Abstract
Toyota has been the fifth largest producer of automobiles in the world by means of its unit sales, however, the over-emphasis of the company on the quantity has overlooked the quality of its vehicles. The increasing number of accidents incorporated by the vehicles of Toyota and numerous lawsuits against Toyota due to its quality issues resulting in the occurrence of accidents has questioned the integrity of the organization towards the safety concerns. In this manner, the ethical concerns prevail because the quality defects in its vehicles implies the life threatening situations for its customers. The company has faced large number of recalls due to which the cost of the company is increased in order to address the quality issues. Moreover, it has deteriorated the image of the company and the sales of the company have been decreased. However, the company has changed its emphasis towards the quality improvement and has developed the customer service department to determine the issues that customers are facing in order to address them in an effective manner. The company is focused on improving its quality but is facing the financial constraint to address these issues in an effective manner. The lack of communication between car dealers, technicians and management prevails due to which the technicians do not know the faults that customers face while driving their vehicles. Therefore, it is recommended that the company initiates the effective communication system in order to ensure the adequate chain of command and integration so that the issues related to quality and customer inclinations can be determined. The company is also required to incorporate the six sigma in its production procedures so that its objective of cost efficiency and quality improvement can be achieved. The company is also recommended to enhance its brand image among its customers by communicating its inclination towards quality improvement.
Keywords: Toyota, Recalls, Ethical Concerns, Quality, Six Sigma, Organizational Effectiveness.
Introduction
1.1 Background
Toyota Motor Corp. is the largest manufacturer of the automobiles in the world but the company is facing numerous lawsuits due to the prevalence of the accidents related to the unintended acceleration, which eventually questions its quality. The quality issues have resulted in the increased number of recall in order to satisfy its customers, which eventually has increased the cost of the company. However, the current officials of the company are blaming the previous management due to the fact that their focus was concentrated on increasing the quantity or sales of the company, rather than improving the quality of its vehicles.
1.2 Main Idea
The prior over-emphasis on the company’s sales rather than quality has resulted in the quality defects which also has hindered the sales of Toyota. The company is currently focused on enhancing its quality in order to satisfy its customers and avoid recalls. Previously, the company has failed to determine the engineering defects due to which the company has to face the higher extent of recall.
1.3 Key Points about the Organization
Toyota Inc. is the largest automobile manufacturer in the world and is best known for its low-cost and quality vehicles. Since the last decade, the company has been focused on enhancing its sales rather than focusing on quality improvement due to which the quality concerns related to its vehicles has been increased. The company is best known for its economies of scale due to which the company enjoys high profit yield at low cost, however, the increasing number of recalls and required improvements in the engineering and assembly-line mistakes, the cost of production is increased.
1.4 Key Points about the Situation
The company faced a large number of recalls in the year 2010 because the company accepted the vehicles that were not considered problematic, but the company did this in order to satisfy its customers. It resulted in slow response of the technical teams to the customers and hence, the company’s reputation for customer care was deteriorated. The U.S National Highway Traffic Board has indicated that the accidents that are conducted by the vehicles that are manufactured by Toyota are due to the misapplication of pedals. In this way, the quality and design concerns have been increased and has flattened the sales of the company.
1.5 Ethical Issues
The ethical issues that account for Toyota Inc. incorporate the Health and Safety Concerns that the company has overlooked due to its extreme focus on sales than quality improvement. The inadequate design, incorporating the pedal misapplication, comprehends the life threatening risk for its customers and is considered as a major ethical issue. Toyota, being the largest automobile company, has ignored the safety concerns, which were considered as the primary focus of the automobile companies so that the prevalence of accidents due to the vehicle’s quality can be eradicated and indicate company’s responsibility towards its customers and society.
Method
2.1 SWOT Analysis
2.1.1 Strengths
The company has the technical employees and expertise to redesign its vehicles that assure the maximum level of safety to its customers.
2.1.2 Weaknesses
The deteriorating image of the company due to large number of recalls has reduced its sales.
The company lacks the ability to capitalize in order to enhance its quality due to its deteriorating financial standing.
2.1.3 Opportunities
The company can avail large number of sales with its upcoming Camry model and the company can enhance the features of this model to make its sustainable.
The company has increased its customer support services by employing 20 employees to enhance the customer service and acquire repair reports.
2.1.4 Threats
Hyundai Motor and Detroit have launched the compact sedans that can reduce the sales of Camry and Corolla.
2.2 Cause and Effect of the Problem
The company’s prior focus on quantity has incorporated less emphasis on the quality due to which the company has failed to keep pace with the quality improvement. The lack of adequate chain of command resulted in the failure of reporting the possible design issues and threats identified by the dealers and mechanics. The engineers of the company were not innovative enough to predict the possible design enhancements in order to avoid their hazardous results. Therefore, the identification of the large number of Toyota vehicles involved in accidents due to quality concerns has effected the image and sales of the company in a negative manner. Moreover, the customers have become unsatisfied with the quality of vehicles and customer service which has threatened the leading position of Toyota in the world.
