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The Case of Takata a Japanese Car Parts Supplier
Case details
This case revolves around Takata, a Japanese car parts supplier, and its former chief executive Shigehisa Takada. A crisis occurred due to the faulty airbags supplied by Takadas company that could explode with more power than needed, hurting and even killing the people inside the car (Chen, 2019). One may assume Takada was aware of the defect in the airbags that his company supplied to the market for years. The first complaints regarding Takats airbags began in 2000, and there have been numerous ruptures with injuries and death since (Baheti et al., 2019). However, it was only in 2014, when the company identified the use of ammonium nitrate as a propellant to be the cause of the accidents (Baheti et al., 2019). This turn of events forced the companies using Takata airbags to initiate a recall of unprecedented magnitude. Still, even when it was proven that the airbag design was flawed, Takada still insisted that his companys products were essentially safe (Soble, 2016). Hence, Takata engaged in unethical conduct by supplying its client with faulty airbags and denying the fundamental flaw in their design even after it was established.
The actions of Takata and Takada as its chief executive derived from the expected values significantly. One would reasonably assume that a company would value its reputation and the safety and well-being of its customers and, therefore, strive to provide high-quality goods and services. One would also assume that the company would value at least a relative openness in its relations with the customers, as it would also be conducive to a better reputation. However, even though Takata admitted the existence of some security risks in their airbags in 2015, the company refused to explain the issue in detail to the public (Chen, 2019). The individual consequences of Takatas unethical conduct were 14 deaths, more than 100 injuries, and Takatas own retirement and subsequent trial (Chen, 2019; Soble, 2016). Organizational consequences included a recall crisis that resulted in financial losses amounting to hundreds of thousands of dollars, which paved the way for the companys eventual bankruptcy (Soble, 2016). Finally, social consequences included a growing popular mistrust in the automotive industry, manifesting in publications such as the one written by Cox (2020). Overall, the costs of Takatas unethical conduct proved great.
After reading about the Takata case, I felt indignation at the combination of irresponsibility and lack of openness that caused it. In my opinion, it took Takata far too long to establish to cause behind the airbag explosions and initiate the recall since the company was aware of the issue at least since 2004 (Baheti et al., 2019). I distinctly remember feeling similarly after learning about the Enron case, as it was also a prominent example of how the lack of openness and neglect of ethical values led to a companys bankruptcy and damaged numerous stakeholders involved.
Understanding of Kantianism
Kantianism is one of the most well-developed and known types of deontological ethics in Western philosophy. Deontology is the branch of ethical thinking that does not evaluate actions based on their effects, as in consequentialism. Instead, it assigns an objective moral value to them according to a firm set of moral rules. Kant distinguished between the maxims of individual will, which are a persons individual ethical principles, hypothetical imperatives, which are the rules that serve the attainment of certain goals, and the categorical imperative. The latter is the universal and overbearing ethical principle that should be followed at all times and is formulated as Act only on that maxim whereby thou canst at the same time that it should become a universal law (Kant, 1785). Thus, according to Kant, the essence of ethical decision-making is evaluating ones maxims according to the categorical imperative and identifying those that are worth following.
The way I see it, Kantianism is based on the notion that ethics and morals are derived from reason. The reason is the main concept that permeates Kants ethical thinking and serves as a foundation for the very idea of the categorical imperative. It is no coincidence that Kant (1785) insists that the conception of law and categorical imperative is, for all intents and purposes, a law is only possible for a rational being to understand and employ. This is why Kantianism insists on the universal appeal of the categorical imperative: insofar as humans are rational creatures, they should all agree that following the general law derived from the reason itself is in their best interests.
In my understanding, Kantianism is particularly useful as an ethical model for business cases. One might argue that consequentialism, with its emphasis on positive and negative consequences for all parties involved, is a better approach to evaluating business decisions from an ethical standpoint. However, the functioning of the economy depends on all players in the market adhering to the same rules. Kant (1788) highlights the importance of the categorical imperative by using economic examples. In his Critique of Practical Reason, he discusses an example of having a deposit that he could deny its rightful owner without legal repercussions. He can deny this deposit to its owner, but the attempt to make this maxim a universal law would be catastrophic if everyone could withhold deposits at will, people would stop trusting the financial system (Kant, 1788). Hence, Kantianism explains that the economy only functions as long as the people adhere to roughly the same principles.
Application of Kantianism
If one reviews the case of Takatas faulty airbags through the lens of Kants categorical imperative, one will inevitably find it is an all-around ethical failure in most respects. To begin with, one should apply the central principle of Kantianism to the fact that Takata produced and supplied faulty airbags to its many clients in the automotive industry. If such a course of action would become a universal law, and every car supplier would provide severely flawed parts, the automotive industry would cease existing, as no one would risk riding in such cars. Yet it is the established fact that Takata, as a company, did exactly that and supplied airbags that resulted in at least 14 deaths and more than a hundred injuries (Stable 2016). In this light, Takatas action that started the scandal definitely does not stand up to the test of the categorical imperative and cannot be considered ethical.
On the other hand, chief executive Takadas decision to apologize to the victims of the accidents is ethically appropriate from the perspective of Kantianism. Of course, one might argue whether these apologies were sincere or convincing enough. Still, the fact is that, as of 2016, Takada took responsibility for his companys failure and admitted, if not in a legally binding way yet, that he was to blame (Stable 2016). Projecting the maxim of his will as a universal law would raise no objections in this case. Most people would agree that, if a companys actions result in injuries and deaths, its leadership should publicly take responsibility for what had happened.
