Toyota Social Performance

IntroductionSince its establishment, Toyota has been dedicated to be a company with great social responsibilities, adhering to the direction of “safety, environmental protection and education” to make contribution to the society. It enhance enterprise values with love and dedication, and furthermore, the concept has been rooted into the marketing system, promoting the three-step strategy of “first manufacturers, distributors following up, and customer participating” for community projects of Toyota.

In terms of education, Toyota sets up a lot of libraries which aimed at upgrading the quality of children in poor areas, what is more, it donated books, sporting materials and student funding to the students in rural areas. Besides, Toyota donated money and vehicles to the Hope Project when the Wenchuan earthquake occurred in China.

Moreover, Toyota’s environmental projects are also an important part of public commonweal projects, by carrying out a lot of tree planting activities, sponsoring the environmental photography competition and so on. In terms of security, Toyota engages in a large number of traffic safety education activities to enhance traffic safety education of children and promote family happiness and social harmony. However, apart from the bright sides, Toyota also has space for improvement in social responsibility (McWilliams 2001). The “brake” incident on Toyota results in consumers losing confidence in Toyota’s vehicle, which is a lack of trust, also, a great blow to Toyota.

This essay firstly discusses the social performance of Toyota, including charity and education. Following this, it will examine of how the company has impacted upon its stakeholders especially after the “brake” incident. Finally, it will look at the company’s actions on its stakeholders. Toyota making contribution to charity and environmental protection The standard of measuring a good company is not only the good products and the sales figures, but also the corporate social responsibility as the business development objectives into account. On May 10, the library completed sponsored by Toyota, which is just a start, signing the official beginning of community projects.

Toyota has been doing the unrelated things without stop, such as education and environmental protection in different places. Toyota did not choose to spend the money on product promotion and sponsor any sports events that attract more eyeballs. On the other side, Toyota chooses to do charity to make some contribution to the society.

Toyota declares that corporate social responsibility is not only to provide consumers with quality goods and services, but also to create a good living environment for staff and to promote the educational development and furthermore, changing the backward situation of poverty-stricken areas and then promoting harmonious development of society as a whole(Vogel 2005). From the general perspective of a company, Toyota is definitely a good business.

Not laying off the employees in crisis: Toyota highlighting “social interest” concept In 2009, Toyota will achieve the “three extensions”, which are expanding production capacity, extending product lines and expanding channels, ensuring that Toyota will not lay off workers and furthermore promote employment (McWilliams 2000). The establishment of the second production line of Toyota Motor, the new models getting into production and sales network expansion will promote the development of logistics, finance and other related industries, bringing more employment opportunities for the whole community. For enterprises, the talent pool is as important as investment.

In the current economic crisis, many companies only saw a decline of business, and pay not enough attention to personnel training. As a “people oriented” enterprise, Toyota has attached great importance to personnel training. Executives of Toyota believe that a high level and adequate talent pool is necessary for branding building. Therefore, Toyota sets up special skills training field, requiring all personnel to pass the strict training before the official certificates and send technical and managerial staffs to Japan, America and other places for training in order to speed up the talent incubation. In terms of training sales and after-sales staffs, Toyota attaches equal importance (Hill 2007).

In addition, Toyota carried out projects together with other automobile companies in order to cultivate talents for the country. Toyota’s efforts in training personnel not only enhance their own competitiveness, but also promote employment and maintain social stability, which has played a significant role. Toyota persists not laying off employees in the crisis, which highlights “social interests”. Toyota has taken effective practical action to make contribution to the society.

“Brake” incident having negative impact on Toyota

A lot of consumer of Camry has complaints to the AQSIQ. AQSIQ Defective Product Management Centre had a survey of 200 randomly selected Camry owners; it is found that the problem mainly focused on brake failure, hardening, catching and abnormal noise and so on. More than 15% of consumers are in risky conditions and traffic accidents. According to preliminary feasibility studies, experts found the Toyota Camry sedan brake problem is mainly because the ruptured film by vacuum booster pumps.

Throughout this event, it is found that Toyota is negative to the whole event. Toyota’s technical departments initially found the hidden problems, which are discovered by the complaints of consumers and distributors on the cars. Therefore, the company widely adopted technology improvement and changed the design of the parts in order to eliminate hidden dangers.

