The Toyota Company is founded in the year of 1937 in Aichi, Japan and began as a automotive producer company named as Toyota Motor Corporation. The headquarters of Toyota is located in Aichi, Tokyo and Nagoya respectively. For the recent years, the Toyota company is a public listed company which has successful replaced the world largest automotive group GM and became the leading innovative automobile company. The Toyota Company is operating at worldwide factory and its product range including automobile, engines of commercial vehicle and motorcycle. (Toyota Motor Corporation, 2011)
Furthermore, the Toyota company also operating with its parent company Toyota Group and two divisions of Lexus and Scion Company. The company also employing a total of 325,905 people serving it's worldwide business structure including 522 facilities in Toyota group and its possessed subsidiaries. It is obviously the main competitor of the Toyota Company among the market share is including the few famous automotive producers including, Nissan Motor Company and Honda.(Toyota Motor Corporation, 2011)
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Business Ethics definition
The concept of Business Ethics is a study of moral standards that utilize to business institutions and behaviors. Ethics, explained as the discipline to investigate the moral standard for individual or society. In a business environment, the principles and problems of ethics will be arising and examines in business ethics. Business ethics, which is, applied ethics that can be known as a study that specialized on the moral right or wrong that emphasize on organization, business institution and activities. Also, it is a study to determine the moral standard that applies on organization and social system, and the activities of people that work in the organization. (Manuel G. Velasquez, 2012)
Business Ethics is a behavior for a business insists on its daily dealing. It can be summarized as the value of integrity, fairness and honesty, which includes the issues of environmental scanning and stakeholders. Companies do not commit crimes but people do, it because when a company acts wrongly, there must be some individuals chose to do in that company. (Sheri Cyprus, 2003)
2.0 Identification of Dilemmas
Dilemma can be interpreted as circumstances on a difficult decision or situation that the company requires to make often in two or more possibilities either can be acceptable or unacceptable. Sometimes, the organization must accept the two or more unpleasant and undesirable alternatives of dilemma, which claims in each leading to conclusion. (Manuel G. Velasquez, 2012)
2.1.1 Toyota Recall Issue on Sudden Acceleration Problems
Toyota Company recently involve in a lawsuit of product liability and wrongful death about the problems of gas pedal on Toyota vehicles. It caused of a large recall with more than 5 million vehicles, sporty utility vehicles and pick up truck. This recall issue happens after the owners of vehicles complained about their own vehicles included Lexus which under their subsidiaries brand of Toyota about the sudden out of control on the accelerator and results in a serious fatal accident. (Jamie, 2010)
The serious fatal accident happens on August of 2009 in California, which a family of three were killed when driving the Lexus ES 350. Before fatal crash happens, the passenger reports to police about the out of control on accelerator with a high speed. (Brody, 2010) Thus, Toyota and Lexus was recall more than 3.8 million of vehicles that suspect on the certain floor mats could stuck under gas pedals of the vehicles. This recall was reported in New York Times, it mention that before issue the recall of vehicles, Toyota actually knew about the problem of acceleration for over two and a half years. However, the National Highway Traffic Safety Administration (NHTSA) have a different view which they argue and suspect that there will be some issue besides of floor mats which is the pedal and speed control system for the vehicle. (Jamie, 2010)
2.1.2 Stakeholder Analysis of Toyota Recall Issue
Customer ï¼Œ because of this recall issue, the consumer starts to question the company and it affect on their customer satisfaction and customer value on the vehicles and the company reputation, especially when the other automobile offer better choices and better quality in rating, such as Honda and Nissan. Furthermore, most of the owner were experienced the same problem on the inconvenience of bringing their vehicle to the dealer. It also affect on the majority of owner that need to make an advanced appointment with dealer because of the high recall. Another effect that some consumer are concern about is the resale value and reliability of the vehicle. (Raissa Carey, 2010)
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Shareholders, about of the recall issue about sudden accelerator problem, which influenced the shareholder wealth. For example, the Toyota shareholders are heading in a lawsuit with the sudden drop on the stock price and the company tends to deliberately mislead their investors and publics. The Toyota investors claims the Toyota company provides wrong initial assurances which it is just a simple matter of trapping gas pedals, floor mats and helping prop up for the stock price. When the recall had been announced, the stock price drop 16% in the early of March with $79.34 in New York Stock Exchange, it shows that the shareholder and investor are losing million of dollars. Also, the market capitalization was drop 15% to the price of $135.87 billion in U.S. Also, Toyota Company lost at least 17% of market share. (The Association Press, 2010)
Employee, the dilemma of recall and sudden accelerator problems has generated an impact on employees. For example, Toyota Company announces that there will be lost around 750 positions for employee due to this dilemma. The United Auto Workers from the company had conducted an attack, and a protectionist campaign had announced that the defective vehicles from Toyota Company might cause danger to America. This campaign was last about two days, which protest outside of the Japanese embassy in Washington. (Brody, 2010)
2.2 Human Trafficking and Sweatshop Abuse
In 2008, the National Labor Committee which known as NLC had released a 65-page report named The Toyota You Don't Know stated that the serious issue of human trafficking and sweatshop abuse by Toyota Company. (Brian Potter, 2008)
This issue criticizes on the Japanese automaker hire low wage temps to establish the popularity of Toyota Prius. Toyota company is much applying the concept of 'Just In Time' of auto parts in supply chain which riddled with the issue of sweatshop abuse, such as the human trafficking of foreign workers which mostly come from China and Vietnam, the company stripped away their passports and forced to work. For examples, those foreign workers have to work minimum 16 hours per day, seven days per week, but the company is paying half less than the legal minimum wage which state by the group. (Brian Potter, 2008) In addition, some of these foreign workers were overworked to death, and the company did not even pay for the overtime they are dying for.
