Managerial Decision Making

Visit the website and read the article concerning the Ford Pinto. How did the decision making process help to create the problems for the Ford Pinto? Do these decisions represent optimizing behavior or satisficing on the part of Ford? If you were Lee Iacocca, would you have decided differently? How?
This is a very interesting and thought-provoking article. Let’s examine some of the issues that led Ford officials to making one of the most unfavorable business decisions in company’s history.
The Impact of Decision Making Process:
1. Lee Iacocca became victim of overestimation of conjunctive-event bias. He overestimated the probability off VW’s market dominance in the small to compact car segment. Therefore, he forced everyone to make the Pinto project one of the top priorities and the project was rushed from the beginning until completion. This urgency led to making quick decisions that were not well thought out and many critical components of the project were completed without proper planning.  
2. Ford officials exhibited representativeness heuristic when actively lobbying against the safety standards. They put a lot of effort in convincing the government that people or drivers were the biggest cause of fatal accidents. They had tough time accepting the fact that minor changes in vehicles could greatly reduce the possibility of fatal accidents, which explains their negligence towards addressing the mechanical issues related to Pinto’s fuel system.
3. Placing a value over human life was an inappropriate approach used by Ford. This strategy also contributed to damaging Ford’s overall reputation. By using this approach, Lee Iacocca and his followers exhibited a bias that emanates from confirmation heuristic – called anchoring.
Do These Decisions Represent Optimizing Behavior or Satisficing?
All decisions represent satisficing on the part of Ford. Generally, satisficing can lead to missing out on the optimal...