Business Ethics – Toyota Recall

In my first week of COMM101- Responsible Commerce I thought that responsible commerce involved making decisions that are fair for all parties, decisions are to be considered socially acceptable and that all players have equal access to information. I believed socially irresponsible commerce could lead to large-scale problems such as the Global Financial Crisis, In my opinion the GFC is the largest scale manifestation of socially irresponsible commerce and demonstrates the consequences when responsible commerce procedures are not followed.

I still somewhat believe in what my initial thoughts were, in that responsible commerce entails making decisions that are considered socially acceptable, what I did not think of at the time however, is how complex and difficult it is to make those decisions. I’ve since learnt that it is not as easy as it sounds to make socially acceptable decisions.

When we first started I thought it was simple, you look at the options and decide which was best for the majority, a very Utilitarian view. However I have since realized a lot more thought and decision-making has to go into that process. When we looked at the Levi Straus Case Study in which they shut down one of the manufacturing plants in America forcing hundreds of employees out of work, my view on responsible commerce shifted.

When I first read the overview of the case I was very anti-Levi as they left so many employees without work however after re-reading the case and analyzing it further my view shifted. I find the main point in Responsible Commerce is people do not know the full story and make judgments based on the filtered information they receive, making it extremely difficult for companies to be perceived as operating responsibly. Although laying off workers and moving operations off shore is seen as ‘wrong’ by society, what society forgets is that the business needs to earn money and will do their best to ensure that. If the roles were reversed I am sure many individuals would have done the same thing.

Additionally the case that furthered my view of responsible commerce was the case involving the possible incursion of private profit seeking firms into public schools. Businesses are giving schools educational material with their logo and brand awareness all over it, for example, Domino’s learn to count, where the student counts the number of pepperoni slices on the pizza. There was great discussion in my tutorial over thiscase as some saw it irresponsible as they are forcing product awareness on children. Businesses have it tough in terms of trying to please society, as much as they want to be seen to be doing the right thing, too often information is restricted or twisted in turn reflecting poorly on the business. In my tutorial we have also discussed companies who donate such as Bill Gates, he gives hundreds of thousands to those less off than he, yet he doesn’t brag about it, other companies who broadcast their charity giving to ensure all others know.

As a tutorial class we decided the company that doesn’t brag is more often than not the one who is more socially responsible. I’ve since come to realize, it is not as easy as it seems to make socially acceptable decisions. There has to be time spent weighing up all the options and discussing in great detail the possible ramifications of actions. My view on Responsible Commerce as a whole has not changed as much as I have learnt more about what it means.

UtilitarianismUtilitarianism approaches the issue of our social relations from the perspective of the group of the whole of society (Shaw Barry Sansbury, 2012). Utilitarian’s believe it is a moral principle that people should act in such a way that produces the greatest possible balance of good over evil for all those affected by their actions. By ‘good’, Utilitarian’s propose pleasure or happiness. Utilitarianism promotes the ‘greatest happiness of all’; this constitutes the standard that verifies whether an action is right or wrong. Jeremy Bentham and John Mill were the first to develop the theory of Utilitarianism explicitly and in detail, although it was present in the writings of many early thinkers.

Both Bentham and Mill used Utilitarianism to evaluate and criticize political and social institutions of their day such as the prison system. Although they both believed in Utilitarianism their beliefs were slightly different, Bentham viewed a community as no more than the individuals that composed it and the interests of the community are simply the sum of the interests of its members (Shaw Barry Sansbury, 2012).

Bentham also held the view that an action promotes an individual when it adds to the individual’s pleasure or diminishes the person’s pain (Shaw Barry Sansbury, 2012, p64). Bentham argued that for the Utilitarianism principle in that actions are right if they promote the greatest human welfare, and are wrong if they do not. However, Mill supposed Bentham’s theory was too guileless.

Mill believed human beings have evaluated faculties that allow them to pursue various higher kinds of pleasure; he considered that the pleasures of intellect and imagination have a higher value than those of physical sensation. Consequently, for Mill the Utility principle allows contemplation of the relative quality pain and pleasure, not just their intensity and duration. Although Bentham and Mill had different perceptions of pleasure, both likened pleasure and happiness and believed pleasure the ultimate value. I have learnt there are two main types of Utilitarianism, ‘act utilitarianism’ as per information above and ‘rule utilitarianism’.

Utilitarianism in its most basic form is ‘act utilitarianism’ it essentially declares that we must ask ourselves what the consequences of a particular act in a particular situation will be for those affected. If its consequences bring more total good than those of any alternative course of action, then this action is the right one and one we should perform. We learnt about Utilitarianism fairly early on in the course, I already had a basic idea about it from Business Studies in High School.

