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That is because people would still remain faithful to the company'sproduct. USLaw.com Library. The result was more than 1 deaths inauto accidents. Retrieved from the World WideWeb 8 June, 2 1, at http://www.cbsnews.com/now/story/ ,1597,239955-412, .shtml. That makes perfect sense because the issue is clear: Firestone andFord should have admitted the circumstances of the accidents and deaths.They should have proceeded along three lines. Hush money? However, I believe that if Ford and Firestone hadacknowledged their mistakes earlier, the companies would have saved notonly their reputation but also their sales in the long run. Savingreputation means saving sales, which means saving more profit in futuresales. CBS News quoted Alan Kam, whoretired after 21 years as the National Highway Traffic SafetyAdministration's top lawyer for defects and enforcement issues, on Ford'sconcealment of "signs of failures that were occurring at an astronomicallevel, at a figure far beyond any measure I have seen before." Kamcontinued: They were telling the agency they didn't know what was causing stalling while they were doing extensive studies showing they knew what was causing the stalling (Pattern, 2 ). But consumers' ignorance of unsafe products causedthe lives of many innocent people. Before the Federal government launched its probe in 2 , Ford andFirestone knew of at least 135 deaths and 13 injuries because they werebeing sued by the families of the victims. Their main concern was not to publicize the problem (Gonsalves,2 ; Mokhiber & Weissman, 2 ). Almost halfbelieved that if those violations were had been public, their employerswould "significantly lose public trust" (Claims, 2 1). Neither company did anything at all to look atthe underlying problems. No company should usethe lives of the innocent in exchange for money and profit. As a consumer, I would remain a loyal customer of companies thatwere honest from the beginning and showed their eagerness to solve the casewith a more ethical approach. Retrieved from the World Wide Web, 8June 2 1, at http://detnews.com/2 /autos/ 9/ 3/a 1-115188.htm. Asin the case of Ford and Firestone, the company had apparently disclosed thetruths from the public in hope of saving the company's long-builtreputation. All companies should realize that people have faith in their products;why else would they purchase the products? CBS News. It's been reported that Ford and Firestone knew that they had aproblem with defective tires; however, both failed to fix the situation orwarn the public of this problem. Neither company announced the problem to otherconsumers. I believe thatconsumers are entitled to enjoy rights and protections from themanufacturers, and they should be made aware of hazards and defects asearly as possible. G. It becomes obviousthat both companies had put profit first, and consumers' rights last, whiledeliberately trying to avoid being caught violating public trust. But when "ambition override[s] ethics" (Examples, 2 ),problems are bound to follow. Investigating Vaccination: The VaccineAwareness SiteRing. Another news report said that the "Japanese owners,Bridgestone, had stacks of complaints, which had simply been stuffed in adrawer" (Claims, 2 1). Shareholdersdemand increasing profits and dividends, and senior management positionsare retained or lost depending on financial results. Gonsalves, S. I wouldrather spend more money to purchase other brands in exchange for saving mylife. (2 , September 13). Big corporations are in business to make money, or why would they evenexist? Firestone and Ford did not agree, however. This is a life-and-death issue. There is no contradiction between mistakes and ethics. Common Dreams News Center. First, they should have takencare of the problem by replacing the tires. Retrieved from the World Wide Web, 8June, 2 1, at http://www.commondreams.org/views/ 913 -1 1.htm. There is nothing wrongwith making profit; all businesses attempt to maximize their profit withthe least cost. Longley, R. This has already been noticed by public officals, such asPennsylvania Senator Arlen Specter. Ford blamed Firestone for the tire it manufactured, while Firestoneblamed Ford, saying that the design of their Explorer is prone to rollover(Schneider, 2 b). Ethical problems are not confined to Ford and Firestone. The very fact that Ford and Firestone arrangedsecrecy agreements with victims' families without acknowledging liabilityexposes their prior knowledge about the defects of their products. CommonDreams News Center, originally published in Cape Cod Times. Mokhiber, R., & Weissman, R. This not only raises manyethical questions but also leads to different ways of handling the legalcase. One source speculates that they did the cost-benefit analysisand believed that they could actually save money through payments toindividuals without any public knowledge (Schneider, 2 b). But of course, evidence from the Ford/Firestone case is in directcontrast to what I believe. Being aware that you have manufactured and distributed defectivetires, and not immediately informing the public is a violation of federalMotor Vehicle Regulations (Longley, 2 ). In the short run, sales of both companies would probably have beenaffected. And nowthey must bear the cost. If the recall had gone publicsooner it would have saved the lives of many people. Whywould anybody want to use a product with such a bad reputation? (2 , November 2). Retrieved from the World Wide Web, 8 June,2 1, at http://www.uslaw.com/library/article/TNPHealthInjCol 912 .html. The announcement would have caused sales to fall intocompetitors' hands. I believe thatthere is nothing wrong with making mistakes as long as one takes theethical responsibility and fixes the problem. They chose to conceal the truth, which was evenmore costly: "When you make a mistake and then try to bury that mistake,the price of its exposure is always greater than fixing the problem in thefirst place" (Schneider, 2 b). Rift between Ford and Firestone widens:Consumer angst erupts. Unfortunately, Ford and Firestone failed all of the tests and violatedethics. If Ford and Firestone had not covered up and lied--and had the truthhad been exposed sooner--the result would have been different as far asdeaths were concerned. According toa survey done by the consulting firm KPMG released in 2 , 76 percent ofemployees, across all industries, said that they had witnessed violationsof the law or of company policy during the previous year. Ford and Firestone put their company's profit over their customers'safety and lives by