Surname: 1 Motorola and Toyota CSR initiatives All corporate organizations are required to take responsibility for their acts inside and outside its business environment. Such acts could involve the environment, social welfare, human resource initiatives, relationships between the firm and its workers or the external environment, health and safety of the employees at work and any other moral or ethical measures that the company is supposed to address so that its operations are in line with the set standards and norms (GANESCU). The company is therefore obligated by these norms and standards to be responsible for its acts in the society within which it operates. There are various justifications as to why corporate social responsibility initiatives are important. The first of those reasons is that the initiatives make sure that the corporate entity upholds high moral standards in its dealings with the environment and the society. The second justification is that upon being granted a license to operate, the company has a responsibility and a duty to maintain the standards and requirements of the license lest it be revoked by the entity that issues the license. The other justification is that the company has a duty to uphold its reputation. It is by upholding that reputation that its customers, creditors, the society and its employees will have faith in it and therefore it will be able to maximize its profits. A company that fails to uphold its proper ethical behavior and morals loses its reputation and consequently its ability to maximize on profits. It ceases to sustain itself and its employees (GANESCU). Various reasons concerning the need for corporate social responsibility initiatives have been advanced. The first of those reasons is to enable the corporate entity to improve on its financial performance. A company that maintains good ethics and morals is able to keep its customers and consequently to maximize on its income. The converse is also true. Moreover, a
Transcript
Surname: 1
Motorola and Toyota CSR initiatives
All corporate organizations are required to take responsibility for their acts inside and
outside its business environment. Such acts could involve the environment, social welfare,
human resource initiatives, relationships between the firm and its workers or the external
environment, health and safety of the employees at work and any other moral or ethical measures
that the company is supposed to address so that its operations are in line with the set standards
and norms (GANESCU). The company is therefore obligated by these norms and standards to be
responsible for its acts in the society within which it operates.
There are various justifications as to why corporate social responsibility initiatives are
important. The first of those reasons is that the initiatives make sure that the corporate entity
upholds high moral standards in its dealings with the environment and the society. The second
justification is that upon being granted a license to operate, the company has a responsibility and
a duty to maintain the standards and requirements of the license lest it be revoked by the entity
that issues the license. The other justification is that the company has a duty to uphold its
reputation. It is by upholding that reputation that its customers, creditors, the society and its
employees will have faith in it and therefore it will be able to maximize its profits. A company
that fails to uphold its proper ethical behavior and morals loses its reputation and consequently
its ability to maximize on profits. It ceases to sustain itself and its employees (GANESCU).
Various reasons concerning the need for corporate social responsibility initiatives have
been advanced. The first of those reasons is to enable the corporate entity to improve on its
financial performance. A company that maintains good ethics and morals is able to keep its
customers and consequently to maximize on its income. The converse is also true. Moreover, a
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company having good morals and ethics is able to increase on its share of the market. Increasing
a company’s share of the market enables it to reach to more and more customers (Peter Jones).
The more customers the company reaches, the more the returns in its business ventures. The
company with good ethics is also able to reduce on operation costs. Operation costs arise when
the company is required to answer to a number of court actions due to its unethical behavior or
even when the company is forced to make compensation and pay damages for its immoral acts to
the society (Peter Jones).
The other reason why a company must have corporate social responsibility initiatives is
to make sure that it reduces both internal and external conflicts. A company that upholds its
integrity, ethics, morals and confidentiality is unlikely to have conflicts with its employees.
Likewise, a company that takes care of the environment, upholds high sanitation levels, ensures
that the health of the neighbors and its customers is maintained and that the relationship between
its employees and the customers is cordial will highly likely not find itself in conflicts. Contrast
this view with a company that pollutes the environment quite often, does not maintain the
corporate-customer relationship and does not maintain the good health of its employees. Such a
company spends a lot of its money in court battles and also paying damages and compensation
for its acts or the acts of its employees (Gebler).
