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Create a 6 pages page paper that discusses the diseconomies of toyota company


Create a 6 pages page paper that discusses the diseconomies of toyota company. Toyota had created a corporate brand reputation of a world-class level based on the commitment towards excellence in manufacturing and design, focus on customers, continuous improvement, reliability, and quality. Owing to this reputation, Toyota has been able to enjoy several benefits including financial strength, customer loyalty, and market share. According to research scholars Steinmetz (2010) and Quelch, Knoop, and Johnson (2010), the rapid growth of Toyota had created stress on the manufacturing, engineering, and design which may lead to the consecutive occurrences of quality issues. This had, in turn, demanded the company to recall the vehicles at the beginning of 2003. However, the quality-related problem of Toyota gained national attention in September 2009, after the public release of a recorded complaint that was associated with a certain incident. There had been a recorded call to 911 regarding a car crash which was being driven by an off-duty California highway patrol officer. The crash had resulted in the death of the officer along with his family members. This accident was caused by the uncontrolled acceleration due to the floor mat problem which sticks to the accelerator pedals. Owing to this incident, the company recalled 3.9 million vehicles in the US on September 29, 2009. The matter gained attention in January and early February of 2010 when 2.3 million vehicles had to be taken off the roads due to the sticking pedals. Toyota stopped selling eight of its models in North America, had shut down its production plant and increased their intensity of recalls in China and Europe. The CEO and the president of the company had apologized for the recalls. Another recall associated with Prius Hybrid, one of their best selling vehicles, was initiated due to some banking problems. After this third recall, the total amount of recall between 2009 and 2010 totaled eight million that included six million in the US itself. Owing to the crisis related to the uncontrolled acceleration, the responses by the business of Toyota had aroused concerns regarding the reputation of the organization. The car accident had affected the reputation of the organization to a lesser extent than the damages done by the disclosure and communications, recalls and apologies previously. The confidence of the customers was seen to exhibit a sudden fall. The customer reports survey showed that the pre-eminent reputation of the organization plunged from 30 percent to 19 percent. In the case of Toyota, the recalls were done in the years 2004, 2005, 2007 and 2009-10 due to different problems related to brakes, engines, and accelerators, which had totaled to over 8.5 million vehicles. This staggeringly high number was considered to be sufficient to damage the trustworthiness of the organization. A positive reputation can be said to be as good as the effort that is taken to create and sustain it.

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