Today's global market has changed the way a company must do business; the old local business plan is no longer feasible. In the old business model did not consider ethics as a major concern. The impact a company now has in the global economy has made it imperative that ethics must be of primary concern. Many issues have come to light with the ethical negligence of Enron which financially destroyed many people and the substandard way British Petroleum has gone about it oil drilling operations. Their willingness to cut corners to speed up drilling and maximize profits has created the world's largest man made natural disaster.
Another example of a company placing profits over ethical issues is Toyota, their substandard manufacturing practices has been the cause of thousands of accidents, injuries and even death in some cases. Their lack of ethical decision making has also cost them consumer confidence in their products. In today's business world it is imperative that a company conduct itself in a transparent manner and make sure that ethics is the guiding principle in its decision making process.
Business ethics for a company is a written set of policies and moral principles which the company is to do business by. These ethics provide guidelines whether written or unwritten in the form of principles and values that govern the operations and decision making processes of the company. Ethical issues can range from practical, easily defined issues such as a company's responsibility to be honest with its customers and to be responsive to documented problems with its products, to more broader issues concerning the protection of our environment, its employees and its customers. These issues must be balanced with the practical needs of the company such as productivity and profits.
Toyota demonstrated their lack of ethical decision making in the recent sticking accelerator problems with their vehicles. In order to maximize profits they continued to use faulty products in their vehicles and avoided installing fail safe features. They continued this course of action even after it was made aware of the problem. Instead of addressing the issue early on, Toyota decided it was best to deny responsibility and increase sales.
This action taken by Toyota resulted in more injuries and deaths for its customers. The company's policy of denial and lying to the public is a great example of what can happen when an organization of any type places profits or personal gains above ethical issues.
To date there have been 2,262 occurrences of unintended acceleration in Toyota vehicles. This has resulted in 815 crashes, 341 cases of injury and 19 deaths. After years of denial and deceiving the public on the severity of the problem Toyota has issued recalls for 2.3 million vehicles in the United States due to the risk that the accelerator pedal may stick. Another 1.8 million vehicles in Europe, Canada are also being recalled. (Krolicki, Feb. 2010). In addition to these recalls Toyota is also recalling another 5 million vehicles in the United States because of the risk of the floor mats impeding the release of the gas pedal. (Krolicki)
To date the Toyota Motor Company is facing over 300 lawsuits in both state and federal courts.(, June 2010) I feel that this is only the beginning, as Toyota continues to deny any type of electronic problems with this issue, the cases of sudden acceleration will increase.
Toyota has been animate that the cause of the sudden acceleration has been solely due to a faulty gas pedal and that it is purely mechanical. Some customers who have their gas pedal modified by Toyota have experienced sudden acceleration incidences. Toyota has not had an answer to this problem except to say that it is not an issue with its electronic systems. Many experts in the industry are starting to theorize that electronics may very well be defective . I am astonished that Toyota refuses to fully investigate this issue.
The only testing regarding the electronics to date was performed by a company hired by Toyota. They did not test any of the vehicles which actually experienced the problem. They only tested the same models.
This case study is riddled with ethical issues. The fact that the company was aware of this problem for years without taking any action demonstrates how they had a policy of profit over safety. I think their state of mind was that it is cheaper to pay off a few lawsuits that to admit that there was a problem and addressing it. This also demonstrates a lack of honesty to the public.
The company only responded to the issue after it was a wide spread news story. This shows me that they will only address an issue when it will cause them to look bad not when it is unethical to sell their customers a dangerous product. I am amazed that even after this incident they continue to de defensive and in denial mode regarding the possibility that it could be an electronical issue as well. It shows me that they have failed to learn a valuable lesson.
- (June 2010). _Toyota Sudden Acceleration Lawsuits Consolidated_. Retrieved 25 June 2010, from www.newsinferno.com
- Krolicki, K. (Feb. 2010). _Toyota Acceleration facts_. Retrieved 25 June 2010, from www.reuters.com