Toyota Corporation: An Analysis of Professional Ethics Issues

This report provides an in-depth analysis of the ethical challenges faced by Toyota Motor Corporation, a multinational automobile manufacturer. The study examines various ethical issues, including the company's recall problems, union-busting practices, employee treatment (such as unfair wages, excessive hours, and unsafe working conditions), and the impact of these issues on the organization's reputation and financial performance. The report highlights the importance of business ethics and corporate social responsibility, detailing how unethical behaviors, such as prioritizing cost-saving over safety and neglecting employee welfare, have adversely affected the company's stakeholders. It further explores the management's response to these problems, including the revision of CSR policies and the introduction of ethical training programs. Finally, the report proposes alternative solutions such as implementing comprehensive ethical and compliance training programs, encouraging employees to report ethical dilemmas, and designating an ombudsman to address ethical concerns, to foster a more ethical and sustainable business environment within Toyota.

Running head: PROFESSIONAL ETHICS
PROFESSIONAL ETHICS
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction......................................................................................................................................2
Ethical situation and its impact on the organization........................................................................2
Managing the situation and solution applied...................................................................................3
Evaluation and proposal of alternative situation.............................................................................4
Conclusion.......................................................................................................................................4
References........................................................................................................................................6

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Introduction
The aim of this study is to analyze on the ethical issue of the Toyota Motor Corporation.
Toyota Motor Corporation also known as Toyota is a multinational automobile manufacturing
company that is headquartered in Japan. This organization has been ranked fifth biggest in the
globe as measured by revenue (Chun et al., 2013). Toyota has been considered as the market
leader in the globe in terms of sales of electric vehicles. In addition, the organizations’ financial
services division mainly offers financing to the dealers as well as their customers for purchasing
Toyota vehicles. This company conducts their business in automotive industry. The nature of
business of Toyota is to design, produce and sale vehicles and related parts in the global market.
Ethical situation and its impact on the organization
Business ethics refers to the form of professional ethics that evaluates ethical principles
as well as ethical issues occurring in the business environment. It ensures required trust level that
exists between the customers and different forms of participants in the market with business. In
addition, the economic globalization increases pressure on the business ethics. The Toyota’s
recall problem reflects that the business ethics has been ubiquitous and this impacts on the
development as well as prosperity of the organization (Crane & Matten, 2016). This company
has been well known for Union busting, which led to destruction of small nations in the globe. It
highlights on the decrease in standard of living of the citizens of country. There are more than
instances of the Toyota’s manufacturing plant in US where the employees are often fired or often
disappear from compensation pay roll. Recent study reflects that the employees working in few
manufacturing plants of Toyota suicides due to their unethical behavior (Durkheim, 2013). Even
this organization builds their manufacturing plants in poor nations for taking advantage of the

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nations’ low wage. In fact, many of their laborers of this company have been kept on temporary
job for few years and hence increases number of recalls. Some of the employees of this company
have complained about their dissatisfaction of their wages. Some recent cases highlights that few
workers have been abused with unpaid overtime. Furthermore, the passport of the international
workers has also been stripped off by the management of Toyota and forced them in working for
more than 16 hours each day. Moreover, the wages paid to them is also less than the legal
minimum wages (Ulrich & Sarasin, 2012). However, the company’s ethical issues ranging from
work fairness, justice and harassment to foreign investors affects this organization as well as the
employees involved in it. The business activities were adversely affected owing to these ethical
problems (Hartman, DesJardins & MacDonald, 2014). In addition, it also adversely affected the
relationship between the employees and other stakeholders. The total productivity also reduces
and this decreases the company’s profit margin. Besides excessive hours of working, stiff
patterns of work and unfair wages are also the main ethical problems that Toyota must focus in
solving it. Few employees of Toyota left the job due to their ethical problems and hence it
lowered their standard of living. Recent statistics also reflects that ethical problems also led to
production and quality issues in Toyota. As a result, it caused several car accidents in the nation
leading to death rate. This in turn affected the company’s brand value and reputation.
Managing the situation and solution applied
The management of Toyota had admitted that they purposely abandoned safety concern
as well as deferred recall investigation for saving money. In order to manage the production
issues of car, the management of the company had recruited high level bureaucrats in order to
facilitate the company in managing their relationship with the federal oversight agency (Swanson
& Frederick, 2016). In addition, the management of this organization revised their CSR

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(corporate social responsibility) policies and introduced “customer’s first” policy for satisfying
them and attaining their trust (Trevino & Nelson, 2016). They also improved their employees
working condition and implemented unique philosophy as well as practices of manufacturing
products. As a result, the quality of products as well as services improved due to adoption of
these policies. The management of this company also provided ethical training session to the
employees in order to maintain good business environment.
Evaluation and proposal of alternative situation
The proposal of alternative solution by which the ethical problems in Toyota company can be
handled is explained in the steps given below:
 The company should adopt ethical as well as compliance training programs. This
initiative will reflect the fact that the workers of this organization should cultivate as well
as adhere to ethical workplace code (Weiss, 2014).
 The employees must discuss their ethical dilemma with the company’s supervisor in
order to resolve their problem and also help them in taking the right decision.
 The management of Toyota must develop a plan of action that has been steady with
ethical priorities and justifies their ethical plan.
 They should also implement this action plan and utilize appropriate skills as well as
competencies.
 An ombudsman must be designated for handling informal concerns of workers pertaining
to the ethics in workplace.

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Conclusion
From the above report, it can be concluded that business ethics is vital for every
organization as it helps in enhancing productivity as well as teamwork among the employees.
Ethical conduct in organization encourages the culture of decision-making in the business. It also
improves accountability as well as transparency in business activities. In addition, ethical
behavior of the company facilitates in building strong reputation and attains trust of the
customers. Although the unethical behavior in Toyota adversely affected their reputation,
implementation of new ethical program as well as policies helped them in resolving the issues
and attaining brand value.

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References
Chun, J. S., Shin, Y., Choi, J. N., & Kim, M. S. (2013). How does corporate ethics contribute to
firm financial performance? The mediating role of collective organizational commitment
and organizational citizenship behavior. Journal of Management, 39(4), 853-877
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Durkheim, E. (2013). Professional ethics and civic morals. Routledge
Hartman, L. P., DesJardins, J. R., & MacDonald, C. (2014). Business ethics: Decision making
for personal integrity and social responsibility. New York: McGraw-Hill.
Swanson, D. L., & Frederick, W. C. (2016). Denial and leadership in business ethics
education. Business ethics: New challenges for business schools and corporate leaders,
222-240.
Trevino, L. K., & Nelson, K. A. (2016). Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
Ulrich, P., & Sarasin, C. (Eds.). (2012). Facing public interest: The ethical challenge to business
policy and corporate communications (Vol. 8). Springer Science & Business Media.
Weiss, J. W. (2014). Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.