Case Study : Peer Review For Conflict Resolution

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Case Analysis: Peer Review for Conflict Resolution Synopsis Toyota is the leading motor vehicle manufacturer in the world today. The company is known particularly for manufacturing a wide range of high quality cars attracting a spirited competition from other globally established competitors like General Motor (GM), Ford, Hyundai, Volkswagen and Nissan. In 2009 Toyota encountered a public backlash after the discovery of a potentially catastrophic engineering defect among its brand of automobiles including its best-selling Corolla and Camry models. This led to a massive and global recall of approximately 10 million units a year later. The engineering defect caused the models to accelerate out of control and put their drivers and other…show more content…
Nonetheless paying the fine means admitting liability. This is likely to have a damaging effect on the reputation of Toyota not to mention the decline in sales that may result. In addition since the admission of liability implies consumer fraud, Toyota is apprehensive of the civil lawsuits that might follow running into possibly billions of dollars. Analysis of alternatives Toyota can pay the fine and admit liability hoping that this will not affect its reputation, especially with the government that is part of the stakeholder in the company. However, the company must be prepared for consumer fraud lawsuits that may follow afterwards. If the company assumed a shareholder model to CSR, it would avoid this option and possibly remain reactive and defensive fighting all the way to the courts. Alternatively Toyota can still project a shareholder model to CSR but assume a proactive role in trying to solve the problem. Apparently this seems to be the approach that Toyota has settled for. However, this method of handling the issue doesn’t reduce the negative impact of knowingly selling a defective automobile because as much as in the public eye Toyota recalled close to 10 million units from the US and Europe, nothing was forthcoming about what caused the problem and how the company
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