Ford Pinto: Is Cost-Benefit Analysis Allowed in Ethical Decision Making?

Abstract

The Ford Pinto case was a major scandal during the 1970s. In order to lower costs of production, Ford managers chose not to install a hull to the gas tank of the Pinto model that would have prevented leakages of fuel during crashes. The case is presented here as a study for critically discussing the role cost-benefit analysis plays in ethical decision making.

The development and increased awareness of business ethics started in the US during the 1970s, as a consequence of several corporate scandals. One of these was the case of the Ford Pinto, which continues to provide a number of important lessons about the ethical behavior of corporations.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

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