The Ford Pinto scandal and ethical leadership in corporate crises

Navigating Ethical Dilemmas in the Workplace

During the 1970s, Ford Motor Company executives learned that the gas tanks in their Pinto automobiles were vulnerable to rupture and explosion during rear-end collisions with other automobiles. At the time, Ford executives made the fateful and misguided decision to withhold this information from the public based on a pragmatic cost-benefit analysis that compared to the costs of recall with defending the dozens of lawsuits that would invariably result but which did not take into account the costs of human lives and suffering that were involved (The Ford Pinto, 2017). Although the exact number remains unclear, industry analysts suggest that as many as 500 Pinto owners suffered fiery deaths as a result of this fateful decision by Ford (The Ford Pinto, 2017). The public relations nightmare that ensued following the disclosure of Ford’s decision combined with the eventual recall of all Pintos meant that the company experienced far more negative consequences as a result of this cost-benefit analysis than expected. It is reasonable to posit, though, that at least some Ford executives and employees felt compelled to disclose this information to the public at the time, but failed to do so for fear of losing their own jobs. The Ford-Pinto scandal is highly analogous to the scenario confronting a sales representative for a medical device company that manufactures artificial joints that have been shown to cause potentially life-threatening infections in some patients. This paper provides a discussion concerning the ethical dimensions of this scenario and how a sales representative with this knowledge should respond. A. Select a leader who you feel has exhibited exemplary ethical conduct to do the following: 1. Discuss two ethical traits that your chosen leader has demonstrated. One of the most frequently cited corporate leaders who has consistently demonstrated ethical practices in the workplace is James E. Burke, former chief executive officer of Johnson & Johnson from 1976 to 1989 (Mitroff & Anagnes, 2009). Two ethical traits that Burke demonstrated in response to the high-profile Tylenol crisis in late 1982 were his transparency and honesty in his dealings with the public in response to this crisis that cost seven lives and his willingness to recall tens of millions of dollars worth of products from store shelves despite the economic loss it represented for Johnson & Johnson because it was in the public’s best interests (Martin, 2016). 2. Explain how your chosen leader has exhibited ethical conduct. Notwithstanding his effectiveness in leading Johnson & Johnson to unprecedented profits during his tenure, he is best known for his role is responding to the above-mentioned Tylenol crisis (Mitroff & Anagnes, 2009). As Martin emphasizes, “Burke’s ethical leadership highlights the difficulties of the corporate world and the need of creating a trust-based relationship with the organization’s customers” (2016, para. 4). To his credit, Burke responded to the reports of the poisonings immediately by recalling all Tylenol products nationwide and permitting media representatives to attend company meetings about the crisis. At the time, Burke reasoned that the immediate recall was the only ethical course of action because it was unclear how many capsules had been contaminated. In this regard, Mitroff and Anagnes (2009) emphasize that, “Not only had somebody injected Tylenol with poison, but, worst of all, nobody knew how many different lots had been infected” (p. 14). In addition, Burke directly addressed the American public through a series of television appearances where he explained what steps the company was taking to prevent recurrences and to restore trust with Johnson & Johnson’s brand (Martin, 2017). Furthermore, the costs of all of the additional safety precautions that were developed in response to this crisis were paid for by the company and the additional costs were not added to the price of the product (Martin, 2017). B. Analyze the dilemma found in the scenario from both the consequentialist and deontological perspectives. From a consequentialist “the ends-justify-the-means” perspective, the new artificial knee joint stands to benefit more people that it may harm, so the apparent course of action would be to proceed according to the current plan by not releasing any information concerning the potential for infection. In this regard, Crowden (2010) notes that, “Consequentialism emphasizes good results as the basis for evaluating human actions” (p. 55). Artificial knee-joint candidates, however, have access to numerous alternative artificial knee joint replacements that do not carry the same elevated risk of infection. As the actions taken by Burke in response to the Tylenol crisis made clear, a deontological perspective would compel the company’s leadership to be completely transparent about the additional risks that are involved with their artificial knee joint notwithstanding its additional beneficial attributes. In sum, this medical device manufacturer could easily rationalize the decision to withhold the negative information about its artificial knee joints based on its potential to contribute to the greater good, but this rationalization simply reduces the human pain and suffering that could result to the same type of pragmatic and cold-blooded cost-benefit analysis used by Ford Motor Company executives in their handling of the Pinto. The type of decision that the leadership at the medical device company would make in this case can be categorized according to the three levels of cognitive moral development described below. 1. Discuss which level of cognitive moral development (i.e., preconventional, conventional, or postconventional) is represented in the scenario for each of the following questions: • What action would be best for society in the long term? A postconventional action that would be best for society in the long term would be to make full disclosure of the artificial knee joint’s heightened risk of infection as well as its beneficial attributes. • If I reveal this information, will my company find out and fire me? Conventional reasoning would balance the need for an individual to earn a living and support a family against the ethical imperatives represented in the artificial joint scenario. • Which course of action would best serve justice? The aforementioned postconventional full disclosure strategy would best serve justice in this scenario. • Are there any laws that indicate whether I should disclose this information? Although the federal government has enacted so-called “whistleblower” laws that protect employees who disclose unethical business practices, but employees must generally follow relevant codes of ethical conduct for their profession and their own conscience in formulating appropriate responses to these types of scenarios unless there are industry-specific regulations requiring disclosure. • If I keep quiet, will my company reward me for that? Pre-conventional reasoning would place an individual’s self interests above those of society at large. C. Submit a copy of the PDF file with your results from the Ethical Lens Inventory (ELI), which was completed in the course of study, as a separate document. D. Reflect on the ELI by doing the following: 1. Explain your preferred ethical lens or what it means to have none if you have no preferred ethical lens. As shown in Figure 1 below, the preferred ethical lens identified in this exercise was mild sensibility and mild autonomy (MSMA).

