LEADERSHIP CONCEPTS: TOYOTAS ETHICAL DILEMMA - Research Paper Example

? Leadership Concepts: Toyota’s Ethical Dilemma of the of Introduction Toyota Motors has been charged of producing faulty car parts that has resulted in acceleration problems in few of its models. The faults were so serious that it had even caused a few death cases. The consequences reflected a widespread product and company defamation. Moreover, the company had to undertake a total recall for its faulty models. This paper aims to highlight problems faced by Toyota by laying out the entire causal scenario of total recall. It analyses the ethical problems associated with the issue and the company at large. The paper also investigates into other unethical practices prevalent within the company. Based on the findings, the paper has tried to recommend a detailed plan of action for Toyota in order to rebuild its tarnished image through leadership strategies, thereby establishing a socially responsible corporate image. Company Toyota Motor Corporation is a Japanese auto manufacturing company chaired by Takeshi Uchiyamada. It is one of the largest automaker in the world employing about 334000 people globally. In terms of revenue, Toyota is the eleventh largest corporation worldwide. The company was founded in 1927 and deals with the manufacturing and production of commercial vehicles, automobiles, engines and motorcycles (Toyota, 2013a). Apart from global leadership in vehicle manufacturing, the company is known for its participation in ecological campaigns and sustainable environment issues. The company believes in both theory and practice of sustainable development. Toyota practices total quality management in all of its operations. The objectives aim to create the least impact on the environment. For creating a sustainable environment, the company has established a plantation program (Toyota, 2013e). Apart from this, the company is involved in many ecological campaigns and environmental management programs. The organization has been awarded with various awards such as, Green Awards (Toyota, 2013d). Toyota Vision and Mission Vision statement for Toyota Inc. states that the company will act as a future of mobility and enrich lives globally with safety and responsibility. They commit themselves to innovation, quality maintenance, environment protection and also, to reward with a smile. Within the organization, the company aims to set goals for itself that are challenging and plans to achieve them by engaging passion and talent of its employees. Toyota Ethics Code Ethics and quality are the standard for the sustainability of the company as well as development and growth of the supply chain along with other critical departments of Toyota (Toyota, 2013b). The overall ethics of Toyota can be summed up as follows (Toyota, 2013c): Abiding by the standards, laws and regulations. Protection and respect of human rights. Emphasizing on workplace safety and high-quality health with the intention of minimizing accidents as well as workplace protection. The overall organization expects minimum conflict between the organizational and personal interests. Taking care of the firm’s properties and engaging with the best interests of the organization. Keeping an open and direct communication with the society as well as external environment, so that an apt retort can be produced in case of any critical feedback. Organizational challenge faced by Toyota Toyota has been known for its high quality mechanics. The engineering, designing and models created by the brand are incomparable and envied by its competitors. However, the company has been facing major organizational challenges in the recent past. These can be categorized as ethical challenges. Between early 2009 and 2010, the company had suffered three separate recalls of their different motor vehicle models. The issues on which recalls were made were all regarding unintended functioning of acceleration. It is described as unintended, uncontrolled and unexpected acceleration of a motor vehicle. This situation is worsened by sudden and unsuccessful break system. Sudden acceleration may occur due to mechanical or electrical problems or driving errors. It can also be caused as a result of a combination of the above problems. In the initial period, the company had explained the root cause of acceleration to be the faulty and improper floor mat and break paddles which were installed from another motor vehicle. However, when similar and continuous recalls had started, experts concluded that the actual problem was with the strategy as well as designing of the vehicles. Critics argued that this defective and unmanaged strategy was the real cause for these automobiles to be unfit and unsafe for emergencies. Taking history in account, it can also be observed that the issue of sudden acceleration had also occurred before. During the year 1987, the company recalled 5000 Audi models from the market as a