MBA6026_Unit 5_Assignment 1_Rachel_Rich.docx

MBA6026_Unit 5_Assignment 1_Rachel_Rich.docx - Ethics and...

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Ethics and Corporate Scandal 1 Ethics and Corporate Scandals Rachel Rich Capella University MBA 6026 Unit 5 Assignment 1 March 25, 2018
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Ethics and Corporate Scandal 2 Ethics and Corporate Scandal Ethics are a set of moral principles that define our actions based on what society has deemed right or wrong. In business company ethics are based on the leader’s standards of integrity, honor, and fairness, and are communicated to both the employees and customers through the leader’s words and actions. Ethics are the guiding principles of daily operations and set the tone for all decisions made in the organization. External factors around the globe such as financial, social, economic, and environmental issues pertaining to the success of the organization can lead an organization off track, and the fallout can be costly. This study will analyze Toyota’s ethics in regards to the recall scandal involving sudden acceleration and how Toyota responded to the situation or should have responded. Toyota History Toyota is headquartered in the Aichi Prefecture Province in Japan and was founded August 28, 1937 by Kiichiro Toyoda [Toy18]. Toyota became a true success story in automotive manufacturing with its growth reflecting on Japan’s recovery after World War II [Toy181]. Today, Toyota employs more than 364,445 employees worldwide and in 2016 was ranked as the fifth largest company in the world[Toy18]. Toyota is now the world’s largest automaker[Sch17] with 2017 sales generating $247.66 billion in revenue and $16.43 billion in earnings [NYS181]. Toyota Scandal The Toyota scandal started with a single horrific car crash in Southern California August 28, 2009 when four family members were killed after their 2009 Lexus ES350 suddenly accelerated out of control hitting another vehicle going down an embankment and catching fire [Eva10]. The vehicle was estimated to hit speeds in excess of 100 mph during its sudden acceleration, and initial reports showed that the vehicle was on loan from a dealership because
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Ethics and Corporate Scandal 3 their personal Lexus was being serviced[Eva10]. The initial reports listed the floor mats were the cause of the acceleration because it was reported that the loaned vehicle had the wrong floor mats installed which interfered with the gas pedal causing the vehicle to suddenly accelerate [Eva10]. Within three weeks of the accident Toyota recalled floor mats on 4.2 million Toyota
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