The Ford Motor Company decided to produce the first lowest-priced

car in the USA. The Company President Mr. Lee Lacocca wanted to
rush the development of a car costing less than $2,000, as he
promised the public that his company will bring out a car at that price
(as low as $2,000) and also fight the growing popularity of
Volkswagen’s Beetle. Preliminary tests showed that it involved an
additional cost of $11 to enhance the safety of the car.
He organised a meeting of company executives to decide how to
reduce the cost below $2,000. Many executives suggested that the
company should sell the car at $2,011 but include the safety feature.
Some executives thought that the company should sell the car at
$2,000 as promised but exclude the safety feature. The company
decided to go ahead without the safety feature.
The car was released and sold at $2,000. After six months of release,
one of the cars was involved in an accident killing all the passengers.
Competitors influenced newspapers to publish this accident and the
newspapers in the U.S.A. highlighted the absence of the safety feature.
This incident resulted not only in the loss of sales, but also in the
closure of the unit resulting in a loss of $250 million to the company.
This case indicates that business should consider ethical principles
while making decisions in order to achieve its basic objective of
survival. Thus, competition forces businesses to conduct their business
ethically. Increasing literacy, widespread use of information
technology and declining sellers markets after globalisation reduce the
scope for debating on the need for conducting business ethically.
The problem regarding ethics before globalisation had neither been
due to lack of information and knowledge nor due to the non-
acceptance of principles of ethical behaviour underlying such
knowledge, but it was due to avoiding attitudes developed by business
people towards law consequent upon the opportunity provided by the
sellers’ market. The issue, now, is to treat ethics as part of human
behaviour and part of making individual and collective business
decisions. Many business people are religious individuals, but their
business suit makes them blind towards human suffering.
They used to get away with unethical behaviour more often under
conditions of a seller’s market, i.e., where the seller holds the power in
the market place. In fact, when conditions change and the market
environment becomes a buyer’s market, this more often than not
causes business people to realise that behaving ethically is not only in
their interest in their personal life but also in business life, especially
over the longer term.