Introduction
This presentation is on Toyota Motor Corporation. This automotive company is Japanese in origin with its headquarters Aichi, Japan. Toyota over a period of time has been facing some ethical problems that seem to be weighing it down. The company is owned by Kiirichi Toyoda, who is the innovator and inventor of the company. The company was established in the year of 1973 following the emergence and merging of the various Toyota Industries owned by his father. Most of the ethical issues experienced by the company, both the local and international outlets have affected the company progress either positively and negatively .
Ethical problems
Like any other fortune company, the Toyota enterprise has experienced various ethical problems within the various company premises. For instance, in various company outlets in the United States region fell victim to the ethical issues regarding the quality and safety of the Toyota vehicles. This instigated a series of concerns within the public domain to the extent it got the attention of the congress due to the subsequent client lawsuits. The underlying ethical problems affecting the company subsequently affect the company’s stakeholders and shareholders’ interests, since equally; these issues affected the company’s profit margins. For example, the negative customer feedback or recalling of Toyota products due to faultiness resulted in budgetary losses .
These ethics provides possible guidelines in either written or unwritten form of values and principles governing the decisions making and operations processes of companies. Ethical issues range from easy and practically defined issues that encompass a company's responsibility and duty to be honest as it associates with its customers. It also calls for companies to be responsive by documenting problems that arises from its products and to the broader issues in regards to the protection of the environment in general. Highly visible sets of ethical issues largely influence the attitude of the public to the company and may also lead to the destruction of trust. Ethics also does not just encompass the isolated personal issues, but also the policies and the informal communications that are capable of delivering responsible conduct embedded in any organization (Fraedrich and Linda, 2013).
The issue of recalling
Between 2009 and 2010, Toyota was reported to have recalled cars averagely over 8 million worldwide. The issues being, problems in regards to the mechanical performance of the vehicles such as gas pedal accelerator issues in several of its models and brake pedal issues and in particular, with respect to the hybrid Prius 2010 version. Also, they recalled a voluntary safety recalling of 8,000 Tacomas also 2012 versions to inspect on the issues regarding the front drive shaft.
A Tacomas 2012 version
Toyota Prius 2012 version
They seem to have lacked ethical decision making which also made their consumers to lose confidence over in their products. It is essential and requisite for any business in this current world era to follow the laws of business operations while meeting the customer expectations of the services and goods offered by the company. In this case scenario failed to meet certain consumer expectations given it had to recall various vehicles because of their brake pedal faultiness.
Unintended Acceleration of the Toyota Models
Conferring to a previous reading, the Toyota Company was faced with a problem regarding mechanical quality of some of their cars, since they were noted to have some acceleration problems. The company was reluctant to rectify this impending issue at first, not until the U.S. Congress intervened to compel the company to take the respective corrective action in solving their production shortcomings. This happened after the company’s failure to address the various customer complaints regarding the corporation’s cars. In this case scenario, Toyota had to resolve the pegging problem by reducing the accelerator pedal length in the recalled vehicles and replacing the ones for the vehicles that were still in production.
Toyota for some time seemed to be morally blind to the overlying problem with the issue of unintended acceleration as reported in the US and Europe. Initially, the head management claimed and argued some of the faulty accidents were as a result of driver error and then tried to reclaim their customers' trust by serving self-serving statements. The company offered this gesture to all the continents it had its branches and operates in. This included the regions in the United States, in Europe, Asia and also parts of the African continent.
Toyota Placed Profit before its Customer Safety
The company placed the objectives to accrue profit while neglecting their customers’ safety in the production of the vehicle products. These issues were addressed during the congress discussion regarding the future of the Toyota Company. This topic was also noted by a member of the oversight and reform committee Edolphus Towns. Additionally, the issue was echoed by Mr. Toyoda himself, who stated that the overlying issues may have been as a result of the company expanding too quickly and in losing its sight of the core values governing it. This issue was felt globally .