result of brake issues and problem of sudden acceleration. Another problem was reported in the Honda model in 1988. Also, from 2004 to 2006, numerous issues of unintended and sudden acceleration were recognized in various Toyota brands like, Toyota Camry, Ford Explorer and Ford Mustang. As a result of these various recalls, the company was forced to suspend the production and sales of many well-known and renowned models, which had included some big brands like, Toyota Corolla. Analysts have also found out that the organization had purposely been avoiding the investigation of these malfunctioning and defective systems in the motor vehicles, which had led to the production of faulty automobile parts (Andrews, Simon, Tian & Zhao, 2011). Another challenge which the company had faced was in terms of unethical behavior in factories and manufacturing plants (Dietz & Gillespie, 2012). The operations inside these factories were termed as slavery and human trafficking and most of the workers were burdened with overtime, which made them sick and even had led many to death. Media and analysts have declared that the company had deliberately chosen states which were relatively poorer. The objective was to take advantage of those workers by paying them lower wages. The manufacturing plants and facilities of Toyota are another example of unethical behavior which is followed by the company. The factory operations have been termed as human trafficking and slavery and thousands of workers are overloaded with work, thereby making them sick and even causing their demise in the process. Analysts and media have claimed that the organization had deliberately chosen the poorer states in order to take advantage of the workers by paying them the lowest wages. Even though the company is one of the most profitable organizations worldwide, yet the wage system is one of the lowest in the automobile industry. Solutions to organizational challenges To solve the problems in Toyota, the organization had generated a three stage strategy. These were primarily about observing the symptoms and problems, understanding the context of present business and identification of the root cause. This model was known as A3 model and was created by the Toyota Company. The model was later used to frame the quality management and production system of the company (Svensson & Wood, 2005). A centralized decision making process can be very slow in case of crucial decisions. The major drawback of this system is that all the decision is taken by the top management. Thus, several issues get neglected or handled improperly. In case of Toyota, even though the regional office was aware of the acceleration issue, it could not do anything in response as the issue had not reached to the head office then. To resolve this issue, the company can become more responsive. Instead of the headquarters handling all the issues, some decision making authority should be given to the regional offices, thereby enabling them to investigate and take immediate decisions in cases of emergency. Apart from this, a strategy for group decision making should be implemented where valuable feedbacks from the field workers and front line managers can be used. Recommended Solution With a view to improvise its tarnished image among its various stakeholders, Toyota has started to rebuild its social values. Toyota had also been accused of inefficiency and lack of commitment, as the recalls were not exactly a proper measure to combat the acceleration issue and this had put a major pressure on Toyota’s premium prices which were initially tagged on reputation. The company had tried to grow too big in too little time. This had weakened a robust growth situation and had also shaken their inbuilt values and systems. There is an urgent need to protect the company from downgrading of trust and procedures of ethics. To begin with, Toyota should make it public that quality improvement shall be its organizational strategy and the key focus of its management. To establish itself as a company with a social responsibility, the management should devise a corporate policy wherein they would state regaining customer trust as a collective motive. Such an act by the company will have a dual affect of bringing the employees back to focus along with informing the customers about its intended ethical behavior. There is a need to restructure the organization in a large scale. The company has to go about establishing product lines and quality check measures within its manufacturing line. It also needs to streamline its emission norm requirements and environment friendly automotives and production systems (Tropea-Gray et al., 2010). The families of the victims of the faulty acceleration of Toyota cars need to be compensated and apologized to. The leaders of the organization need to take proper and appropriate corporate responsibility measures to address these families. In order to avoid reticence and an