Business

1. Facts and Assumptions The case study focuses on the rising number of accidents involving Ford SUVs fitted with Firestones tires. Judging by the high number of cases, culpability lay with either the tire manufacturer or the auto company. Both entities knew about the problem but rather than face up to it they opted to prevent the story leaking to the public. Their major concern was the high costs of initiating a total recall of suspect tires or faulty vehicles.

 2. Major Overriding Issues  Problems By failing to disclose to the authorities and the public, the inherent risk of buying a SUV fitted with Firestone tires, both companies are liable for any injuries occasioned by tire defects and vehicle accidents.  Quality control at the Decatur plant was compromised in the aftermath of the strike. Rather than address this issue, Firestone ignored the possible consequences, as it was more interested in profit maximization than it was in safety issues.  Fords maintenance teams disregarded advice from Firestone engineers with regard to tire pressure under inflating the tires contributed to greater instability for the SUVs.

3. Sub-issues and Related Issues Firestone officials accuse Ford of manufacturing a vehicle that was not stable and, advising their customers to inflate their tires with a lower than recommended tire pressure as suggested by Firestone Company. The issue of negligence arises as Ford Company ignored the advice of experts and put the consumers lives at risk. Firestone placed tires in the market with the knowledge that such tires had not passed quality control standards. These sub issues highlight the discordance between two complimentary firms seeking to increase their market share in a competitive industry. Instead of collaborating to produce goods of high quality, they seem to be operating at cross-purposes.

4. Stakeholder Analysis The major stakeholders in this case study are the press, employees, shareholders in the two companies, owners of Ford SUVs fitted with Firestone tires, NHTSA, and top management at Ford and Firestone Companies. The way the saga develops has a major bearing on the market value of the shares. Investors are keen to know what will happen to their investment and would prefer a speedy conclusion to the whole matter, which reduces further erosion of stock prices.

By breaking the story, the press were fulfilling their role as the peoples watchdog.  Avarice, dishonesty and mega-scandals perpetrated by company executives at the expense of the public good need to be exposed otherwise, the press would be accused of failing in their duties.  This case acquits the press of ineptitude.
Employees may lose their jobs should the firms lose their market edge and close down because of quality concerns. The management must do whatever it takes to operate with integrity and thus ensure a ready market for the firms products.

Oversight bodies like NHTSA often fail in their duties to safeguard the public interest for various reasons. This case highlights NHTSAs predicament and places Congress on the spot for creating a body that is ineffective when it comes to enforcement. Both Congress and NHTSA are keen to prove that they can work efficiently to ensure the public does not suffer loss.

Competitors have a lot to gain from fallout between the two companies. Ford will begin to look for a new supplier while Firestone would be forced to negotiate with another company. Quality concerns will encourage clients to shift their preferences to other makes like Nissan or Bridgestone. In the final analysis, these two companies will lose a large part of their market share and most likely, they will experience financial difficulties.

5. CSR Analysis Both companies have a corporate responsibility to all stakeholders. By failing to present relevant information to the press and concealing the number of lawsuits filed against them, Firestone and Ford acted irresponsibly. The public have a right to know all relevant information about a product and full disclosure by the company is important. This right takes precedence over the firms economic concerns. Risking the lives of their customers to make a profit goes against accepted social norms.

Investors interests must be protected at all times. The management of a firm should ensure that all decisions reflect this concern. Selling faulty tires and compromising customer safety has an impact on future sales, as clients will avoid those companies that place a higher premium on profit margins than on customer satisfaction. Scandals cause investors to shy away from stocks thus leading to a fall in share prices and a devaluation of investors portfolios.  Apparently, managements of both firms ignored such considerations.
By recalling Firestone tires on Ford SUVs and compensating clients, Ford Company, proved that it was a responsible citizen. Firestone chose to battle out in the court despite overwhelming evidence that their tires were defective. By valuing money, more that the lives of its clients, Firestone failed to act as a responsible corporate citizen.

6. Evaluation Both companies displayed poor sense of judgment in seeking to conceal information regarding issues with their vehiclestires. The management of both firms failed to work as a team to address the various issues they were facing. Instead of tackling the problem, they resorted to blaming each other.

NHTSA failed to carry out their mandate diligently as set out in the charter. This case revealed major flaws in the law and enforcement issues that allowed both firms to conceal vital information. Officials of NHTSA cannot escape censure for failing to alert the government of these issues. Congress must act immediately to empower NHTSA to deal with cases of this nature

7. Recommendations and Implementations Congress should review the mandate of all bodies charged with overseeing compliance and public safety to make them more effective in dealing with cases of negligence. Both companies need to ensure that quality control and testing are of the required standards.

Stringent rules should be established to ensure that companies regularly report lawsuits filed against them concerning product performance and quality.  Companies must reveal product testing and accident results to enable oversight bodies establish inherent weaknesses in product designs and manufacture.