Neglect Corporate Social Responsibility
Corporate Social Responsibility (CSR) refers to a unit of business being concerned with the society’s welfare. It is essential for the company to treat the firm’s stakeholder’s interest in an ethical way, by for example ensuring the CSR is positively practiced and achieved each and every time. It mostly regarded by managers as a long-range avenue of maintaining a harmonious relationship with the surrounding society. It comprises of 3 concepts, that includes Corporate Social Responsibility (CSR1), Corporate Social Rectitude (CSR3) and Corporate Social Responsiveness (CSR2) (Dawkins and Ngujuri, July 2008). In 2008, the Toyota beat General Motors in profit making and consumer preference as it was ranked as the top world’s biggest automotive builders. Globally, Toyota introduced a stream of relentless cost control and also reduced its concern to observe quality. Toyoda even identified that in the past, Toyota was committed to economic benefits, expanding business scale, elevating market share and costs lowering. And in that process it gave up on the priorities to product safety. It is then evident that Toyota indeed diverted from its traditional Corporate Social Responsibility (CSR) that it was initially proud of.
Recommendations for the automotive company
Notably, businesses also have a duty to prevent the destruction or tarnishing the shareholder value, since their interests for the company are very important. Profits and gains in the company economics forms a fundamental section of making business decisions since these are the essential components that are of great interest to company shareholders and stakeholders. Additionally, maintaining a positive Company image is also very important. A few recommendations are as follows;
Restoring the situation and re-establishing of their Image and Credibility
Although it will call for greater expenditure on recall, there issue is unavoidable and the corporation may be frustrated. On the brighter side, recall will allow its consumers to experience Toyota’s faith and sincerity. This is the ethical obligation that enabled the Toyota Company win more loyal customers. Given the viewpoint and long-term objectives of the Company, one would agree that the company is still beneficial and adaptable to consumer needs and expectations in all its operational markets. Advisably, the Toyota Company needs to make sincere responses to its consumers, so that their impeding issues do not accumulate into a very big problem like the ones discussed previously.
Revise its Vulnerabilities
The business ethics of a company need to be revised and reviewed over time to ensure it is in line with the company’s objective. It is the responsibility of the company administration to ensure that the all rules and guidelines for all the company operations are followed by employees. Communication and information passing within the organization is vital in achieving a clear sense of awareness and transparency in approval of all the production processes by management. It is worth noting the Toyota Corporation problems were caused by the company’s failure to meet customer expectations for their various international clienteles. This can be blamed on the poor communication between the different tiers in the management which successively amounted to the subsequently faults in the firms production.
Works Cited
Bassam, S. (2013, April 9). Toyota's Ethical Issue (Project). Retrieved from Prezi: http://prezi.com/gdwhvptq6v4f/toyotas-ethical-issue-project/
Cedric Dawkins, F. W. (July 2008). Corporate Social Responsibility Reporting in South Africa. International Journal of Business Communication vol. 45 no. 3 , 286-307 .
Ferrell. John Fraedrich, L. F. (2013). Business Ethics: Ethical Decision Making and Cases(9th edition). South-Western Mason USA: Cengage Learning.
Keane, A. G. (2010, February 24). Toyota Put Profit Before Customer Safety, Towns Says (Update1). Retrieved from Bloomber: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a3g5dmb3K8V4
Mintz, S. (2013, May 1). Toyota Resolves Some of its Legal Problems. Retrieved from Workplace Ethics Advice: http://www.workplaceethicsadvice.com/2013/01/toyota-resolves-some-of-its-legal-problems.html
Weinstock, B. S. (2010, February 22). Toyota: Business Decisions Based on Economics, the Law and Ethics. Retrieved from Danna McKitrick, P.C.: http://www.dannamckitrick.com/beyond-the-fine-print/2010/02/toyota-business-decisions-based-on-economics-the-law-and-ethics/
