Answer to Question #287550 in Economics for saleemaslam

Question

Read the case to answer the following questions:

Case: The Ford Pinto | Business Ethics (uncg.edu)

Suppose you are trying to determine whether to go ahead with the existing Pinto design or to delay production and redesign. Taking a shareholder approach (Friedman), what action should you take given the information you have at the time of the decision and why? Taking a stakeholder approach (Freeman), what action should you take, and why?

Word Limit: (Not less than 430 words)

Answer 1

Taking a shareholder approach (Friedman) the goal of the firm is to maximize returns to shareholders, so the company will delay production and redesign.

Taking a stakeholder approach (Freeman) businesses are driven not just by profits, but by purpose, values, and ethics, so the company will go ahead with the existing Pinto design.