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Toyota The Accelerator Crisis

Toyota:The Accelerator Crisis

Toyota:The Accelerator Crisis

Between2009 and 2010, Toyota conducted a mass recall of its vehicles due tocomplaints of faulty accelerators, which created a safety risk forthe users. The newly elected company president and grandson ofToyota’s founder, Akio Toyoda, accepted liability for the defectson behalf of the company. Fundamentally, possible alternatives torecalling the faulty vehicles would have been denying responsibilityaltogether and adjusting the company’s policy instead of recallingthe vehicles however, these options would not have been as effectiveas the recall.

Denial

Apossible alternative that Toyota could have taken instead ofrecalling its vehicles and admitting incompetence would have beendenying the vehicle defects and blaming users for the defects. Afterall, the company had done just that in 1999 when as many as 3.3million of Toyota automobiles, specifically Camrys and Corollas,experienced severe oil gelling or sludging. Essentially, the sludgingwas so serious that it clogged the internal oil passages of theengines, causing the vehicles to stop running altogether, and theonly way to fix the issue was replacing the entire engine, whichwould have cost more than $8,000. To shield itself from the negativepublicity and avoid losses, Toyota denied liability, refused to coverrepairs, and turned down warranty claims, stating that the errorswere caused by user errors such as the failure to change the oil in atimely fashion and using the wrong brand of oil among others.

Nevertheless,denying liability and refusing warranty claims would not have been asuitable alternative compared to recalling the defective models. Thisis because doing so would cause the company to lose face with itscustomers, and today’s strong media and internet presence wouldhave made the issue very controversial for the company. Besides,despite denying responsibility for oil gelling in 1999, in 2007,Toyota ended up reimbursing 7.5 million customers for incidentalexpenses and repairs dating back as far as 1999 this was aftermultiple lawsuits and internet forums that had become widespread onthe internet. At that time internet use was not widely spread yet theplatform was effective yet it was effective at forcing Toyota tosettle with complaining customers. If that was the case, the internetwould be more effective at shaming the company now that the entireworld has embraced the use of the technology. In this regard, denyingliability, though a tempting alternative, would not have been moresuitable than recalling the faulty vehicles and admitting failure onthe company’s part.

PolicyAdjustment

Anotheralternative to issuing a recall would be agreeing to partiallyreimburse clients for any repairs done to the faulty vehicles, but aspart of a policy adjustment, not a recall. By doing this, Toyotawould save more money than it would have done by recalling defectivevehicles. In addition, it would have seemingly evaded acceptingfailure on the company’s part, which is worse than admittingfailure due to an economic depression, as was the case with itscompetitors. Nevertheless, by choosing this option, Toyota’smanagement would have created an overall impression that it isirresponsible by refusing to accept its shortcomings.Correspondingly, this would send the message that Toyota does not putcustomers first, causing the clients to move to suppliers thatdemonstrate more concern for their safety than Toyota does. In such amanner, a policy adjustment, though a feasible option, would not havebeen as suitable as recalling the faulty models in as far as ethicsare concerned.

Overall,recalling the faulty vehicles and accepting internal company failurefor the broken accelerators was the wisest and most appropriatecourse of action from the available options. By admitting failure,Toyota demonstrated that it valued its customers’ lives more thanprofits, which in turn expressed its willingness to return to TheToyota Way thatplaced safety and quality before volume. Essentially, the acceleratorproblem was more of an ethical problem than a corporate one hence,by recalling the damaged vehicles, Toyota did what was morallyacceptable and saved face with its customers. Inherently, if thecompany could have denied liability and refused to reimbursecustomers for incidental expenses, accidents, and repairs, it wouldhave shown the society that it is driven by profits instead of TheToyota Way, whichis the reason for the loyalty of its customers. Consequently, thiswould have made it lose customer to competitor companies such asGeneral motors and Ford. However, since Toyota acted responsibly andrecalled the faulty cars, it was able to retain a good number ofcustomers and remain formidable in the automobile industry.