Through observation Toyota’s decisions where more of reactive. The company provides solutions and warnings to customers only after complaints are made. Though there was an effort to notify customers with regards to the dangers of the floor mats, Toyota communicated the wrong information to clients.
The basis of each decision made were complaints of customers or family member which became victims of Toyota’s manufacturing defects. Though the company claims there is nothing wrong with their systems, it is quite confusing why they would recall car models even if they claim that everything was in good condition.
Toyota only makes decisions after accidents happen and complaints and suits are filed against the company. This is only the time when the management team examines and makes decisions with regards to taking actions.
The consequences of Toyota’s decisions have given the company a bad reputation which led to the lost of millions of dollars. If Toyota opted to make examine the safety of their cars, conducted studies and surveys before suits are filed and paid attention to complaints by customers they could have saved much public embarrassment and court time. The decisions made by the Toyota management were always late.
True the company was reactive in nature but lives were already lost and it was reported that there were hundreds if not thousands of complaints made because of the problem in terms of the break.
The company did not take action then. Complaints were ignored and the company kept telling its dealers that problems were minor. When suites were filed already, that’s the only time Toyota took action by announcing to recall specific models which are suspected to have problems. In this way the company already lost money and its brand was already tarnished.
In terms of the bounded rational model, Toyota’s actions acknowledges and confirms that the management team of the company has been considering environmental and behavioral constraints in their decision making. Since Toyota is a Japanese based company operating in the United States (where most complaints are made), Toyota failed to implement strategies that go in line with the western culture.
Where the Japanese business scene is considered reactive to problems, western business culture expects a more proactive approach in handling complaints and problems. Asian and western behaviors must also be considered for customers in the US are far different than those in Asian countries.
American and European customers complain over the slightest detail in every commodity they buy because they want to get the best of what they have paid for as compared to customers in Asia who are submissive in nature. Decisions and actions made by Toyota were based on the awareness of such limitations.
According to the bound rational model, humans divide or factor problems into small pieces and deal with them one by one due to the complexity of real life. This can be seen on how the management team dealt with Toyota’s faulty car systems and accessories. At first Toyota warned its customers about the faulty floor mats which disrupt drivers when the car accelerates and becomes out of control.
The breaks may not have any good use during such time thus accidents may occur. Then Toyota’s system engine was the culprit for accidents thus the management team slowly focused on such claim and tried to make decisions to resolve such issue. Lastly the faulty pedals due to manufacturing defects were pointed out as the source of the problem; again the management team discussed and analyzed such claim.
Problems were solely evaluated one by one proving that decision makers of Toyota indeed factor or divide problems and deal with them one by one. Another characteristic of Toyota’s decision makers is they settle for what is good enough thus problems occur consistently because they do not think through the alternatives and other consequences.
When complete information cannot be obtained, human decision makers seek a course of action that is good enough rather than maximizing utility. When complaints were made about the faulty floor mats Toyota could have taken action not limited to the issue of the floor mats but could have also checked other parts of the cars which may have caused accidents.
The management team only focused on solving the floor mat problem and did not look through beyond such thus problems arose continually. Alternatives can be generated sequentially but the search was aborted once the first good enough alternative was identified.
The management team of Toyota also avoided uncertainty thus they would always provide short term feedback which sought to enable change with any emerging outcomes. As observed with the management team’s pattern of decision making the team only addressed problems which are already publicly declared. When problems are still small they do not seem to pay much attention to them.
In relation to all of Toyota’s stakeholders featured in the case study, Toyota acted unethically with great caution that is why actions were always delayed. From a relativism point of view where what is right is determined by the culture, Toyota may have had a hard time adjusting to the western culture and needs as the CEO was still of Asian descent who is used to the ways of the Asian world.
The customers in the west expected that actions be taken right away and as the Toyota management team slowly made decisions and came up with solutions, the management team limited themselves with that is within the given scope and did not expand because of the fear of uncertainty.
In the relativism point of view the moral and ethical choice is determined when the social group to which one belongs approves of the decisions made. In this case Toyota was waiting for the approval of the western culture before it implemented their actions. At the same time the egoist theory also applies to the said situation. This theory is often seen as the core to business where executives act from prudence.
It represents the choice of expending which promotes self over any other. Toyota wanted to gain more profit and market share thus their decisions were delayed as they wish to get away with manufacturing defects and make sales thus resulting to lives lost and many injured.
This theory explains human conduct thus the goal is to gain more whether the gain would mean lost to the other party but empirical evidence supports that there would be occasions of non-egoistical behaviors. This can be seen in Toyota’s action to comply with court judges as to the recall and improvement of their cars.
Also Toyota issued apology letters to families and paid compensations for damages. Though such conduct is self-serving because Toyota is motivated by self-interest and they benefit in the long run by winning over a new set of customers or retaining the old affected ones.