Figure 1. Graphic results of the Ethical Lens Inventory This rating means that individuals with an MSMA ethical lens tend to rely on intuitive reasoning (this is the sensibility element) to identify the greatest good for themselves and others (this is the autonomy element). This ethical lens also means that people so rated tend to “follow their heart” rather than “follow their head” in making decisions. a. Analyze whether you have the same preferred lens in different settings (i.e., work, personal, social). In workplace settings, individuals rated with an MSMA ethical lens tend to assert their autonomy less than in personal or social settings. This means that in the workplace, MSMA individuals are slightly more likely to be influenced by the group’s opinion or expectations compared to personal or social settings. 2. Describe one of the following: your blind spot, risk, temptation, or vice. The somewhat-startling blind spot identified in the Ethical Lens Inventory was that individuals with an MSMA rating are “satisfied with too little good.” In truth, this was an eye-opener since I have always prided myself on setting high expectations for myself but in retrospect these same expectations have not been applied to others. This type of blind spot can easily result in overlooking or otherwise ignoring less-than-ethical behaviors or practices by others based on the spurious rationale that they simply do not share the same level of expectations or ethical compass. In this regard, the ELI concluded that, “Because you want to make people happy and are in tune with what others might prefer, you may take the path of expedience and be satisfied with too little good as you don’t hold yourself and others accountable for the consequences of their actions” (p. 6). a. Discuss three steps you can take to mitigate your chosen blind spot, risk, temptation, or vice in order to make better ethical decisions in the future. The identified blind spot can be mitigated by (a) remaining vigilant concerning the behaviors and actions of others in the workplace; (b) avoid being overbearing by recognizing that others do not necessarily share the same goals and principles; and (c) gather all of the relevant facts in order to avoid making decisions that are based solely on what is expedient or personally advantageous. 3. Explain your core values and classical virtue(s) from the ELI. The core values identified in the Ethical Lens Inventory were sensibility and autonomy and the classical virtues were moderation and self-restraint. Although each ELI element was scored in the “mild” range, this combination of core values and classical virtues means that a higher priority is placed on selecting life goals and the optimal career path to achieve them, but these plans can be influenced and changed by others along the way. a. Discuss how these core values and classical virtue(s) compare to the top five values from the Clarifying Your Values exercise, found in the course of study. The top five values identified in the Clarifying Your Values exercise were as follows: 1. Customer Satisfaction; 2. Action orientations; 3. Order; 4. Initiative; and, 5. Helpfulness. A comparison of the these values with the core values and classical virtues in the ELI would depend on how these top five values were operationalized but there are some identifiable connections and relationships, including the tendency of individuals rated MSMA to seek compromise solutions that satisfy as many people as possible and the desire to proceed in a methodical fashion that avoids disappointments and the unexpected. 4.