There is increased customer loyalty for a company that upholds its integrity and morals.
Customers are selective in the sense that they will always seek the services of the company that
puts into consideration the well-being of the customer. Very few customers, if any, will seek the
services of a company that always finds itself in disputes and clashes with its customers
(Maishanu).
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With such kind of a background about what corporate social responsibility entails, this
paper has an onerous task of interrogating the corporate social responsibility initiatives that have
been undertaken by two companies namely the Motorola Company and the Toyota Company. In
doing so, the paper will also discuss any disputes, if any, that the two companies have found
themselves in and how they have managed to solve the disputes. The paper will adopt a
comparative approach in an attempt to succinctly illustrate which of the two companies has been
able to initiate the better approaches to corporate social responsibility.
Motorola Company
Motorola was initially an American company dealing in telecommunication services and
mobile accessories. The company was based in a US state of Illinois at the city of Schaumburg.
When it first came into the market, it operated under the name Galvin Manufacturing
Corporation in 1928. The company registered the name Motorola in 1930 as a trademark and
started operating under that new name until 2011 when the company registered a loss of over
$4.3 billion. That year, the company split into two other companies each operating under the
name Motorola as its surname. The two resultant companies are Motorola solutions based in
Chicago and Motorola mobility based in Illinois. The later was viewed as the direct successor of
the original Motorola Company and was later in January 2014 purchased by Google Inc.
This paper therefore has an onerous task to discharge. This task concerns the Corporate
Social Responsibility initiatives advanced by Motorola Solutions, Motorola Mobility and later by
Google after the 2014 merger and takeover. Motorola Solutions believes that Corporate Social
Responsibility is all about good business with their clients. To them, it does not matter whether
the people concerned are its customers, shareholders, stakeholders, neighbors or employees. The
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company believes that good business involves having fair dealings with the people who form
part of the business enterprise and also the others who are not even closely related to the
company. That is why the company has gone an extra mile into assisting people in disasters,
calamities or those in dire need of assistance. The company, in its website, believes that the most
important thing that every company must think about is the protection of the environment.
Protection of the environment, the company believes, not only makes the people have trust in the
company but also helps retain the customers for the future. Any attempts to conserve the
environment have left the company being admired by many people and the company believes
that this has contributed to the loyalty it has enjoyed from the people so far (Solutions).
Moreover, the company engages itself in a number of community support initiatives that
are aimed at enhancing the lives of the people. Some of these initiatives will be discussed in a
short while. The company believes that its corporate social responsibility initiatives are aimed at
being inclusive, safe and compatible with a healthy working environment. Such inclusivity is
aimed at making its customers loyal and creating a responsible business that has the lives and
feeling of the people at heart. This loyalty of customers will enable the business to explore new
business opportunities and attract the best working force. It is always highly likely for workers to
join those companies that are sensitive to the well-being of their employees.
A quick look at the Motorola code of conduct at page one reveals a quote by Mark Twain
to the effect that one should always do right because by doing so someone will be gratified while
other people will be astonished. This is a quote that acts as the driving force of the company
because all the employees are reminded to do the best to their customers not only to gratify
someone but also to astonish others (Motorola Mobility Code of Business Conduct).
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From the code of business conduct, the company stands for the following: integrity,
accountability for all its actions and actions of its employees, courage in doing what is right and
from doing what is wrong, ethical leadership and mutual respect. From the same code of
business conduct, the company outlines what it prohibits. The things that the company prohibits
include: misuse of confidential information held by the company in trust for its shareholders or
on its own behalf, mishandling of business records by the company employees, retaliation
against actions of customers or competitors, corruption in form of taking bribes from customers
and other outsiders and conflicts of interest.
The Motorola Mobility Company encourages its customers to speak up in case they
experience any of the things that are prohibited by the company. By speaking up against theses
vices, the company ethics department is able to undertake the necessary measures to curb any
such vice(s). The company has therefore created a website for customers and other affected
people to voice their concerns to the company ethics department. The two websites are
motorolamobility.ethics.com and [email protected]. There is also a line that customers are
encouraged to call directly to the company ethics department and seek help in case they
experience any of the vises described herein above. This line is 1-866-839-5946.