concealing important information (Schneider, 2 b),but they had an ethical responsibility to inform their customers of theproblem and thereby prioritize their customers' rights over their profits.In this case clearly, the issue of corporate cost and benefit was inconflict with the consumers' rights, safety, and lives (Schneider, 2 b).However, I strongly believe that customers' rights should be takenseriously. (2 b). They were aware of the deaths and injuries caused by its tires(Schneider, 2 b), yet they never brought this to the public's attention.Although the company had attempted to solve their tire problems, theirsolutions took the form of under-the-table deals with the families of thevictims. (19 September 2 ). (2 , September 12). Retrieved from the World Wide Web,8 June, 2 1, athttp://www.uslaw.com/library/article/TNPHealthInjCol 816tirefail.html?area_id=3. It's in your hands. Big corporations have the power and connections to hide the truth fromthe public and escape through legal loopholes. Quality Progress, 22, 3. Firestone, the free market. Research has revealed that bothFord and Firestone executives knew of the danger of the tires and therelevance of increasing or decreasing the inflation pressure in the tiresas early as 1997. (2 1, January).Claims Magazine. Schneider, N. Based on the behavior of Firestone, I wouldswitch to other brands of tires rather than staying with Firestone. U.S.Gov Info/Resources. If a business has a conflict of interest between being profitable andbeing unfair, then it is engaging in an unethical act toward the public. Examples. Second, they shouldhave been responsible in their own actions. Ethical issues address anindividual and organizational moral conduct in many aspects of life. Brand names and company reputations suffered because of actions inignoring problems and then covering that up. Ford/Firestone:Homicide? CBS News. There should have been no needfor regulators to order the recall or for Firestone to change the design ofits tires without being told (Pittle, 2 ). The Firestone crisis reveals that although many people,including the families of victims and their lawyers, knew about the allegeddefects in Firestone's tires, the truth was originally kept quiet by aseries of secrecy agreements signed as part of the company's legalsettlements (Hush, 2 ). An insurance-industrycommentator cites an Ethics for Adjusters course in which "we discusschoice and accept responsibility for the choices we make" (Claims, 2 ).For Ford and Firestone, the most profitable choice was to suffer the livesof the people in exchange for gaining profit from sales. Obviously, as the old saying goes, "it is better to be safe than sorry." Although a tire blow-out that causes severe injury or death can result in a large legal settlement or verdict, most people would agree that it is better not to suffer such an accident simply for the right to sue Bridgestone/Firestone or Ford (Schneider, 2 a). All companies want to make a name for themselves. What did Ford and Firestone know and when didthey know it? Ford and Firestone should not have deprived millions of theirright to know about product safety. The maingoal of both Ford and Firestone was to get through the crisis with theleast amount of harm to either company, with private settlements andwithout public outcry. Retrieved from the World Wide Web, 8 June, 2 1, athttp://www.claimsmag.com/Issues/Jan 1/claims.asp. As Ford and Firestone were investigated,and as the federal government started its probe into the deaths, a patternof unethical practices in corporate America was revealed (Mokhiber &Weissman, 2 ). Are your tires safe? (2 , September 12). Not informing the public ofbad news is always more costly than to be honest. That act of faith meanscompanies should also protect the consumers from problems with theirproducts. The outcome of thecrisis might have been different if the truth had been exposed earlier. Firestone, Ford, DOT and the law. (2 , September 3). [He] sounded a clarion call to Ford and Firestone, warning that "when corporate officials know there is a danger which might cause the loss of life or serious bodily injury and they permit that situation to continue, that is a reckless disregard for the life of another." He added that this "rises to the level of second-degree murder" (Schneider, 2 b). Avoiding publicity is just another name for wanting to get away withit. Third, highest priority shouldhave been given to solve the problem rather than shifting blame (Pittle,2 ). G. By keeping lawsuits, opinions, and evidence secret from the public,the possibility of other people suffering similar fates increased(Gonsalves, 2 ). Retrieved from the World Wide Web, 8 June 2 1, athttp://usgovinfo.about.com/library/weekly/aa 912 a.htm?terms=motor+vehicle. In other words, the company forced those who hadbeen injured to give up some of their rights. Retrievedfrom the World Wide Web 8 June, 2 1, athttp://www.cbsnews.com/now/story/ ,1597,232511-412, .shtml. In thebusiness world, it involves answering the question of whether we are acting"in good faith, promptly, fairly and equitably, whenever liability isreasonably clear" (Claims, 2 1). (2 , December) Lessons from Firestone: Schneider, N. Pittle, R.D. Pattern of Ford cover-ups? References Claims-conscious iconoclast: Ethics in the E-age. It appears, therefore, that these deaths werebusiness as usual: minimize losses and maximize profits. Vlasic, B. Thenumber of deaths and injuries would have decreased also. Firestone problems raisequestions of safety. Family secrecy agreementswere one part of that. Meanwhile, Ford and Firestone's secrecy agreements sometimes barredall parties, including lawyers who brought the lawsuits, from discussingall aspects of the cases, including what they found out during theinvestigation (Hush, 2 ). Ford and Firestone The infamous series of deaths attributed mainly to malfunction ofFirestone tires on Ford Explorer vehicles provides a good platform forlooking at ethics in the business world. (2 a). USLaw.com Library. Retrieved fromthe World Wide Web 6 June 2 1, at http://www.commondreams.org/views/ 919 -1 7.htm. According to anindependent survey done by the market research firm, Dohring Co., therecall eroded consumers' trust in Ford and Bridgestone, a Firestone company(Vlasic, 2 ). Detroit News. All companies should be held liable for any defective products theyproduce, especially if they try to keeping defects a secret. Retrieved from the World Wide Web, 8 June 2 1, athttp://www.crosswinds.net/~vaxchoice/beliefs/examples.html. (12 October 2 ).
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