PRINCIPLES OF RESPONSIBLE COMMERCE (COMM 101) TUTORIAL PREPARATION WEEK 3 NAME: Chang Yee How UOW NUMBER: 4387296 Case Study: Ford Pinto 1. What moral issues does the Pinto case raise? The Pinto case brought up issue of abusing human rights and behaved unethically in business. Ford had the design to reduce the possibility of Ford Pinto from exploding. However, the company refused to implement it, although it can prevent 180 deaths from happening at a cost of $11 per car according to the cost-benefit analysis.
Bait and switch tactics are very rampant in the car industry and usually by the time a consumer views the ad—bait, the car is already sold. In this case they told Betty that Jim, who works in the service department, had purchased the car at 6 a.m. that morning, but offered to show her another car in which they would discount $1,000 due to the distance she drove—switch. Bait and switch sales tactics are a form of false or deceptive advertising, in which a car dealer lures potential buyers to the dealership by advertising one vehicle at a certain price, then tells the customer that the particular vehicle is no longer available. They also use aggressive tactics to sell a different, more expensive vehicle or the advertised vehicle at a price higher than the advertised price. Because the vehicle was sold and because the dealership notated the specific serial number in the ad for the one truck that they were selling for $11,399.00, the dealership is not obligated to sell any additional cars at this advertised price and the they are not required to perform in accordance with the published advertisement When Tony said over the phone “three thousand dollars firm,” explain whether or not he was making an offer that, if accepted, would bind the
Walmart administrative assistant Chalace Eply Lowry was hired by the company in January 2007 soon after she filed a complaint against a vice-president of corporate communications, Mona Williams for the possibility of an ethics issue. Lowry was asked by Williams to copy papers that she thought were related to stocks, and a few days later it was announced that Walmart was planning a $15 billion stock buyback, and she was concerned that Williams may have used insider information to exercise her stock options and make money off of the buyback. Walmart responded that Lowry was simply confused and that she mistook a deferred compensation form for an options exercise request and that there was no wrong-doing by Williams. Soon after she filed for the complaint, her identity was disclosed to Williams, something Walmart claimed Lowry agreed to. Lowry, however, stated that she was never given a choice, and subsequently requested a transfer to another department.
No one made Betty drive that length for that car. She could have gone to another dealership closer to where she lives or that has a similar truck to what Betty was looking for. Now the dealer has a responsibility to sell to its customers before anyone else. The fact that Rally Motors sold an advertised vehicle to an employee was ethically wrong, but the dealer broke no laws by doing so. When Tony said over the phone “three thousand dollars firm,” explain whether or not he was making an offer that, if accepted, would bind the dealership in contract.
In 1970 Ford Motor Company launched their new line of automobile called the Ford Pinto; they used a cost-benefit analysis based strictly on how the consequences will affect themselves as a business and not as an ethical analysis. The Pinto compact car was extremely popular in the United States market because of its design and affordability. However a controversy issue regarding the safety of the design of the car gas tank emerged causing deadly fires, explosions and claiming the lives of many people, even though managers and engineers of the company knew about this problem. The argument has been for many years that Ford Motor Company abandoned and abused the utilitarian principles to suit their needs, even though they stayed within the laws of the time, they still behaved unethically by making the decision not to upgrade the fuel system of their product. The model of the Ford Pinto was approved by Lee Iacocca, Executive Vice-president of Northern American Automotive Products for Ford.
There was strong competition for Ford in the American small-car market from Volkswagen and several Japanese companies in the 1960’s. To fight the competition, Ford rushed its newest car the Pinto into production in much less time than it usually required to develop a car. The regular time to produce an automobile is 43 months; Ford took 25 months. Before production however, Ford engineers discovered a major flaw in the cars design. In nearly all rear-end crash test collisions, the Pinto's fuel system would rupture extremely easily.
Included with the statement was a credit memorandum of $185 indicating the collection of a note receivable for Fetter Company by the bank on October 25. This memorandum has not been recorded by Fetter. The company’s ledger showed one Cash account with a balance of $21,877.72. The balance included undeposited cash on hand. Because of the lack of internal controls, Allan took for personal use all of the undeposited receipts in excess of $3,795.51.
| Waltham Motors was recently sold to Marco Corporation after being owned by and operated as a family business servicing the home appliance manufacturers. Soon after Marco Corporation acquired Waltham they transferred Sharon Michaels from corporate headquarters to the Waltham Motors Division. She was apprehensive about changing any of the companies accounting practices until she was onsite and able to analyze how the loss of a major contract would affect the company’s business. Question 1 * Using budget data, how many motors would have to be sold for Waltham Motors Division to break even. To determine the breakeven first we must divide the total variable cost by the number of projected units to be manufactured.
Proprietorship has three important advantages: it is easily and inexpensively formed; its subject to few government regulations and; its income is not subject to corporate taxation but is taxed as a part of the proprietor’s income. Limitations include: difficulty obtaining capital needed for growth; having an unlimited personal liability for business debts can result in losses that exceed the money invested in the company and; life of a proprietorship is limited to life of its founder. For these reasons sole proprietorship is used mainly for small businesses. A partnership exists when there are two or more persons or entities associate to conduct non-corporate business for profit. Partnership agreements define the ways that any profits and losses are shared between partners.
Secondly, acceptance must be firm and finally must be communicated to the offeror. In this way, offeree has to make the acceptance with communication to the offeror. There are a lot of ways to communicate but the law relating to communication comprehends plenty different rules. Maurice, a car dealer, was sent an email to Austin offered to sell him a rare vintage car for 50,000 pounds. Austin after reading the email, he realizes that he wants the car and email back his acceptance at 1.00 p.m. By the time Austin sends the email, he was aware that Maurice would be close for lunch.