The Motorola Mobility Corporate Responsibility Policy on the other hand stipulates what
the company is expected to do and what it is not supposed to do. According to the provisions of
the policy, the company has the responsibility of taking all possible measures to ensure that the
business enterprise provides a safe working environment to its workers and the society at large.
This is done by ensuring that all waste is disposed of effectively and also by making sure that the
environment within which the company operates is safe. The company also ensures that the
products it produces are in line with the Electronic Industry Citizenship Coalition (EICC) code of
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conduct which governs the standards of all electronic devices (Motorola Mobility Corporate
Responsibility Policy ).
The policy also provides that all the standards that apply to the life cycle of electronic
devices are maintained and will therefore not permit the continued use of already expired
products in their market. Furthermore, the company policy provides that all workers affiliated to
the company and all the subsidiary companies are supposed to be treated with the respect that
they deserve and the company will go a long way to ensure that there us respect in the working
environment. The policy concludes by providing that the company will ensure that the operations
of the company are carried out in an environmentally responsible manner and that this is done in
an ethically sensitive way.
Furthermore, the Motorola Mobility Company has an Environment, Health and Safety
(EHS) Policy. This is a policy that stipulates what the company should do in an attempt to ensure
that there is adequate safety of employees and customers, that pollution to the environment is
minimized and drastically reduced and that resources are conserved in the best way possible. The
management and the workforce does this by ensuring that the design, manufacture and
distribution process of its products is environmentally friendly, ethically sensitive and morally
accepted among the consumers and the society at large. This paper had the privilege of looking
at the LRQA Business Assurance Certificate of the company for the years 2000, 2010 and 2012
(Motorola Mobility EHS Policy ).
The Motorola Mobility Human Rights Policy on the other hand targets employees,
suppliers and all other people that the company does business with. It is aimed at making sure
that the company carries out human rights activities that are legal, ethical and that the process of
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recruitment is carried out with high integrity levels. The company does this through a process
that is free from any form of discrimination on the basis of gender, race or religion. The
recruitment process is also aimed at being on a freely-chosen basis. There is no room for forced
labor or employment, child labor or a situation where workers are exposed to long working
hours. The company, according to the human rights policy, ensures that it pays to its employees
the minimum legal wage that is conventionally accepted all over the world. In a nutshell, the
company does not allow for wage discrimination. Employees have the freedom of association in
form of trade unions and societies and are also free to bargain for fair deals collectively against
the company, provided that their collective bargaining power is within the accepted legal limits
and standards. The Motorola Mobility Company does not allow for harsh treatment of workers or
any other inhumane treatment that is rated as unfair and unacceptable conventionally. Towards
this end, the company has created a website for customers and employees to report any form of
mistreatment to the ethics department of the company. There is also a calling line to this effect,
as this paper provided for herein above (Motorola Human Rights Policy ).
The company has a Supplier Code of Conduct V. 1.3 which was released in June 2013.
The code is aimed at being in consistency with the Electronic Citizenship Coalition Code of
Conduct (EICC), Volume 4 of 2012. The code provides that the suppliers of the company in
whichever country that they operate in must adhere to the rule and laws governing conduct in
those countries. They must also ensure that the supply chains of the company products are safe to
work in and that they have the interest of the consumer at heart. The code borrows a lot from the
company’s code of business conduct discussed earlier in this paper. The code has six major
sections namely; provisions as to the requirements of labor which bars any child employment
and working for long hours of the day. The section also provides that the wages must be fair for
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every employee and that they must meet the legally accepted minimum wage requirements. The
other sections are provisions regarding health and safety of employees, environmental safety,
ethical conduct, sensitive management systems and requirements as to supplier assessments and
resolution (Motorola Supplier Code of Conduct).
