In car safety, why some companies merely meet a standard and others exceed it
7 days ago
- #safety regulations
- #corporate strategy
- #crash-test metrics
- Government regulations, like the 1994 side-impact car crash rule, significantly reduce fatalities (44% drop).
- Firms responded differently to the regulation based on a single crash-test dummy metric, leading to varied safety outcomes.
- Some companies narrowly met the regulation, benefiting only the dummy's body type (5'8", 170 lbs), while others exceeded it, protecting a wider range of body types.
- Companies with strong safety commitments and testing capabilities delivered broad protection, reducing fatalities by 54% for all body types.
- Firms lacking safety focus and testing resources only protected the dummy's body type (63% reduction) with no significant improvement for others.
- Safety-focused firms used advanced materials, avoiding weight penalties (39 lbs) and fuel efficiency losses (1 mpg) seen in less innovative firms.
- Regulatory metrics influence firm behavior; some view them as minimum requirements, others as end goals, based on corporate strategy and capabilities.
- Regulators should design metrics considering firm diversity, offering multiple metrics or support to enhance broad protection.