2.3 Evolution of Problem
The problem has been evolved over the period of time because the company over-emphasized the increase in its sales and neglected the quality improvements. The company also failed to utilize the skills of their engineers by adhering their focus towards maintain the quality that has been promised by the company to its customers. In this manner, the company failed to address the customer’s concerns of health and safety and lost its marketing standing by means of sales and customer satisfaction.
2.4 Course Concepts and Situation
The current situation encompasses the prevalence of the ethical issues in the organization in which the company has neglected the health and safety concerns that it is supposed to address in an effective manner to reduce the number of accidents caused by its manufactured vehicles. The course concepts enlighten the ethical responsibility of the companies in which the businesses are responsible to ensure the wellbeing of the customers and society in accordance with their products. Toyota in this instance, has failed to address the ethical concerns by means of safety concerns due to its deteriorated quality.
2.5 Addressing Ethical Issues
The ethical issues are required to be addressed by incorporating the Six Sigma in its manufacturing procedure because six sigma comprehends the total quality management phenomenon and hence, ensures the quality improvement and increase in profits. The adherence of Toyota towards the implementation of six sigma can reduce the quality issues in its vehicles by 99.99 percent and can help in the reduction of production time, cost efficiency, high profits, reduced waste and increased customer satisfaction (Zu et al., 2008).
In this respect, Toru Sakuragi has that "Toyota has been caught between a need to improve quality to prevent recalls," and "they are now pursuing both strategies, but they are essentially at odds with one another." In accordance with the six sigma procedure, the strategy is realistic because, the company needs to modify its production procedure by implementing six sigma and can enhance its quality and at low cost. However, the strategy can be improved if the company take initiatives to motivate its technicians and engineers to focus on the design of its vehicles in such manner that it can avoid the problems that drivers may face while using their vehicles. In this manner, the company needs to make its employees proactive in order to sustain its market standing rather than focusing on the large number of production units (Zu et al., 2008).
Discussion
3.1 Solution of the Problem
The company needs to enhance the quality of its vehicles in order to sustain its market standing, increase its sales and satisfy its customers. In this manner, the company is required to implement the six sigma process in its manufacturing procedure so that the company can enhance the quality of its vehicles in a systematic manner. The company is required to motivate its employees and technicians to focus on quality so that the possible faults can be determined effectively and can be addressed rather than incorporating safety concerns for its customers (Zu et al., 2008).
3.2 Recommendations
The company is required to incorporate the following suggestions:
The company is required to analyze the defects that are found in its vehicles and should determine the stage of production in which the quality is compromised. In this way, the company can enhance its quality (Zu et al., 2008).
The company needs to incorporate training and motivation workshops in order to make its engineers proactive and innovative (Eppinger & Chitkara, 2006).
The company needs to enhance communication with its dealers, technicians and managerial staff to ensure the integration between the departments and customer complaints / requirements (Eppinger & Chitkara, 2006).
The company needs to enhance its brand image and should initiate the marketing campaigns that demonstrate the safety concerns being addressed by its vehicles to increase its sales (Fetscherin & Toncar, 2010).
3.3 Rationale for Suggestions
The provided suggestions are rationalized on the following basis:
The identification of the production stage in which defaults prevail will help in the eradication of these faults by enhancing the extent of quality check in such stage (Zu et al., 2008).
Training will enhance the skills of engineers and they will become innovative in identifying and predicting the problems that their customers may face while driving their vehicles. Their proactive and creative skills will ensure the cost efficiency in the design and hence, the vehicles will be produced at the low cost (Eppinger & Chitkara, 2006).
The enhanced communication will provide the company with the ability to identify the defects and quality concerns in an efficient manner (Eppinger & Chitkara, 2006).
The marketing campaigns will help the company to communicate its adherence towards customers’ safety and will increase its deteriorated brand image due to large number of recalls (Fetscherin & Toncar, 2010).
3.4 Recommendations and Organizational Effectiveness
The implementation of these recommendations can make the employees more inclined towards the quality enhancement of the vehicles and increase the customers’ perception towards the vehicles. In this manner, the sales of the company can be increased and the company can sustain its profitability and market standing. Therefore, the work processes will become effective due to which the organizational effectiveness can be achieved.
3.5 Ethical Issues and Recommendation
The ethical issues are related to the safety concerns due to defects in the vehicles and the provided recommendations can make the employees adhered towards quality improvement and proactive to address the quality issues by means of redesigning the features of vehicles in an effective manner. The ethical issues can be mitigated due to the adherence of the organization towards the quality improvement due to which quality and safe vehicles can be produced at low cost (Summers, 2005).
4. Toyota’s Initiatives
References
Eppinger, S. D., & Chitkara, A. R. (2006). The new practice of global product development. MIT Sloan Management Review, 47(4), 22.
Fetscherin, M., & Toncar, M. (2010). The effects of the country of brand and the country of manufacturing of automobiles: An experimental study of consumers' brand personality perceptions. International Marketing Review,27(2), 164-178.
Summers, D. C. (2005). Quality management: Creating and sustaining organizational effectiveness. Pearson Prentice Hall.
Zu, X., Fredendall, L. D., & Douglas, T. J. (2008). The evolving theory of quality management: the role of Six Sigma. Journal of operations Management, 26(5), 630-650.