In line with the European Union Regulations, Motorola Company has continued to notify
the consumers of the products that do not contain REACH SVHCs (Substance of Very High
Concern). The company has succeeded in notifying its consumers of the products that are safe
when used according to the instructions that the company provides. These products include wired
headsets, data cables and stereo headsets. These attempts to notify the consumer of the products
have enabled the company to ensure that the consumer is aware of the safety of the product that
they are using and that the company is ready to take responsibility of any acts or omissions on its
part or on the part of its employees.
The Motorola Mobility Company has also been able to conduct its Greenhouse Gas
Emission verification independently to ensure that the independent assessment of the amount of
Green House Gas (GHG) it emits to the atmosphere meets the 90% conventionally accepted
threshold for accuracy. This verification was conducted by Cameron-Cole on May 29, 2013. The
company does this in an attempt to ensure that its operations are in line with the conventionally
accepted standards of greenhouse gas emissions which ultimately ensures that the atmosphere is
not left to suffer for its acts or omissions.
This paper has had the privilege and the opportunity to look at the Motorola Company
Corporate Social Responsibility reports of the years 2007, 2008, 2009, 2010, 2011 and 2012. A
close look at all these reports reveals one cross-cutting thread. The reports have provisions
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regarding the measures that the company has taken to have a low carbon future in the atmosphere
and also an attempt to contribute in making sure that there are greener operations. The company
in these reports has reported that it has tried to the best of its ability to make use of alternative
materials in the manufacture of its products because such materials as brominated flame
retardants and polyvinyl chlorides that the company uses as raw materials for the manufacture of
its products have proven to be hazardous to the environment. The company is therefore planning
to make use of recycled plastic which is less hazardous and also reuse or recycle the materials
that it has already used in the manufacture of its products.
Another common feature in the reports is that the company has made measures to ensure
that there is a responsible supply chain for its products all over the world. This chain will be
governed by the suppliers’ code of conduct and the code of business conduct for the company.
The company has also discovered that there are conflicts in the areas where the raw materials it
uses in the manufacture of its products are mined. It is therefore working on a plan to ensure that
this conflict is solved amicably. Moreover, the reports have information to the effect that the
company has been supporting communities in such areas as assisting them to fight disasters such
as famine and earthquakes. Other assistance has come in the form of projects which are aimed at
promoting the health of the communities and contributing to their well-being. The company does
this by conserving the environment in which these people live and also protecting the
environment from pollution as a result of its activities.
Concerning education, the company is accredited for launching the FIRST Robotics
Competition in 1989 which has been in operation since then to date. The company also launched
the FIRST LEGO League and a number of Robotics Clubs in such states as California, Illinois
and Pennsylvania. The winners of the various competitions that are involved therein are
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sponsored by the company to study engineering in various US universities. This has enabled
many people who are talented in these sporting activities to also attend school and learn new
professions. The company by doing so enhances its relationship with the people who are not
even its consumers.
Concerning Corporate Responsibility Management, the Motorola Company has ensured
that it has a team that is capable of coordinating all the company teams all over the world. The
company has suppliers of its products all over the world and it places a burden to the
management team to coordinate the activities of these teams all over the world. The management
ensures that the teams uphold the company’s vision, mission and guiding core values wherever
they go by ensuring that their activities do not infringe on the environment, customers and other
people inhabiting the places that they sell the company products. To achieve this noble objective,
the company established the Global Reporting Initiative which gives all the customers of the
company products the opportunity to report any malpractice by the company’s supply team or
commend the company for the good work the team is doing.
The company has also established internal communication systems in form of intranets,
e-news surveys that are aired every week, the management meeting its employees on weekly,
monthly or quarter-yearly basis as time allows, management sending leadership messages to its
workforce, and the provision of internal audio or video systems. This has been done to ensure
that the management team is in touch with what its employees and also to ensure that there is
effective communication.