The improvement was put into operation from March 3, 2008, when Toyota claims that there was no problem. However, the 260,000 cars haven’t been retrieved with effective measures (Porter 2006). It is easy to see the contradiction between technological improvements and hidden facts, on one hand, it makes technological improvements because of the risks, on the other hand, it disregards the lives of Chinese consumers until this year when it is reported to the State Administration of Quality Supervision on Toyota Camry sedan vacuum booster issues, thus avoiding the sensitive words “large-scale recall”.

But in the report, the market service activity which lasts 6 months only enables car owners to replace the vacuum booster for free in the period. If the owners haven’t found the problems in the 6 months, they would have to replace them by their own. Since everyone drives in different ways, thus the time when the problems are found will be different. It is rather difficult to find the problems in 6 months, which is a serious information asymmetry.

The “brake” incident is a manifestation of corporate responsibility, is related to a corporate social responsibility, which is related to social responsibility. And the responsibility to consumers and the society is essential for a company to be evergreen. It can be said that Toyota is quite irresponsible on this matter.

U.S. shareholders prosecuting Toyota on the assets devalue Toyota is currently facing numerous lawsuits; including U.S. shareholders suing Toyota on the stock devalue by misleading investors and the public.

It was reported that U.S. court has received at least three lawsuits from the investors. Litigation claims that Toyota attempts to hold a press conference and a television interview and other ways to make the public convinced that the a conference call with stock analysts, a, etc. so that the public convinced that the problem of sudden acceleration of vehicles is easy to be repaired, thereby misleading shareholders and the public(Thompson 2008).

They also claim that Toyota knows the automotive brake system failure may lead to system failure, however, Toyota cover this problem and did not retrieve the broken cars for protecting corporate reputation and supporting stock price. Last year in October, when Toyota recalls a lot of cars when the “mat” incident occurred, the stock price fell sharply 75 dollars. Otherwise, Toyota has long insisted that the problem is easy to handle, in January this year, its stock price briefly rose to more than 90 U.S. dollars, at the same time, the stock price of Toyota in the U.S. capital market dropped 13%, only 135.87 billion U.S. dollars at present.

Toyota’s action on the “brake” incident to rebuild consumer confidence On 24th June, CEO of Toyota bowed deeply to express their apologies to the shareholders, for the large-scale auto recalls bringing troubles. The auto giant suffered “pedal” incident, “mat” incident, “brake” incident and a series of storms that exposed a lot of quality defects since October last year, it recalled more than eight million vehicle styles worldwide(Holt 2004).

Toyota suffered significant losses on the issues, and now it is facing more than 200 lawsuits of fines of millions of dollars by the U.S. government and huge maintenance costs. Some analysts believed that the biggest blow suffered by Toyota is the loss of previously good image of quality paramount. The president of Toyota faced the shareholders and gave his explanation about the issues in last October. The CEO gave his thanks to the shareholders for their support and bow to apologize; he claimed that the company was trying their best to improve the enterprise quality control mechanisms. He thought the most important thing at present is to rebuild consumer confidence. Conclusion

Toyota has always been doing well on social performance, it persist making contributions to the society, including charity and environmental protection. However, when the issue of “brake” incident occurred, Toyota faced great challenges of rebuilding consumer’s confidence. The president of Toyota gave his apologies to the shareholders as reaction on this issue, Toyota is doing its best to rebuild brand image. References:

McWilliams, A. Siegel, D. 2001. Corporate social responsibility: A theory of the firm perspective. Academy of management review Vogel, D. 2005. The market for virtue: The potential and limits of corporate social responsibility. (Accessed 1st September, 2010) McWilliams, A. Siegel, D. 2000. Corporate social responsibility and financial performance: correlation or misspecification? Strategic Management Journal Hill, R.P. Ainscough, T. 2007. Corporate social responsibility and socially responsible investing:

A global perspective. (Accessed 1st September, 2010) Porter, M.E. Kramer,M.R. 2006. Strategy and society. (Accessed 1st September, 2010 ) Thompson, A.A . Strickland,A.J. 2008. Crafting and executing strategy. (Accessed 1st September, 2010 ) Holt, D.B. Quelch,J.A. 2004. How global brands compete. (Accessed 1st September, 2010)