CONCEPT OF UTILITARIANISM
ETHICAL PRINCIPLES IN BUSINESS
I know this word “Utilitarianism” is a tongue twister. I can see
some of you trying really hard to figure out that what this word
actually means. In Business Ethics, the concept of “Utilitarian-
ism” is an important one.
Points to be covered in this lecture:
• Utilitarianism – concept, measurement
First of all let me explain you the meaning of this concept.
Utilitarianism – It’s Meaning and Nature
• In the early 1960s, Ford’s position in the automobile market
was being heavily eroded by competition from foreign
automakers, particularly from Japanese companies making
compact fuel-efficient cars. Lee Iaccoca, president of Ford at that
time, was desperately trying to regain Ford’s share of the
automobile market. His strategy centered on quickly designing,
manufacturing, and marketing a new car to be called “Pinto”.
The Pinto was to be a low cost subcompact that would weigh
less than 2000 pounds, cost less than
$2000, and be brought to market in two years instead of
normal four. Because the Pinto was a rush project, styling
considerations dictated engineering design to a greater degree
than usual. In particular, the Pinto’s styling required that the
gas tank be placed behind the rear axle where it was more
vulnerable to being punctured in case of a rear-end collision.
When an early model of the Pinto was crash-tested, it was
found that when struck from the rear at 20 miles per hour or
more, the gas tank would sometimes rupture and gas would
spray out and into the passenger compartment. In a real
accident stray sparks might explosively ignite the spraying
gasoline and possibly burn any trapped occupants.
Ford managers decided, nonetheless, to go ahead with the
production of the Pinto for several reasons. First the design
met all the applicable legal and government standards then in
effect. At the time government regulations required that a gas
tank only remain intact in rear-end collision of less than 20
miles per hour