Motorola has not been involved in unethical, immoral or illegal practices in the recent
past. The only legal battle that has involved the company was the one concerning patent
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infringement with Apple. Apple claimed that Motorola had infringed its multi-touch software
embedded in its prestigious phone (iPhone) in making its android phone.
Toyota Company
Toyota is a Japanese motor vehicle manufacturing company which is based in Aichi in
Japan. The company was formed as an independent company in 1937 and has since then hitherto
traded as an independent company. In 2008, the sales registered by the company were announced
to have surpassed those of a rival motor vehicle manufacturing company General Motors and this
made it the number one motor vehicle manufacturing company in the world. In 2014, this year,
Toyota Company was named the fourth largest company in terms of revenue. In the ensuing
session, this paper will discuss the corporate social responsibility initiatives that have been put in
place by the company to safeguard its ethical, moral and legal relationships with its customers
and other entities.
Corporate Social Responsibility Initiatives by Toyota Company
A close look at the Toyota website reveals what kind of a company it is. The welcoming
note at the website reveals that the company wants the customers to be rewarded with a smile by
the good deeds that the company has for its customers. In the year 2011, the company launched
its Global Vision (Toyota CSR Initiatives ). The vision aims at making the company the number
one motor vehicle manufacturing country in the world and also a company that makes its
customers happy by selling the best products to them. The company has embraced the “tree
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metaphor” incorporating the roots, trunk and the fruit. The roots stand for the company corporate
values, guiding principles and the way forward. By having the roots as the values and principles,
the company metaphorically sends a message to its customers that just like a tree stands stable
anchored by its roots on the ground, so will the company be anchored onto the motor vehicle
manufacturing business by its values and guiding principles (Toyota CSR Initiatives ). The trunk,
on the other hand, stands for the continued growth and stability. It also symbolizes the
sustainability that the company has been able to register after being guided by the roots, i.e. the
values and guiding principles. The fruit symbolizes the goals of the company which are anchored
on its desire to produce the best cars in the world and also enrich the lives of the communities
that it serves by making sure that it always provides its support whenever it is required to do so.
The company seeks to have long lasting harmony with the people. It also seeks to
harmonize its activities with the demands and dictates of the global environment and in fact, its
policy is anchored on sustainable development of the community. This will be done through the
process of Monozukuri which means manufacturing. The happiness of the people is also brought
about by the company’s attempt to manufacture vehicles which are environmentally friendly and
also hybrid in the sense that they do not emit lots of harmful substances to the atmosphere. The
company also aids the happiness of the people by conducting such activities as biotechnology to
produce the best products for its customers, afforestation to ensure that there is enough forest
cover on land and ensuring traffic safety in all the roads. The company states that it does all this
to aid the happiness of the people.
The company also, as part of its corporate social responsibility initiatives, provides
education to its consumers. This is anchored on its CSR Policy which is aimed at contributing
towards sustainable development of the people. In addition, the company has a plan for open and
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fair communication for all its employees and customers. Its CSR Initiatives on the environment
are anchored on three pillars. The first pillar concerns itself with ensuring that the company
establishes a low carbon society by minimizing the amount of carbon gas that its manufacturing
activities emit to the atmosphere. The second pillar concerns itself with establishing a society
which is able to recycle its waste to produce other usable products from substances which could
have been thrown as waste and continue polluting the environment. The company therefore
makes sure that it recycles its waste that is capable of being recycled before getting rid of it. The
third pillar is about protecting the environment and making sure that the society so established is
in harmony with nature. How does the company do this? The company does this by reducing the
impact of its processes of manufacturing, distribution and marketing of the same on the
environment. All this is embedded on the so called 5th
Toyota Environmental Action Plan
(Toyota Environmental Responsibility).
The Toyota Company has an environmental management system that takes care of
environmental affairs. Under environmental management system, the company has established
environmental management systems all over the world which shall relay environment-related
information from whichever country in the world. Under this system, the company also has a
Toyota Earth Charter which was formulated in 1992 and revised in 2000. The charter contains
information concerning ways and means of conserving the environment.
