Term Paper: Ford Pinto and Corporate Crime

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[. . .] While such a "seal" seems improbably today, it should be noted that this dichotomy of duties were in place in the early 1970s, before the era of the Internet or even cable television. Many of the regulations were written in complex legal terms, and new ones were being developed each day in response to the growing pressure from consumer activists like Ralph Nader. As such, the system worked well to regulate the information that was relayed to the technical core, as well as the information that went out to the other departments.

Furthermore, many analysts point out that the Ford Pinto crashes came at a time when vehicle designs were still unregulated by the government. Despite efforts on the part of people like Nader, the prevailing view was that automobile accidents were caused not by flawed designs, but by reckless or careless drivers (Gusfield 1980). Furthermore, the prevailing ideas regarding safety held that a company was only responsible for a consumer's safety during the "normal operations" of a vehicle. Accidents and collisions resulting in burns, however, fell outside the realm of normal operations (Mashaw and Hartz 1990).

All these factors contributed to several automobile industry norms that provided a rationale for accepting the lower crash-test safety levels on smaller cars. At the time, the norm was to offer safety devices such as the gas tank modification as an additional option rather than standard equipment with the purchase of a vehicle.

The prevailing wisdom also held that smaller cars could not be expected to be as "crashworthy" as their bigger counterparts. To hold smaller cars like the Ford Pinto to higher fuel tank integrity standards would therefore constitute a form of discrimination against the smaller vehicles (Eastman 1984).

Viewed in this light, the Ford Pinto case could be studied beyond the narrow confines of greedy, profit-hunger or amoral executive. Instead, it is a confluence of many social and internal regulatory factors, which in turn have greater implications for other organizational structures as well.

Administrative evil and the lack of regulation

Technical Core closer inspection of Ford's organizational structure shows many instances where an unchecked "administrative evil" furthered the lack of communication in Ford. The engineers, designers and other workers in Ford's technical core were thus working in a fairly insulated environment, informed of the increased competition and unaware of the campaign for greater safety standards.

After all, the secondary importance of safety standards was not unique to their company alone. Instead, the late 1960s were an era of automobile styling. For most other automobile makers and ostensibly, consumers, the issue of safety took a back seat to how the car looked (Eastman 1984).

Because of the compartmentalized departments and the strict division of labor within the company, most of the original engineers who designed the Pinto were no longer part of the safety and marketing tests (Strobel 1980). A technical core engineer's presence at the testing facility may have gone a long way to improving the small car's safety.

Based on Adams and Balfour's interpretation (1998), this insulated working environment has thus made the designers and engineers of the Ford Pinto into the unwitting agents of administrative evil. In the beginning of their work, these workers were largely unaware of the necessary standards that would have contributed to the creation of a safer product. Instead, they were charged with a compartmentalized task - designing and building a small car. The results of their efforts (i.e. The car's safety tests) were also conducted outside their purview. The result of these factors was the creation of an unsafe vehicle.

The Boundary Spanners

In his book Reckless Disregard, Kunen (1994) sheds more light on the infamous cost-benefit memo that supposedly stated how it would be more profitable to pay 180 burn victims $200,000 each rather than to install a $11 safety feature on every Pinto gas tank. To the general public, this document was seen as the ultimate proof of Ford's callousness.

However, Kunen (1994) also acknowledges that the memo was written well into the Ford Pinto's marketing stage. The memo was never shared with the engineers in the technical core, and in fact was written after the car had already been designed.

As such, the memo could not have influenced the Ford Pinto's design.

Furthermore, the memo pertained not only to the Ford Pinto, its performance in crash tests or the Pinto's fuel tank. Instead, the memo addressed a separate federal proposal to install a valve to prevent fuel leakage in cars and trucks during rollovers.

In addition, the figure of $200,00 was estimated by the NHTSA, and not by Ford (Kunen 1994).

