Academics

Recalling Ford: Gioia shares Pinto lessons in the classroom, The New Yorker

Denny Gioia draws on his experiences at Ford Motor Company to address recurring themes in his Penn State Smeal College of Business MBA and Executive MBA classrooms. Credit: Penn StateCreative Commons

UNIVERSITY PARK, Pa. -- Decision making with limited or ambiguous information is a recurring theme in Denny Gioia’s MBA and Executive MBA classes. One case he frequently uses to illustrate the implications of leading in the real world of business and working within powerful corporate cultures is based on lessons learned as a young employee at Ford Motor Co.

Gioia, the Robert & Judith Auritt Klein Professor of Management and chair of the Department of Management and Organization at the Penn State Smeal College of Business, served as Ford Motor Co.’s recall coordinator in the early 1970s during the infamous Pinto fires controversy. The Pinto, one of Ford’s top-selling compact cars at that time, caught fire when struck from behind at residential speeds.

That case, and Gioia’s involvement in it, is a key aspect of a recent article by author and journalist Malcolm Gladwell in The New Yorker.

In The New Yorker:The Engineer's Lament: Two ways of thinking about automotive safety.

In class sessions on the topic, Gioia explains the painstaking process used at the time to evaluate potential recall situations. As he told Gladwell: “You have to be able to identify something that’s breaking. Otherwise, I’ve got an imaginary event. I try not to engage in magical thinking. I’ve also got to have a pattern of failures. Idiosyncrasies won’t do. Question is, do you have enough here indicating that these failures are not just one-off events?”

When dissecting the Pinto case in class, Gioia asks students a series of questions about the situation, initially masking the fact that he was directly involved. Eventually he reveals his former role at Ford and fields specific questions from students, requiring them to ferret out more detailed information and issues concerning the case.

“By the time it’s done, it places them in the context of being an organizational decision maker and having to make a consequential decision,” Gioia said. “After hearing about all the factors involved, most people conclude that they would have made the same decisions I did even if, in retrospect, they might not have been the most effective decisions.”

Because of the Pinto case, Ford eventually was sued as a corporation, a first in business history. That, Gioia said, is one reason a case that is more than 40 years old is still relevant to modern business practice.

“The Pinto fires case set the template for all following recalls. That’s why we do it in the MBA program,” he said. “It’s a historically significant case. It was the first case in business history where a corporation, not the individual decision makers or executives in the corporation, but the corporation itself was charged with a crime – and the crime was not negligence; it was murder. You can’t find a bigger precedent.”

In his interview with Gladwell, Gioia also pointed out one of the realities students — and all employees — face when they join the ranks of a large organization: culture matters.

“Gioia says he went to Ford with the idea that he would ‘fight them from the inside,’ but sooner or later, inevitably, the world that surrounds us, all the working day, takes precedence,” Gladwell wrote. “‘Here’s a guy that went in with a strong value system, with intent and purpose, and got flipped within the space of two years,’ (Gioia) went on. ‘If it could happen to me, it could happen to anybody.’”

Gioia tells The Conversation:Why automakers so frequently botch product recalls

More than four decades later, Gioia’s time at Ford continues to resonate. He draws on his experiences in his teaching and research, and he’s not shy about discussing the lessons that can be learned.

“There’s nothing you can say to me that I haven’t heard before, good or bad,” Gioia said. “What I got from Malcolm was not sympathy but understanding. And that’s more important. He got it. He understood what it means to have a problem-solving orientation toward a very complex technology and business environment. You can’t ask for more.”

Last Updated May 26, 2015

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