Business Ethics Case Study Of Toyota Motor Company

Toyota Motor

Introduction

A study of Milton Friedman found out that the main goal of a business is gaining profit and interest to benefit their shareholders (Humber 2002). Today, the role of business is changed from shareholders theory to stakeholder theory by Edward Freeman. Edward Freemen said that businesses have responsibilities toward the stakeholders of company such as philanthropy, ethical, economic and legal. Philanthropic responsibility stated that a company contributes and supports the community through investment (2). For example, Shell is giving $7.5 million for UT student as research the problems which growing worldwide oil and gas industry and support their programs (3). Furthermore, ethical responsibility is the responsibility

Toyota is well known of manufacturing motor vehicles at affordable price to various consumer group, including men or women and utilitarian value or hedonic value. Being one of the world’s largest automaker, Toyota is often under pressure to have high Corporate Social Responsibility (CSR) policy, state that they will operate their business in a social responsible way as the stakeholders of Toyota do not only focus on their profit as they also contribute in taking care of the social. However, Toyota has breached social contract where the scandal of poor braking system led to environmental accident happened and human right issue of the consumer were revealed in the manufacture of Toyota. This essay will examine the social performance of Toyota, during manufacturing Toyota has lack of commitment in provide a good quality of its vehicle and led to environmental accident happened, since Toyota has introduced strategies to protect human rights of consumer, as well as environment conservation to reduce greenhouse

Moreover, Toyota has put a well effort in performing its continuity production which including several areas of the business. Today, consumers are more aware about the environmental impact of product due to global warming becomes a serious problem and will affect the humankind (6). Therefore, it is important for Toyota to aware the importance of green making as they started taking every precaution to protect the environment. One of the significant initiative taken by Toyota is producing more fuel-efficient automobile across the road. As the responses towards the issue of global warming, Toyota became the first automobile company produce a fully hybrid vehicle which is Toyota Prius in 1997. Prius hybrid model uses internal combustion engine and electric motor as its power sources lead it better fuel-efficient and reduce greenhouse gases. Since demand of petroleum fuels increase lead to petroleum become scarcity, eco-friendly vehicles become one of the choice for consumer in the market. In 2010, Toyota Prius sold more than 2 million automobiles and became the most successful hybrid automobile in history (7). According to the report, the worldwide sales of Toyota hybrid automobile estimated reduce approximately 30 million fewer tonners of carbon dioxide and save approximately 11 billion litres of petrol to solve the shortage of petroleum and fossil fuel