Toyota’s Corporate Social Responsibility
Category : Auto Industry Essays, Corporate Social Responsibility Samples, General Motors Case Studies, Toyota Case Studies
Toyota’s Corporate Social Responsibility
An enterprise’s usual main goal is to establish itself in the business world
and reach the largest market possible. Shortly speaking, business is basically
about money-making. Employing jobs is the most important benefit an enterprise
gives that helps run the economy. The business industry is the main core of
economy of a country. However, gaining profit should not only be the sole focus
of a business. Founding an enterprise engages in larger social responsibility.
Social responsibility involves everyone in the society, from individuals to
groups and organizations. It is an ideology that citizens should not function as
individual beings with selfish motives but instead contribute to the welfare of the
society. In the business world, corporate social responsibility (CSR) is a
mechanism of self-regulation in which it continues to focus on gaining profit but
ensuring the enterprise abides by the law, support ethical standards and consider
international norms. In this case, businesses embrace the responsibility of its
stakeholders, employees, consumers, communities and the environment.
Essentially, corporate social responsibility deliberately includes the public interest
into enterprise decision-making and voluntarily eliminates practices that harm the
general public. However, critics debate that CSR distracts the fundamental
economic role of businesses because considering public interest might decrease
its contribution to the economy in financial terms. Considering public interest
could confine the innovations and market of an enterprise, thus losing money.
But nonetheless, the pressure applied on industry in improving ethical business
processes has increased due to arising issues of 21st century marketplaces.
Regardless of the size of an enterprise, corporate social responsibility has
definitely found its place in every establishment. And Toyota is one of the leading
group companies that consider corporate social responsibility.
Toyota Motor Corporation (TMC) was established in 1937, starting as a
division of Toyoda Automatic Loom Works devoted to the production of
automobiles under the direction Kiichiro Toyoda, but later on became an
independent and separate company. During the World War II, the company was
dedicated in the production of trucks for the Imperial Japanese Army. The trucks
were kept simple as possible like having only one headlight placed on the center
of the hood. After the war, Japan experienced extreme economic difficulty
pushing the company on the brink of bankruptcy. But due to announced layoffs
and reduced wages, union went on a strike and the company had to change the
management. The start of the Korean War helped to revive the company by
taking more than 5,000 vehicle orders from the US Military. In 1960s, Toyota
began to expand research and development facilities. And up until now, Toyota is
one of the largest automobile manufacturers around the globe.
However, due to alarming concerns of threats of climate change due to
carbon emissions, the automobile industry is pressured to innovate hybrid cars
that will reduce carbon emissions from burning oil fuels. Toyota acknowledged
the challenge of reducing the contribution of carbon emissions by pioneering the
concept of hybrid technology, thus mass producing the world’s first co-efficient
vehicle, the Toyota Prius.
Toyota Prius featured the Hybrid Synergy Drive which integrates aspects
such as an optimum mix of electric motor and petrol engine and electricity
regeneration through the braking system. It allows the vehicle to run at an
optimum level in terms of emission efficiency, generating up to 89 percent fewer
tailpipe pollutants than a conventional combustion engine. It is a big step in
addressing the threats of global warming. Innovating a hybrid car does not only
establish its leadership in the market but also proves its concern in environmental
However, Toyota cars were recalled early this year due to safety
complaints of faulty brakes and accelerators. Toyota was criticized by the
dragging company’s response over the issue. Moreover, the initial decision of
repairing the faulty components instead of replacing them resulted in customers’
outrage. The company who has prided itself in competitive quality took a severe
blow by this crisis, plunging down sales and stock price.
Despite being one of the leaders in the automobile industry, Toyota has
suddenly lost its name and reputation. Although the company responded to the
environmental issues, it has failed to prove its dedication to the customers
because of the company’s reluctance to solve the problem. Also, the company
refused to accept safety lapses of their cars.
Nonetheless, corporate social responsibility is a big accountability that
should be totally embraced by an enterprise.
Biswas, Prithwish, The History of Toyota
Corporate Responsibility, Sustainability and Climate Change, February 2010
Dissection of Corporate Social Responsibility, October 2009
Nowak, Margaret and Gail Thomas, Corporate Social Responsibility, December 2006