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Updated Pinto Casestudy

In: Business and Management

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Pinto case
Charles Petch
MGT/216
SEPTEMBER 1,2010
Anita White

Pinto case When someone makes a mistake, the corporation should assume responsibility and admit his or her wrongdoing. Now that safety has become a marketable feature of motor vehicles, firms like Ford make a point to display their state-of-the-art airbags or crash test ratings. Like the Mafia and other structured organizations, the ford motor company operated with internal social capital while neglecting its relationship with the outside world. (1) If consumers had known that hundreds of thousands of Pintos would explode in low-speed crashes and that scores of deaths would result, they would have likely have been willing to a little more. Had Iaccoca measured the long-term benefits of engendering consumer trust through safe vehicles, Ford might have averted the negative economic repercussions of the Pinto recalls including the subsequent bad publicity. (2) Meeting obligations is, according to Fukuyayam, an essential component of social capital. In Iaccoca's time, "safety didn't sell,” When Gioia recognized the scripting involved in his personal decision-making processes, Gioia also admitted that ford operated with internal social capital but not external social capital. Implied that cutting safety costs outweighed possible losses due to injury or death. (3) The cost-benefit analysis conducted by Ford did not include the value of social capital. Underestimating the value of social capital undermined the company's integrity and its reputation. While they demonstrate genuine loyalty to their fellow employees and to shareholders, managers do not cultivate social capital with stakeholders: consumers and society at large. In fact, the primary features of social capital: truth telling, meeting obligations, and reciprocity, parallel the Puritan ethical values that fuel Western capitalism.…...

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