Takata Airbag Scandal: Exploration of an Ethical Dilemma Presented by: Cynthia Barclay, Adam Bell, Nate Snodgrass & Gervan Williams
Takata Airbag Scandal: Exploration of an Ethical Dilemma
Presented by: Cynthia Barclay, Adam Bell, Nate Snodgrass & Gervan Williams
Takata Airbag Scandal Analysis of Takata’s Ethical Dilemmas
Stakeholders Escalation of Commitment Slippery Slope Moral Disengagement Whistleblowers 10-10-10 Consequences
Consumer Perspective of Airbag Scandal Recommendations for Takata
Agenda
Takata Overview
Quick Facts An automotive parts company
manufacturing safety systems like seatbelts and airbags
Founded in 1933 Based in Japan 35,000 employees worldwide Began making airbags in 1988
Currently hold 20% of the airbag market
Airbag Recall
17 million vehicles affected Over 10 different automakers impacted Frontal air bags on both driver’s &
passenger’s side Installed in cars from model year 2002
through 2008 Deploy explosively injuring or even killing
car occupants
Video
Airbag Scandal Timeline
Takata Airbag Scandal Analysis of Takata’s Ethical Dilemmas
Stakeholders Escalation of Commitment Slippery Slope Moral Disengagement Whistleblowers 10-10-10 Consequences
Consumer Perspective of Airbag Scandal Recommendations for Takata
Agenda
Ethical Dilemmas
Did Takata and/or the car manufacturers know about the defects and potential danger prior to recalling the airbags?
Were the recalls intentionally delayed to avoid negative impact to the company?
What party holds more responsibility - Takata or the car manufacturers? What were their responsibilities?
If Takata and/or the car manufacturers are found guilty of ignoring evidence of defects in airbags, are the company’s executives liable for murder and/or manslaughter charges?
Stakeholders
Key Stakeholder Analysis
Key Stakeholde
rsGoals Values
Outcomes/Consequences
Influence
NHTSA
Save lives, prevent injuries and reduce
economic costs due to road traffic crashes, through education,
research, safety standards and
enforcement activity.
Safety, providing excellent service
to consumers, integrity, and
leadership
Wants all cars and car parts to be manufactured to meet all safety needs so they ultimately keep
consumers safe
NHTSA holds a significant amount of power over car and part manufactures.
They can implement fines, mandatory
investigations, etc.
Car Manufacturers
Sell cars, make a profit, maintain a reputable
brand name
Profit, safety, reputation, consumers
Wants to maintain profits and sales while ensuring customers are safe and their brand name is not
tainted
Hold a large amount of influence over when and what recalls are issued for their cars
TakataMake a profit, develop quality products, keep
consumers safe
Profit, safety, quality, brand
reputation
Benefits from making low cost, fast products for
distribution and benefits from covering up the
defects
Influence over investigation of
defects, timeliness of recalls and hiding of
defects
ConsumersBuy a safe, reputable
and reliable car
Cost, safety, brand quality
and reputation
Wants to drive a safe car with no accidents, injuries or deaths. Disadvantaged
due to the defective Takata airbags. Can be injured of even killed
No large amount of influence – only
influence comes from purchasing power
Escalation of Commitment
Escalation of Commitment: we often take our past actions into account to define our next steps, even those these past actions are already completed Takata and Honda’s denial of
responsibility continued to grow and escalate throughout the airbag scandal
The denial continued through the fatalities in 2004 and 2008
How far did the Escalation go? We may never know exactly how far
Takata and Car Manufactures went to cover up the defective airbags
IGNORED Mark Lillie’s expertise on the chemical subject matter of the 1999
decision to switch the chemical propellant in the detonator to a less
stable chemical form which he insisted has the potential to result in
uncontrolled detonation.Takata and Honda called airbag fatality an “anomaly”. They did not notify the NHTSA
and no further investigation was made public but internal experiments conducted at
Takata after business hours on salvaged airbags supported Lillie’s but Takata covered
up this evidence.In 2008, Honda and Takata denied
fault in another fatality related to the uncontrolled detonation of an airbag
and settled the out of court for an undisclosed amount. In 2008, 4k Honda vehicles
recalled
In 2009, 510K Honda vehicles recalled
In 2010, 437K Honda vehicles recalled
In 2011, 896K Honda vehicles recalled
Small innocuous acts….
…that lead to moral transgression
Takata’s Slippery Slope
Takata’s Mission Statement - Did they lose sight over their mission while dealing with this scandal?
“Develop innovative products and provide superlative quality and services to achieve
total customer satisfaction. There is no end to thinking about safety in today´s
automotive society. As a company that makes seat belts, airbags, child seats and other
products that protect life, we are aware of our responsibilities to society and want to
contribute to attaining the goal of creating a world that is safe. To do this, we will
continue to work to create and further evolve safety products and systems that people
can rely on. However, Takata cannot create a safe world by itself. Takata’s hope is that
its products will never have to be used. We would be delighted developing our safety
products in a world where they never had to be used, where traffic accidents have been
totally eliminated. Please drive carefully. Takata products are positioned between
automobiles and people. Without doubt, there are some Takata products near you. At
Takata, we dream of "a society with zero fatalities from traffic accidents."
