Creating Roadblocks: Secretive Org at Toyota

With all the buzz about Toyota cars, I couldn’t help but think about how something like this could have happened to the world’s largest automaker—an automaker known for its dedication to quality and attention to detail. However, the cause of the problem may not be the important part or even the most interesting. Recalls happen all the time, engineers make mistakes. On a machine with thousands of components and tens of thousands of moving parts, it is reasonable to expect that not everything will be perfect. Rather I think the interesting and possible more problematic tid bit to come out of this fiasco is the corporate culture of the organization–an organization that allowed this incident with faulty accelerators to balloon out of control.

I was reading an article on the Wall Street Journal website today that pointed to the secretive culture of the Toyota corporation as the primary cause behind the public relations nightmare the company is currently facing. According to the WSJ, Toyota knew about a potential problem as far back as 2004. Toyota, however, kept refuting the claims and refused to look further into the issue until more data was available to prove that there were problems with its cars. The decision making process engaged by top Toyota management is still a mystery as Toyota, as an organization, tends to keep to itself and has had a history of clashing with government regulators.

I think two things are going on here. First, I think that Toyota was hoping that it could handle the problem in house and find a fix quietly without going public and taking a public relations hit. Second, I think that their secretive handling of the crisis has further strained relations with the NHSTA and could trigger some serious repercussions. Thoughts?

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7 Responses

  1. This whole situation reminds me of a incident similar to it in the 1970’s with the Ford Pinto. In my Business, Gov’t, and Society class that the “Haertless Capitalist” and I took last semester discussed how Ford had denied and denied that the tanks of the Pinto were dangerous. Dangerous because in minor rear-end accidents the gas tank tended to catch fire and sometimes explode. Ford could have avoided the problem by just making the recall and fixing the problem in the design. It would have been costly, but in hindsight they would have avoided what became a large scandal and eventually a stain on the car manufacturers name.

    Regardless of the reasons that Toyota denied the problem or the seriousness of the issue, this situation is playing out allow the lines of the Ford Pinto incident. At this point there might not be much to salvage the situation, but Toyota should trend carefully in order to protect the company name and reputation.

    • I think they need to enter into damage control mode at this point and I would argue that name and reputation has already been tarnished. Put all this together with the current hard hitting Ford and Chevy commercials and the high initial quality ratings domestic vehicles have been achieving and I think Toyota may have a more serious problem on their hands – something that could affect them in the long term.

  2. This situation parallels strongly with recall event involving the arthritis drug Vioxx produced by the pharmaceutical giant Merck. Similar to Toyota’s recall problem, Merck released an unsafe product on the market and struggled with whether or not to recall the medicine. This situation stems into the world of business ethics. What duty does the supplier have to the customer? How will the view of Toyota cars change after this recall? Remember this is not the first automotive recall, in fact American car companies historically have had more recalls.

    • I agree that it does hit on ethics and clearly in this case Toyota was about saving face. They have never experienced a recall like this and were probably very concerned with the potential fall out. I think they were either hoping that the problem was a fluke/anomaly or that they could quietly develop a fix. This clearly did not happen and they are left scrambling.

  3. It makes sense that Toyota would try to keep the problem behind closed doors. When people hear the word recall, they generally get worried about what may happen to them while driving the car. It gives off a negative connotation to most people. So coming from Toyota’s standpoint, it seems logical to try to keep it a secret from the public, until something goes wrong that is. If they could have gotten through this without the problem of the accelerators surfacing, it would have been genius and they would have saved tons of money. So does it make sense for them (until the point where there were large numbers of cars going through this) to try and conceal the problem?

    • I think for a company that prides itself on quality and has not experienced a recall like this—yes I would almost expect them to try and conceal the mistake. At some level, maybe a certain degree of arrogance factored into the equation—after all, they are Toyota and do not make mistakes!

  4. BRAVO on replies! An excellent way to keep the conversation going!

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