It is also important to note that the spanners were not engineers themselves. Rather, they were considered "egghead" economists and risk analysts, who were charged with calculating possible costs and imagining possible scenarios. The incriminating report should thus also be read not only as a calculation of human life, but also in light of the prevailing safety standards and the compartmentalized organizational structure at Ford.

Government regulations

Though the NHTSA eventually heeded the safety reports and recalled the Ford Pinto, it was also guilty of significant lapses in regulation. However, as an organization, the NHTSA was also plagued with its own institutional problems. The agency was still in its infancy, having been newly created in 1968. Its numerous studies on highway accidents and automobile safety pointed to a myriad of causes, from the need for tougher drunk driving laws to installing guardrails and reflectors. The calls for automobile safety standards also ran the gamut, from airbags and seatbelts to, in the case of the Ford Pinto, fuel tank modifications (Mashaw and Harfst 1990).

To further compound the problem, boundary spanners from the auto industry contributed their own studies, shifting the responsibility of accidents and vehicle safety squarely on the driver.

Given the volume of ambiguous data, focusing on any one single item to regulate was a Herculean task. Though several committees were assigned to study the separate proposals, the institutional set-up of separate departments will not foster communication within the departments. In fact, the NHTSA only moved for the recall when Dowie's expose triggered widespread calls for action.

Corporate crime and administrative evil

Conventional wisdom attributes corporate crime to greed.

Corporations from Ford in the late 1970s to more recent examples like Enron supposedly risked their customers' and employees' lives and financial well being at the altar of profit. However, while the position may hold some merit, it is also inadequate in describing how such reckless behavior can get past both the regulatory checks both from within their companies, as well as the relevant government agencies.

The case of the Ford Pinto illustrates how the organizational structure prevailing in most private and government corporations gives rise to such lapses. Within the Ford Company, for example, the technical core of engineers and designers were focused on the task of quickly designing a sub-compact vehicle. Because of this, they were shielded from outside reports regarding the changing and conflicting government regulations. They also no longer participated or contributed their expertise to the Ford Pinto's safety and testing phase.

This lack of interaction was mirrored at the government level, in the number of NHTSA committees studying different causes of vehicle crashes. The problem was thus not a lack of regulation per se. Instead, the fledgling agency was overwhelmed with the sheer volume of areas that needed regulation.

In his book Trusted Criminals, Friedrichs (1996) suggests several methods to combat white collar crime. These include more vigorous policing of corporate crime, at both the state and private agencies.

While Friedrich's suggestions have merit, they should also be conducted in conjunction with structural changes within organizations. Despite their ineffectiveness, however, much of the compartmentalized organizational structures that unwittingly give rise to "administrative evil" remain intact. Vaughn's 1996 study, for example, concluded that the unsafe organizational culture at NASA laid the foundations for the Challenger explosion. Little reforms were made, however, and the tragic result was another shuttle explosion.

Thus, regulating white collar crime involves much more than simply blaming greedy capitalist corporations or calling for more regulations. It also involves reforming the organizational structures on which the roots of these crimes are deeply embedded.

Works Cited

Adams, Guy B. And Balfour, Danny L. 1998. Unmasking Administrative Evil. London: Sage Publications.

Cullen, Francis T.; Makestaad, William J. And Gray Cavender. 1987. Corporate Crime Under Attack: The Ford Pinto Case and Beyond. Cincinnati: Anderson.

Dowie, Mark. 1977. "Pinto Madness." In The Ford Pinto Case: A Study in Applied Ethics. Douglas Birsch and John H. Fielder, eds. Albany: SUNY Press, 1994.

Friedrichs, David O. 1996. Trusted Criminals: White Collar Crime in Contemporary Society. New York: Wadsworth.

Gusfield, Joseph. 1980. The Culture of Public Problems: Drinking-Driving and the Symbolic Order. Chicago: University of Chicago Press.

Hagan, Frank E. 1994. Introduction to Criminology. Chicago: Nelson-Hall.

Kramer, Ronald C. 1982. "Corporate Crime: An Organizational Perspective."… [END OF PREVIEW]

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