RMI 5051 Risk Management Spring 2019 Homework Assignment Week 2 40 points Due Thursday, January 31, 2019, before class Submit via Canvas Homework Window # 2 Perraju Dinavahi Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get Original Essay Unintended Acceleration Answers: Toyota Recall Crisis Case: After an event that happened in August 2009, Toyota's crisis began to erupt. A terrible accident in which an off-duty policeman, Saylor, and his family died instantly highlighted Toyota's inadequacy in crisis management. The cause of death was due to unintended acceleration (UA) in which the officer who was driving the car had no role. Initially, the cause of the accident was thought to be floor mats obstructing the accelerator pedal, so Toyota recalled 7.5 million vehicles worldwide and had to stop selling the best-selling car models of all times due to issues with the floor mat design. . Toyota continued to focus on floor mats and accidents continued to occur, accounting for approximately 33% of all RTAs and the cause of all of them was UA. Toyota offered irrelevant solutions to consumers and improper explanations to authorities. NHTSA issued safety alerts stating that unintended acceleration in Toyota vehicles was related not only to floor mats, but many other things such as accelerator pedal handling, engine ignition, and braking system resulting in unintended acceleration . Around the same time, Toyota released a statement saying: "A rare set of conditions that can make the accelerator pedal harder to press, slower to return, or, in the worst case scenario, stuck in a partially depressed position ” which was irrelevant to the problem that needs to be addressed and continue working on the mats. This statement added fuel to the fire and the regulatory agencies had to issue a harsh counter statement against Toyota stating that Toyota was misleading the public. The Saylor accident not only prompted U.S. regulatory agencies to further question the safety and quality of Toyota vehicles, but also triggered congressional committee investigations starting in March 2010. From 2009 to 2010, Toyota Corporation, a world leader and an extremely profitable company, ended up having a disastrous public report that cost Toyota millions of dollars in loss and trust. In January 2010, Consumer Reports dropped eight Toyota models from its approval list due to substantial recalls by Toyota that caused them to be concerned about each vehicle released by Toyota. Increasing challenges with Toyota vehicles have led them to lose customer loyalty and position in the automotive market. Rapid growth and mismanagement of the supply chain were one of the reasons why the crisis became difficult to manage. Product complexity issues struggle within the hierarchy, and managerial concerns have further weakened Toyota's ability to manage the crisis. The 2010 recall became a very serious crisis due to insufficient crisis intervention strategies by the risk management team, as was weakness in Toyota's response. The Saylor incident was horrific, overwhelming the officer's entire family, and garnering global attention. This terrible road accident confounded prevailing concerns that Toyota cars suffered from a defectelectronic which caused uncontrolled acceleration. This, in turn, puts pressure on various state and federal regulatory agencies as public safety is always a priority and thus the agencies have granted Toyota many investigations. Toyota quickly issues a press release denying media reports that a crisis exists with its drive-by-wire electronic control method. In order to bolster its statement, Toyota added to its statement an NHTSA report released two days earlier indicating that the organization had rejected an appeal from a Toyota owner to open a new investigation into the vehicle's drive-by-wire system. Toyota. Ignoring the fact according to the same report that stated that NHTSA launched an investigation into Toyota's all-weather rubber floor mats in March 2007 after several reports of unintended acceleration in the 2007 Lexus ES 350 and other models as well. Christmas 2009, Toyota Avalon, four passengers killed. Toyota said its supplier was to blame, accusing suppliers of making accelerator pedals. The problems just kept getting worse and worse. Toyota crashes accounted for 33% of all crashes and killed 37 people on board. This caused media work to focus on Toyota and draw global attention to the company. Toyota has carried out heavy recalls and these have also worked against Toyota's loss of customer loyalty. The way Toyota handled the recall concerns was not helpful to their company. It appears that some of the recalls were only issued because there was a heavy death toll and pressure from regulars. Toyota's statements and press releases have made matters even worse. Toyota needed to honestly acknowledge that there was a crisis within the company (up to the management level and above) and defects in their cars, Toyota should have behaved fairly towards people and the media, which they did not they did. If Toyota had been simple, it might have lost some customers, but it could have protected trust. I on the other hand continued to deceive the customer through the media which broke the customer's trust and loyalty. A company's reputation in global trade is critical to its existence. Toyota has exceeded the automotive industry's organizational standards over the past twenty years. The global market for Toyota has been large and profitable. Rapid growth, new models and new customers have helped Toyota stand out from other strong competitors. But the 2010 and previous crises highlighted Toyota's inability to manage the crisis. Toyota should put more effort into developing crisis management strategies. A good risk management team would improve the culture of risk awareness by designing a preventative crisis intervention model in advance. Every vehicle produced by Toyota required extensive testing for safety and quality before being released to the market. Toyota should carefully implement compliance standards including laws and regulations and thus participate in social subsidies. Toyota should not only commit to safety, but also make environmentally friendly and energy-efficient products for customers' needs. Toyota should be honest with customers and agencies. Lean manufacturing and standardization of auto parts helped Toyota reduce production costs but not quality. Toyota should take part in the standardization of production and feel more responsible for quality control. Toyota should aim to deliver.