Moral Disengagement: Convincing ourselves that moral standards do not apply to us for a variety of reasons Displacement of responsibility
Placing the blame on Takata authority figures only Diffusion of responsibility
Placing the blame on the whole company rather than specific individuals responsible for the defects and cover up
Attribution of blame User error – sitting too close to the airbags, etc.
Distortion of consequences Distancing themselves from the victims, not connecting with
the victim’s families or friends Euphemistic labeling
Takata labeled the defective airbag an “anomaly”
Moral Disengagement
Financial Impact of Recalls
Takata had a large negative financial impact after recalls were announced Did this contribute to their escalation of commitment and moral
disengagement in covering up the defects?
Whistleblowers - Conformity to Group Pressure Whistleblowers such as Mark Lillie and the 2004 engineers
that tested the airbags afterhours did not immediately disclose their experienced publically until the 2015 court proceeding.
What pressures were they facing to keep quiet? Social pressures? Pressure from management? Internal pressures? (fear of losing their job, supporting
family, etc.)
What techniques could they have used to help them speak up?
Develop your reasons and rationalizations Practice your argument with peers Gain peer feedback and coaching
Decision Impacts: 10 Days? 10 Weeks? 10 Years?
10 Days: Since 1999, the actions of the Takata
management to use a cheaper and unstable propellant in airbags did not have immediate effects in the first 10 days
10 Weeks: Since 1999, the actions of the Takata
management to use a cheaper and unstable propellant in airbags did not have immediate effects in the first 10 weeks either
10 Years: However, within the course of over 10
years, 4 fatal accidents were confirmed in which metal shrapnel was the root cause of the fatality. The decision to save money and cover up the scandal led to these devastating 10 year consequences
Consequences for Takata – How far does the blame go?
What should be the consequence for Takata executives who covered up and ignored evidence of defective airbags? Murder? Manslaughter? Financially Responsible? Not Guilty? No Blame?
Should Honda or other car manufactures share the blame and face criminal charges as well?
Consequences for Takata – How far does the blame go?
We surveyed 48 people and asked where the responsibility/blame lies
Responsibility of vehicle safety equipment lies solely with the car
manufacturer
Frequency Valid Percent
Strongly Disagree 2 4.2
Disagree 16 33.3
Neither Agree nor
Disagree7 14.6
Agree 17 35.4
Strongly Agree 6 12.5
Total 48 100.0
Responsibility of vehicle safety equipment lies solely with the suppliers
of safety equipment
Frequency Valid Percent
Strongly Disagree 1 2.1
Disagree 15 31.3
Neither Agree nor
Disagree8 16.7
Agree 18 37.5
Strongly Agree 6 12.5
Total 48 100.0
Takata Airbag Scandal Analysis of Takata’s Ethical Dilemmas
Stakeholders Escalation of Commitment Slippery Slope Moral Disengagement Whistleblowers 10-10-10 Consequences
Consumer Perspective of Airbag Scandal Recommendations for Takata
Agenda
Consumer’s Perspective of Airbag Scandal Communicating with consumers about the issues with the
airbags and/or recalls. Are the involved parties doing their due diligence and notifying
consumers? Are the notifications in a timely manner to prevent further harm?
What Consumers need? Information regarding vehicles involved in recalls
Vehicle brand Model Type of risk What to do if owns particular model Clear explanation of the risks to consumers To know that the car company cares about their well-being
Consumer Perspective - Survey Results
Who should be responsible for the safety equipment in your vehicle?
Frequency Valid Percent
Manufacturer 6 12.8
Suppliers 1 2.1
Both 40 85.1
Total 47 100.0
Responsibility of vehicle safety equipment lies solely with the suppliers of safety equipment to car
manufacturers
Strongly Disagree
DisagreeNeither
Agree nor Disagree
AgreeStrongly Agree
Responsibility of
vehicle safety equipment lies solely
with the car
manufacturer
Strongly Disagree 1 1 0 0 0
Disagree 0 13 0 3 0
Neither Agree nor
Disagree0 0 7 0 0
Agree 0 0 1 12 4
Strongly Agree 0 1 0 3 2
Takata Airbag Scandal Analysis of Takata’s Ethical Dilemmas
Stakeholders Slippery Slope Escalation of Commitment Moral Disengagement Whistleblowers 10-10-10 Consequences
Consumer Perspective of Airbag Scandal Recommendations for Takata
Agenda
Recommendations for Takata
Current: Hold an independent investigation to determine where the
problem started within Takata Coordinate with manufacturers to issue international recalls
Future: Veil of Ignorance
Quality Manager Statistical control charts
Part Testing Process Audits
Behavior affecting values → Values affecting behavior Create an accountable company culture
Company Culture Focusing and condensing the mission statement