Toyota Ethical Audit

Topics: Toyota, Kiichiro Toyoda, The Toyota Way Pages: 10 (3828 words) Published: April 18, 2011
Toyota Motor Corporation, commonly known as Toyota, is a global corporation headquartered in Japan. At its climax, Toyota employed approximately 320,000 people worldwide. It is the world's largest automobile maker by sales. The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company Toyota Industries to create automobiles. Toyota also owns and operates Lexus and Scion brands and has a majority shareholding stake in Daihatsu and Hino Motors, and minority shareholdings in Fuji Heavy Industries, Isuzu Motors, Yamaha Motors, and Mitsubishi Aircraft Corporation. The company includes 522 subsidiaries. In 2009-2010, the company was heavily in debt and had to request a loan of more than $3 billion from a bank backed by the Japanese government. Its net income was 153 billion yen ($1.68bn; £1.06bn) after a loss of 164 billion yen a year earlier. Toyota confirmed its estimate that it would lose about $2bn (£1.23bn) in costs and lost sales from its worldwide recall of potentially faulty vehicles. The objectives of writing this ethical audit report on Toyota are: I. To identify the ethical dilemmas facing by the company. II. To discuss the evaluation of the relative importance of the dilemmas and how Toyota is currently dealing them. III. Also to explain Toyota ethical best practices and values. IV. And lastly, to give recommendations that will enable Toyota to give appropriate answers to its critics.

An ethical dilemma is a situation where in moral precepts or ethical obligations conflict in such a way that any possible resolution to the dilemma is morally intolerable. In other words, an ethical dilemma is any situation in which guiding moral principles cannot determine which course of action is right or wrong. Below are some of the ethical dilemmas Toyota is facing. 2.1 safety Issues

According to Plantes (2010), “Toyota is manufacturing unsafely cars that lead to failing brakes and uncontrollable self-accelerating gas pedals. At the same time, Toyota was producing new vehicles with known safety flaws and advertising their vehicles to be the safest and highest quality vehicles on the road. (Ejaz, n.d.). But Toyota is accused of putting profit ahead of people, not just people but customers and their safety, the ultimate business sin. It has been described as slow moving, secretive and perceived as trying to cover up problems rather than address them head on. (Refer to Appendix 2 for some pictures of Toyota unsafe cars that lead to accident.) 2.1.1 Failing Brakes Problem

On February 3, 2010, the National Highway Traffic Safety Administration (NHTSA) announced that it had received reports from 102 drivers of possible problems related to the braking system on the MY 2010 Toyota Prius, including four of crashes. Same complaints of over 200 reports was also received by Toyota from drivers in the US and Japan. Three of these reports claimed that brake problems had led to the car crashing, with one accident in July 2009 occurring when a Prius crashed head on into another car injuring two people. This is the latest problem Toyota company is facing. (BBC, 2010). 2.1.2 Uncontrollable Self-Accelerating Gas Pedals Problem:

Gu (2010) said “Toyota and its stock have been hammered over the past year (2009) by reports that thousands of Toyota and Lexus models had crashed due to a combination of sudden, automatic acceleration and unresponsive brakes. But it turns out, according to preliminary testing by the federal (NHTSA), the crashes were probably due to thousands of cases of human error”. To demonstrate the problem of relying on power-assisted brakes in the case of sudden and uncontrollable acceleration, the attorney for Guadalupe Gomez explained the details of his client’s case, “He [Gomez] was held hostage for 20 miles on a Bay Area freeway by a 2007 Camry traveling more than 100 mph. Gomez was unable to turn off the engine or shift into...
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