Toyota Company has also come up with a plan to increase awareness on the part of
employees regarding environmental conservation. Under this plan, based on the Tsutsumi plant,
those employees who are able to come up with suggestions regarding ways of conserving the
environment are rewarded dearly in order to motivate them to continue conserving the
environment in future. The company has an environmental committee which is chaired by the
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president of the company. This shows how serious the company is concerning environmental
conservation. On top of this, the company annually publishes the so called Toyota Green
Purchasing Guidelines which aid the company in its endeavors to conserve the environment.
Under corporate citizenship, the company has laid down various plans and initiatives
which will see the company taking part in activities that are aimed at improving the lives of the
impoverished and marginalized people all over the world. Under this program, the company
takes part in youth activities. The youth activities are aimed at assisting the youth to engage
themselves in activities that are not only rewarding but are also able to assist other people in the
community to meet such needs as shelter, food and clothing.
Through the company’s manufacturing process, the company has been able to promote
science and technology among the youth. The company does this by selecting the youth and
training them on how to handle their machinery. The successful ones are picked and educated on
such courses as mechanical engineering. This initiative has enabled the youth to be engaged
constructively in activities that not only assist them but also assist their families in meeting their
daily needs.
The company ensures that its employees respect the culture and customs of the people of
all the nations that the employees visit. This is because the company has representatives in
virtually all countries in the world and therefore it is only fair that its employees learn the art of
respecting other people’s culture so that the company benefits from this mutual respect and in the
process win more customers for its products. A company whose employees do not respect the
culture of other people is likely to lose on the number of faithful customers that it has. The
converse is also true (Toyota CSR Initiatives ).
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Toyota Company has a tradition of honoring the language of the people who live in the
various countries that its employees visit during their marketing tours. Some of its employees go
to an extent of learning the language of the people which makes it even easier to interact with
them. It is also mandatory for the company employees to respect the spirit of law of the country
that the employees are doing their marketing activities. The employees are trained to respect the
law of the land and adhere in every respect to what the law of the particular country provides.
The company bears responsibility for the actions or omissions of its employees through the
doctrine of vicarious liability and pays damages whenever the employees are held liable. This
shows the level of respect that the company has extended to the laws of the countries that their
employees carry out their marketing activities.
Through the doctrine of information disclosure, the company has been able to make sure
that every employee and customer is up-to-date with all the information that the company holds.
Customers are always free to log into the company website and get all the information that they
need concerning the company. Complaints are also channeled to the company ethics team and
dealt with accordingly. The company has provisions for philanthropic activities for its employees
towards the society. It welcomes all its employees to feel free to offer philanthropic services to
the society as a way of giving back to the society. All employees who have anything to offer to
the society are made to feel free to do so (Toyota's Social Contribution Activities).
Through the program christened “society and culture volunteer”, Toyota Company has
enables people all over the world to appreciate and build on their culture. The company has
various initiatives that aim at improving the culture of the people. Some of those initiatives
include the Toyota community concerts which are based in Japan which in conjunction with
other Japanese cultural groups have joined hands to promote local amateur orchestra. This
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program has enabled various talented people to realize and build on their talents for their own
good and for the good of the society. The other program is the Toyota Youth Orchestra Camp
which makes use of youth talents to promote Japanese culture. Through this initiative, the Toyota
Company has managed to sell itself out to the people and this has enabled the people to have
faith in its products.
Other cultural initiatives include the Toyota music library, Toyota lobby concerts, Toyota
art management and Toyota choreography awards. All these have had a role to play in the
initiatives made by the company to promote culture (Toyota's Social Contribution Activities).