2.2.1 Stakeholder Analysis of Human Trafficking and Sweatshop Abuse
Employee, the dilemma of human trafficking and sweatshop abuse that happen on Toyota Company will impact the employee of company. For example, the workers complain that the abusive by paying he low rates of pay and overworked up to 16 hours per day. Also, it consists of low on stats on their organization's report and the anecdotes on focusing Toyota Prius celebs. (Robert Farago, 2008) Besides that, the production of Prius is made by low wage of temps which they earn less compared to full time workers around 60% of the pay. In addition, the company did not pay for overtime to the employee and overworked to death which happens on Mr.Kenichi Uchino was died because of overwork at Toyota Prius Plant.
Customer, nowadays, the consumer not only concerns on the vehicle that they bought, they also will concern on the company reputation and how they treat their employee. When the dilemma of human trafficking and sweatshop abuse happens, it influenced the customer satisfaction and the demand of customer to purchase the vehicles because it will decrease the trust of customer for the company and impact the reputation of company.
Government, adjust the working condition and carry out the regulation such as workplace and environmental regulations. Because of this dilemma happens, the government have attempt to strictness of enforcement on the regulation. The government is giving the pressure to the Toyota company on taking the responsibility to ensure compliances for the labour policies which includes the contribution of minimum wages for employee to avoid the same dilemma will be happens again.
3.0 Evaluation of Ethical Dilemmas
An ethical dilemma can be known as a moral dilemma. There is a circumstance wherein the ethical obligation or moral perception that conflict in a way of any resolution to dilemma in moral is intolerable. It says in the other words, an ethical dilemma is to guiding the moral principles in any circumstance, which cannot determine the course of action whether is right or wrong. (Lee Flamand, 2010)
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So, an ethical dilemma is meets in violation of moral standard. A moral standard is to deal with the issue that can benefit or injure human beings. It lies on the sufficient of the reason to make a decision on support and justify. The preferred of moral standard is self-interest and it based on impartially consideration which help to make objective decisions in a common understanding of acceptable or unacceptable behavior. (Manuel G. Velasquez, 2012)
Therefore, the Toyota company dilemma meets the moral standard by using the standard of Rights and Duties with a moral judgement.
3.0.1 Rights and Duties Theory
When comes to the concept of right, it is an entitlement to do something by individual. An individual own a right when the individual have the right to act in some way or have the right to have others deed in some way toward the individual. (Manuel G. Velasquez, 2012)
In the concepts of rights, it consists of two categories, which are legal right and human rights. Legal right explained as the entitlement that derive by legal system to empowers or permits an individual to act in a certain way or claim others to act in a specified ways towards the individual. Besides that, human rights also known as moral rights which the entitlement that derive in independent moral standard from the particular legal system. (Manuel G. Velasquez, 2012)
Moral rights or human rights is different compare to legal right, which every human being owns to have an equal extent simply from the morality of human being. For examples, everyone have a right to get education and government has the duty to provide institution, schools and university. The individuals are enabling to seek the certain activities or interest with certain requirement. Therefore, the rights establish duties of others to an individual. (Manuel G. Velasquez, 2012)
Furthermore, moral duties also known as moral judgement which explained as people has positive rights or must be done that are enticed to avoid doing. For example, consumer to company and child to parents. In the other hand, the negative rights or the duties must not be done by justify individual's action and invoking the protection. Also, moral duties are an equality and autonomy that provided by individual in the pursuit of interest. (Manuel G. Velasquez, 2012)
When comes to contractual rights and duties, it explained as when a person involve in an agreement with another party which need some requirement including full knowledge, no intentionally misrepresent, no duress and coercion and no immoral act. Both parties that involved in an agreement or contract must have the full knowledge on the agreement that the parties are entering, which mean the individuals have the rights to understand the content of contract that the individuals need to be signed. Besides that, the party must no intention on misrepresent on the contract which the providing the wrong information before the contract is signed by the party. Also, duress or coercion means the party forcing second party to signed and enters to the contract. In addition, the contract that consists of illegal or immoral content, the individual have the rights to void and null the contract when this can be prove by an evidence, thus, this contract will not bind the individual that involve on it. (Manuel G. Velasquez, 2012)
3.1 Toyota Recall Issue on Sudden Acceleration Problems, Rights and Duties
Toyota Company has the rights to ensure the parts of the vehicles are in a safety condition and to ensure the quality that produced is in good condition to avoid the issue of sudden acceleration problems which the company has break the moral rights. Besides that, Toyota has a duty to provide a safety product for the public or consumer and they have a duty to ensure and protect their customer safety.