However, Takadas conduct is not ethical at all in the light of the remarks he made immediately after apologizing to the victims. While admitting there were accidents, including lethal ones, he still insisted that the airbags produced by Takata were fundamentally safe (Stable 2016). By 2016, when he made this claim, Takata had two years since established that its airbags exploded due to using ammonium nitrate as a propellant, which was one of the central design solutions (Baheti et al., 2019). One can only hope that Takadas maxim, which one can formulate as when your company faces serious charges, lie to the last to protect its reputation, would not become a universal law. As a result, Takadas attempt to save face when the scandal involving his company unfolded in full was not only futile but also profoundly unethical as far as Kantianism is concerned.
Explanation
When discussing how Kantianism and my values would inform my actions if I were at chief executive Takadas place, the most obvious answer is paying greater attention to product quality. As mentioned above, supplying inherently faulty airbags or other parts would be unsustainable as a universal law because it would undermine the peoples trust in the automotive industry. On the other hand, providing high-quality car parts that pose no risks for the car users health and safety would decrease the probability of harmful or even deadly malfunctions. If one projects this maxim as a universal law, one will certainly conclude that quality and product safety should be a universal standard of production for every company (Chen, 2019). It would also be a rational choice, as providing high-quality products would endorse the companys reputation and likely increase its share of the market. Therefore, both Kantianism and my values would advise paying greater attention to product quality and safety when designing and producing airbags or any other product.
It is, of course, easier said than done, and one should not forget that people, including chief executives of large companies, are prone to making mistakes. While the idea of always making good products is commendable, it is not always realistic. The real ethical question in Takadas case is not what he could do to prevent the design and production of faulty airbags, but what was the right thing to do when they started exploding.
If I were in Takadas position and wanted to make an ethical decision based on the principles of Kantianism, I would not ignore the consistent problems with the companys products for years. The first complaints about Takata airbags exploding with too much force dated back to 2000, but Takata refused to initiate a recall even as casualties mounted (Chen, 2019). Kant would certainly deem this course inapplicable as a universal law. Moreover, as events demonstrated, it was not even sustainable as an individual maxim. In Takadas place, I would initiate a thorough investigation after the first complaints in 2000, and launch a recall after the first lethal accident. Apart from being a moral decision, it would ultimately be better in business terms. The reason why Takata went bankrupt is that it had to pay for recalling every single airbag produced up to the mid-2010s, and it proved too much for the companys depleted cash reserves (Stable 2016). However, if Takata only had to recall the airbags supplied in several years rather than a better part of two decades, it would have to pay much less overall.
In terms of my personal values, Takatas actions are severely at odds with the value of communication. The first accounts of the accident with the companys airbags dated back to the early 2000s, but Takata dismissed them as insignificant. Moreover, by 2014, Takata has already established that there was a consistent flaw in the design of the airbag that made them explode too violently (Baheti et al., 2019). Despite this fact, Takada, as the companys chief executive, insisted that the airbags were safe even after apologizing to the victims (Chen, 2019). Thus, Takata, as a company, failed to appreciate the value of communication twice. First of all, it neglected the reports that stated its product was unsafe, although these could have served as an early warning about some problems with the airbag design. Secondly, after learning the truth, the company refused to openly communicate it and continued advocating the safety of its products.
Conclusion
To summarize, the case of faulty Takata airbags demonstrates significant ethical shortcomings in decision-making. The Japanese car parts supplier produced airbags that exploded with too much force and eventually had to pay the price of a recall, but only after dozens of people died, and hundreds more were injured. Apart from these personal and organizational consequences, Takatas case also damaged the reputation of and trust in the automotive industry as a whole. Kantianism teaches that ethics and morals come from reason, and people should rationally judge their individual ethical principles to understand whether they can apply as a universal law. Takatas leadership, including chief executive Takada, eventually took responsibility for the failure, which is a good ethical choice from the perspective of Kantianism. However, Takata still supplied flawed car parts, ignored the early warnings, and even insisted that the companys airbags were safe after clearing the truth, which is all fundamentally unethical. Thus, Takatas conduct was morally unsustainable from the standpoint of Kantianism. Apart from that, the companys leadership also failed to appreciate communication as a core value, demonstrated by its unethical handling of related information.
References
Baheti, S., Moffitt., B., Pruchnik, W., & Rourke, J. S., IV. (2019). Honda Motor Company: Communication and the Takata airbag crisis. Journal of Organizational Behavior Education, 12, 1-18. Web.
Chen, Y. (2019). Deontology to judge the ethical business actions: The case of Takata. Open Journal of Business and Management, 7(2), 783-787. Web.
Cox, J. (2020). Killer airbags: The deadly secret automakers dont want you to know. Lulu.
Kant, I. (1785). Fundamental principles of the metaphysics of morals (T. K. Abbott, Trans.). Project Gutenberg. Web .
Kant, I. (1788). The critique of practical reason (T. K. Abbott, Trans.). Project Gutenberg. Web.
Soble, J. (2016). Takata chief executive to resign as financial pressure mounts. The New York Times. Web.
Do you need this or any other assignment done for you from scratch?
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