The company is on record for donating cars occasionally for such projects as disaster
management, education, health and environmental management systems. This is done through
the company’s initiative christened “100 cars for good” (Toyota CSR Initiatives ). Moreover, the
company has been having various initiatives to assist the survivors of the Great East Japan
Earthquake to recover from its aftermath. This program has been christened the Disaster Area
Recovery Support. This shows how sensitive to the lives of the people the company is and has
continued to be.
This paper had the opportunity to look at the various reports that the company has
compiled on its website concerning its corporate social responsibility activities. Among those
reports is the sustainability report which carries in itself a detailed coverage of the annual
activities that the company carries out on the environment. The report has such details as the
environmental conservation measures, reforestation initiatives and the company’s attempts to
reduce carbon gas emissions. The other report concerns vehicle recycling in which the company
has compiled its initiatives regarding vehicle recycling in an attempt to reduce waste on the
environment which leads to pollution. The website also has reports regarding the company’s
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social contribution activities. These activities include the extent to which the company has
assisted the society in such areas as disaster management, disease control, education, culture and
sports.
Some of the guiding principles that have kept the company on track are the principle of
faithfulness, which demands that all employees to be faithful to the dictates of the company
vision and mission. The company also demands that all employees be studious and creative. It is
this creativity that enables the company to innovate and bring new products in the market.
Employers who are creative are motivated to be even more creative so that the company makes
more strides in innovation (Toyota Traditions: Origin of The Toyota Way). The company also
demands that all its employees be practical and avoid any acts of frivolousness. Practicability
enables the employees to practice what they tell their clients and customers and therefore the
customers will trust them more. The company encourages its employees to make the business
environment like a home by ensuring that the atmosphere is friendly for everyone. This enables
the company to attract even more customers to its advantage. Furthermore, the company
principles dictate that the employees maintain respect for spiritual matters. The company does
not in any way bar its employees from following any particular faith as long as all that is done by
the employee is for the good of the company and also the individual (Gillespie).
This paper also looked at the company’s code of conduct. To this end, the code provides
that all the company dealings must be conducted in a way that is free and fair. There should be
maximum transparency and total disclosure of information to the company employees and also
the public whenever they require the information. Shareholders must also be provided with all
important information whenever they require it. The political will of the nation where the
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company is domiciled should also be respected, not to mention that the religious perspectives of
the people must be respected to the later.
One of the biggest scandals that have ever hit Toyota Company is the 2009 car crash that
killed all the passengers that were aboard the vehicle which was headed to San Diego (Gillespie).
After initial investigations into the crash revealed that there had been a defect in accelerator
pedal in some of its vehicles, the company was put under a lot of pressure from all quarters to
recall all its vehicles that had such defects, public apologies from the president of the company
for such a failure and disclosure of all available information concerning the accident. The
company was accused of delaying to diagnose the problem in the care that caused death of all the
passengers who were aboard that vehicle. Two days after the accident occurred, the Toyota
Company issued a statement regretting for such loss of life and showing concern that it could
have been as a result of a fault on the part of the company but promised to work in conjunction
with the National Highway Traffic Safety Administration to unearth the cause of the problem.
most competitors of the company accused Toyota of poor accountability for the safety of
passengers, failure to respond to customer complaints in time poor relationship with the
regulators of the highway services.
The company was also accused of having a rigid and centralized corporate culture which
barred it to responding to crises promptly like the one in San Diego (Chris). Toyota bowed to this
pressure and recalled 3.8 million vehicles back to the manufacture plant. It also made a public
apology in the year 2009 and promised to improve its internal and external communication
systems by the year 2010. The NHTSA also fined the company $16.4 million as a result of its
inability to respond to crises occasioned by defects in its vehicles (Josh).
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The irony, however is that later investigations revealed that the accident was caused by a
fault on the part of the driver, not a defect on the part of the company as it was earlier alleged.
The loss that the company had suffered, damage to reputation, reduction in sales, reduction in
market share and a dent in its investor/consumer confidence were difficult to cure. No amount of
apology could cure this either. It was a big loss for the company (Gillespie).