Unfortunately, Toyota Company did not implement the rights and duties. For example, due to the uncontrollable of accelerator pedal, it caused a serious fatal accident that killed a whole family of three members. Besides that, Toyota company break the rights and duties about the company actually knew this problem of accelerator for more than two and a half year, which they are trying to hide this issue from the publics and they did not take action on this issue until the fatal accident was happened. (Jamie, 2010)
The moral judgement for Toyota Company about recall issue and sudden acceleration problems can be judge as unethical by researcher, because the company have break the moral rights and duties which they do not empowers peoples to do something and do not entitled peoples to do something that done for them. The company consist of negative rights by invoke the protection for others under moral duties.
3.2 Toyota Human Trafficking and Sweatshop Abuse, Rights and Duties
Toyota Company does not owned rights and duties under the issue of human trafficking and sweatshop abuse. In moral rights is for the company to provide a good benefits for workers and have a duties to take care on their workers. But Toyota Company is very concern on the concept of 'just in time' in their company, so they had break the moral standard of rights and duties. The company hired foreign worker and stripped away their passports and forced them to work over 16 hours per day. Besides that, the company pays half of the standard legal minimum wages for the foreign workers, this cause some of the worker death under overworked and the company did not pay for overtime to their worker. It is illegal under the labor law and had broken the legal right. As a result, the Toyota Company having human trafficking and sweatshop to its workers which already break the rights and duties of moral standard. (Brian Potter, 2008)
Thus, the dilemma of Toyota Company's human trafficking and sweatshop abuse is unethical. Researcher judge Toyota as unethical because Toyota didn't concern on the human rights for their workers and hire foreign worker with low pay to minimize the company cost, and they had break the moral rights and duties.
4.0 Best Practice of Toyota Company
Besides than the unethical part of Toyota Company which is the recall issue and sudden acceleration problem, and human trafficking and sweatshop abuse. The Toyota Company also have contribute best practice to the society which is running environmental program of eco schools and conduct the recovery support as volunteer in the Japan Earthquake.
4.1 Environmental program of eco-school
Toyota Company has introduced an environmental program of Eco School since 1994 that establish by the Foundation Environment Education (FEE). This program is to let the students to take part on determine subject, do research and plan to action with their school teacher and parents also include in the participation at school. It is recommend by the United Nation Environment Programme (UNEP) as a sustainable development of environmental education in the global model. In year 2010, Toyota and six schools have involved in the programme of 'let's save energy'. This project is to make the energy consumption become visible with the smart code and highly commend and rated by international award ceremony. (Toyota Motor Corporation, 2011)
This results in the ethical sides of Toyota Company with a moral standard of Justice and Fairness and focus on distribution justice. Distribution justice can be defined as giving a fair distribution to the society's benefits and burdens. This practices shows on the company that focus on the environment issues and knowledge to the student. The company is providing this program for the student or youth and get to know more about the environmental issue that are happening currently, such as global warming. (Toyota Motor Corporation, 2011)
4.2 Recovery Support as Volunteer in Japan Earthquake
There are 15 of Toyota Group companies were involve in the activities of recovery support in the disaster that happens in Japan, This result on the company ethical side that under Justice and Fairness, which the company focus on the distributive justice. The reason is Toyota Company is giving a fully supportive to their employee to take volunteer by helping those victims from disaster happened. It is to help the victims by recover to their normal life in a shorter time. Besides that, it can improve the employee responsibility and gain more knowledge by helping someone. (Toyota Motor Corporation, 2011)
which is Japan Earthquake. They help the victim to return and recover to their normal life as fast as possible. There are around 200 of employee are volunteer to worked on this projects to fulfill the local needs and wants, for example, the volunteer help to remove and clean off the wreckage and rubble, also, they removed the mud from the roadside drainage and houses. The employees of Toyota have accepted 14 of volunteer assignments and each of the assignment consists of 15 people for five days between the month of June and November 2011. Furthermore, Toyota Company has developed a volunteer training for those who willing to help the recovery of disaster and victims. (Toyota Motor Corporation, 2011)