Since learning more about Utilitarianism I’ve come to the conclusion that I somewhat agree with this theory, I believe that whilst it is important to think about the long run and how consequences of actions will play out, it is equally important to ensure suffering and pain in the short term is minimal. Although as much as we think we can tell what the outcome of a decision will be essentially we do not know until it happens, therefore if we base a decision using the utility principle we are hoping the result will be the one we had foreseen. I agree that it is important for the overall happiness to be the most important factor but I disagree with the fact that it brings unhappiness to others and that the ‘majority rules’ regime comes into play.

If I were to describe Utilitarianism in laymen’s terms I would describe it through an example, if an action produces ten units of happiness and four units of unhappiness (so for every ten people happy with the outcome, there are four unhappy), its net worth is six units of happiness. Suppose also that the second option also produces ten units of happiness but also eight units of unhappiness, it’s net worth being two units of happiness. Therefore using a the utility principle we should choose the first option as it brings about the most happiness.

Toyota RecallIn 2010 Toyota Motor Corp recalled 2.3 million vehicles in the U.S to fix accelerator problems. The recall was due to the cars gas pedals sticking open, potentially causing unintentional acceleration. (Krisher, 2010) Of the 2.3 million vehicles being recalled, 1.7 million also are affected by the floor-mat recall. In response Toyota replaced accelerator pedals, replacing floor mats, modifying carpeting and installing throttle-override software (Strumph, 2010)

The reason I chose to do the Toyota recall is because we own a Toyota and I can remember talking to Dad about it and him explaining to me in great detail what was happening mechanically. The main reason however was that I decided to do some further research of my own as I found it interesting.

As I was researching I stumbled across a newspaper article from America, the article was about the final moments of a family’s life as a passenger, Chris, made a frantic 911 call as his friend Saylor tried to stop their out of control car (Bensinger, 2010) The full story was that an off-duty Highway Patrol Officer Mark Saylor, his wife Cleofe Lastrella, their daughter, Mahala and Cleofe’s brother Chris were driving along a suburban San Diego highway when the gas pedal of their 2009 Lexus ES 350 stuck, causing it to speed out of control.

Their final moments were captured as Chris made a frantic 911 call describing Saylor’s futile efforts to stop the car, which crashed through an embankment and burned. It was because of that incident I decided to use the Toyota recall as my Case Study; I already had a rough idea about it and felt emotionally attached to it, even though I didn’t know the people who were killed. My Grandfather was in a serous car crash many years ago due to the other cars breaks failing; it left him with serious brain defects, eventually killing him.

The accident rendered him incapable of being able to continue Wood Turning, a hobby he had been doing for over 45 years. I saw him struggle every day to do simple things he once did with ease. But the most heart-breaking thing was seeing his Shed, once so full of life and love covered in cobwebs and dust. It was exasperating for him not to be able to turn wood, the crash changed not only his life dramatically, but my whole families, I believe this is the reason I feel so strongly and passionately about the Toyota recall.

The fact that a young family was killed due to technical difficulties pulls my heartstrings. My heart goes out to the individuals who were involved and the families who were left to pick up the pieces. Too often people are injured or killed in motor vehicle accidents, and although the faulty gas pedals was not intentional it still caused many problems for society as a whole. After the incident

Toyota promptly and voluntarily recalled over three million cars to fix the problem. One Toyota owner, Jack Waldron, said, “the whole thing has been dealt with so promptly, along with the impressive response time from our local dealer” Toyota Recall Facts, 2010. I believe that Toyota acted in a socially responsible way they could have ignored the complaints and incidents and instead blamed it on those few cars being faulty but instead they made a huge effort and recalled 3.2 million cars to fix the problem to ensure no more deaths occurred. It made me think of responsible commerce due to the way Toyota handled the complaints and problems that arose from the faulty gas pedals.

Toyota will continue to investigate incidents of unwanted acceleration and take appropriate action to address any trends that are identified”, the company said (Linebaugh, 2010). I believe Toyota followed the Utility Principle in that although it would have been easier for them to dismiss the claims and continue on without damaging their image, they decided it was for the better of society that they recall the cars and fix them, ensuring the happiness and safety of their customers, although it would have been time consuming and very costly for Toyota.

References.Strumph, D, 2010, ‘Toyota recalls cars to fix gas pedals’, Tulsa World, 22 January. Bensinger, K, 2010, ‘Toyota recalls vehicles for sticking gas pedals’, Chicago Tribune, 22 January Krisher, T, 2010, ‘Toyota expands recall over faulty gas pedals’, South Florida Sun – Sentinial, 29 January. Linebaugh, K, ‘Corporate News: Toyota issues second recall for gas pedal’, Wall Street Journal, 22 January. Toyota Recall Facts, 2010, accessed 26th April 2012, http://www.toyota.com.au/about/toyota-recall