3. Identify the relevant stakeholders. (8 marks) 222 Corporate Obligations and R

Question

3. Identify the relevant stakeholders. (8 marks)

222 Corporate Obligations and Responsibilities: Everything Old Is New Again Case Study The Ford Pinto W. Michael Hoffman On August 10, 1978 a tragic automobile acci- As a background to this trial some discussion dent occurred on U.S. Highway 33 near of the Pinto controversy is necessary. In 1977 Goshen, Indiana. Sisters Judy and Lynn Ul the magazine Mother Jones broke a story by rich (ages 18 and 16, respectively) and their Mark Dowie, general manager of Mother Jones cousin Donna Ulrich (age 18) were struck business operations, accusing Ford of from the rear in their 1973 Ford Pinto by a ingly putting on the road an unsafe car-the van. The gas tank of the Pinto ruptured, the Pinto-in which hundreds of people hav car burst into flames and the three teen -agers needlessly suffered burn deaths and even more have been scarred and disfigured due to burns. In his article "Pinto Madness" Dowie were burned to death. Subsequently an Elkhart County grand jury returned a criminal homicide charge charges that: against Ford, the first ever against an Ameri can corporation. During the following 20- Fighting strong competition from Volkswagen week trial, Judge Harold R. Staffeldt advised fr the lucrative small-car market, the Ford c- Motor Company rushed the Pinto into produ the jury that Ford should be convicted of reckless homicide if it were shown that the tion in much less than th gineers discovered in pre-production crash tests e usual time. Ford en- company had engaged in plain, conscious that rear end collisions would rupture the and unjustifiable disregard of harm that Pinto's fuel system extremely easily. Because might result (from its actions) and the disre- assemblyline machinery was already tool gard involves a substantial deviation from ac- when engineers found this defect, top Ford of ceptable standards of conduct." The key f ficials decided to manufacture the car anyway exploding gas tank and all-even though Ford phrase around which the trial hinged, of d the patent on a much safer gas tank. For ourse, is "acceptable standards." Did Ford more than eight years afterwards, Ford success knowingly and recklessly choose profit over bbied, with extraordinary vigor and safety in the design and placement of the some blatant lies, against a key government Pinto's gas tank? Elkhart County prosecutor safety standard that would have forced the com- pany to change the Pinto's fire-prone gas tank fichael A. Cosentino and chief Ford attor- By conservative estimates Pinto crashes ha ney James F. Neal battled dramatically over caused 500 burn deaths to people who would this issue in a rural Indiana courthouse. not have been seriously injured if the car had Meanwhile, American business anxiously not burst into flames. The figure could be as awaited the verdict which could send warn- high as 900. Burning Pintos h ing ripples through board rooms across the an enm and product liability Copyright 1982 by W. Michael Hoffiman, Reprinted with permission. embarrassment to Ford that its advertisin gency, J. Walter Thompson, dropped a line leaves you with that warm feeling nation concerning corporate responsibility from the ending of a radio spot that read "Pinto

Explanation / Answer

It is a an example of white collar crime where profit is prioritized over ethical concerns

Relevant stakeholders

1- Consumer- These are the consumers who trust a company and itz product but so many deaths and burns affected people badly.

2- Brand itself- The trust on ford was built in so many years but destroyed in some days due to this Pinto fire incident.

3- Management and product engineers- Management knows the faukt in fuel tank as engineers informed but both keep mum and not taken corrective measures needed.

4- Employees and corporate shareholders- Employees suffered as they were working in a company and had no direct connection with the issue but for them it was not good time working in a company who held responsible for deaths. Shareholders faced financial issues as share got down.

5-Federal auto-safety bureaucrats, political lobbyists- They were also involved as no car can be bought for public without necessay risk test and auto safety standards passed that model of ford which shows their inefficiency and also the attitude of political lobbies who supported Ford even after knowing that they were wrong.

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