image of reluctance, the company has to take proactive measures that shall involve a series of investigations, brainstorming and planning for development of suitable action plans in order to address dangerous and faulty makes. To build on its brand image, a strong corporate social responsibility plan has to be charted out. Proper actions and huge campaigns for the benefit of society can assist the company in regaining some of the lost trust. Toyota as a company has been inflicted with numerous accusations regarding its employee policy and working environment. Accusations made over human trafficking, work environment and employee treatment along with their wage rates is not only serious, but also seriously damages the company’s reputation and image. Being one of the most successful auto manufacturers, the company has to end such ill treatments towards its employees in order to enhance the company’s organizational value (Piotrowski, 2010). Major steps that need to be undertaken by Toyota for handling employee ill treatment include: 1. Wage conditions in the company are sub-standard and needs to be immediately improved, so that it is set at par with industry standards. 2. Toyota is accused of inappropriate and exceptionally long work hours. This has a serious impact on employees’ physical and mental health, apart from his work life balance situation. The organization has to chart out proper working schedules where the time slots for each employee are fixed. If more work needs to be done, then hiring activity should be undertaken, instead of rewarding the existing staff for overtime. 3. Employees work in hazardous conditions at their workplace in Toyota. The company should take active measures whereby adherence to strict working condition norms would be mandatory. Employee health is at a risk due to high temperature and pressure situations. In a car manufacturing company, a proper medical support unit should be in place for addressing critical situations. 4. Human trafficking is a serious crime. The company has to establish a special task force that is designated towards the task of spotting such crime scene within the organization and helping in eliminating the same. Also, employees need to undergo a special training program wherein they are taught how to handle such situations, if they happen to be a part of one. In the present situation, the company has to work on a complete reorganization of its social values and organizational reformation (Sakurai, 2011). Conclusion Toyota’s problems are many but the solutions require focusing on ethical management. It becomes the duty of leadership to establish such mechanism which would clean the tarnished image of the company. It would be helpful if the company was more transparent about its quality standards and processes. Management could invite customer opinions and views on such quality aspects as well as their efforts in order to keep abreast of the problems with the cars. Also, employees are the key to organizational sustenance. Improper management of staff invites only defamation. The company has to incur certain costs regarding both employees and quality in order to sustain and remain profitable in the long run (Michael, 2006). References Andrews, A.P., Simon, J., Tian, F. & Zhao, J. (2011). The Toyota crisis: An economic, operational and strategic analysis of the massive recall. Management Research Review, 34(10), 1064 – 1077. Dietz, G. & Gillespie, N. (2012). The Recovery of trust: Case studies of organizational failure and trust repairs. Retrieved from http://www.ibe.org.uk/userfiles/op_trustcasestudies.pdf Michael, M. L. (2006). Business Ethics: the law of rules. Retrieved from http://www.hks.harvard.edu/m-rcbg/CSRI/publications/workingpaper_19_michael.pdf Piotrowski, C. (2010). Toyota Recall Crisis: Attitudes on Leadership and Ethics. Retrieved from http://www.jiu.ac.jp/books/bulletin/2010/info/sakurai.pdf http://law-journals-books.vlex.com/vid/toyota-recall-crisis-attitudes-ethics-211027411 Sakurai, M. (2011). Impact of Toyota Recall on Corporate Reputation. Retrieved from http://www.jiu.ac.jp/books/bulletin/2010/info/sakurai.pdf Svensson, G. & Wood, G. (2005). Business ethics in TQM: The qualities and spectrum zones of a case illustration. The TQM Magazine, 17(1), 19 – 34. Toyota. (2013a). Company Profile. Retrieved from http://www.toyota.co.th/en/about.php?page=detail2 Toyota. (2013b). Toyota business ethics. Retrieved from http://www.toyota.co.th/en/about.php?page=conduct Toyota. (2013c). Policies and management. Retrieved from http://www.toyota.co.th/en/about.php?page=policy Toyota. (2013d). Awards. Retrieved from http://www.toyota.co.th/halloffame/ Toyota. (2013e). Social responsibility. Retrieved from http://www.toyota.co.th/en/about.php?page=policy Tropea-Gray, A. P., Lee, M., Ross, D. & Tan, W. L. (2010) Lessons from Toyota Crisis: Do Students Perceive Ethical Dilemma?. Retrieved from http://cjbe.org/resources/297.pdf Read More