While Toyota‘s woes are the big news, there are numerous other cases of companies inflicting defective or dangerous products onto the public. In the case of Toyota, there also seems to be some evidence that the government was aware of the problems for quite some time, yet acted in ways that seem contrary to the public interest. Toyota has also been accused of covering up problems.
Of course, Toyota has paid for these actions. Millions of vehicles have been recalled for repairs and consumer confidence has been shaken. In my own case, I bought a Toyota in 2001 based largely on Toyota’s reputation. While the truck has worked out well for me, I cannot say that I would buy a new Toyota today. I suspect many other people are also wary of the company now.
Given the damage caused by such problems, one wonders why companies do such things.
In regards to problems with cars, the answer can be both simple and honest: cars are complex machines and can have various problems that do not become evident until they are exposed to a wide variety of conditions. Such potential problems are simply part of the nature of an imperfect world.
Of course, this cannot be used as an excuse across the board-eventually a somewhat vague line is crossed and a corporation can be justly regarded as producing a defective product. For example, I do accept that my PC might have problems if I attach certain peripherals or load certain software. However, if my video card catches on fire due to shoddy manufacturing, then the company is at fault. In the case of cars, I accept that certain unusual conditions might create unanticipated problems. But, the brakes and accelerator in cars need to work properly and failures in this area are not acceptable.
Not surprisingly, companies do not intentionally make products to cause them trouble. Rather, they produced such products through negligence or in an attempt to make money by cutting corners. When a problem is found, the natural tendency is to cover it up rather than face up to it.
One reason to do this is to avoid having to pay for the consequences of the problem. For example, if a company accepts responsibility for a defect, this makes it much easier for laws suits to succeed in this area. Also, if a company can cover it up, it can avoid having to pay for the repairs. So, money is an important factor.
Another reason to do this is to avoid the harm to the brand reputation. After all, if the problem stays hidden, the company retains its reputation. This also motivates individuals. For example, Spitzer, Clinton and Stanford did their best to hide their affairs.
A third reason to do this is that people are naturally inclined to hide their failures and resent those who would correct them.
However, the tactic of the cover up is generally a poor strategy. In addition to the obvious ethical issues, the strategy often creates more damage in the long run than being honest.
In his Apology, Socrates noted this. He pointed out that people who do misdeeds prefer to remain hidden and uncorrected, but that they should be grateful for a gadfly who keeps them on track. After all, by being corrected, they will be more likely to do what is correct. But, if they are free to hide their misdeeds, then they will be even more inclined to act poorly and thus end up in a worse situation than if they had been open to criticism.
Toyota seems to be in this situation: they were aware serious problems and seem to have acted to try to conceal them by using their relation with the regulatory folks and by other means. It seems that getting away with such things might be habit forming. In any case, it does seem to be natural for people to slack when they know they can get away with it. As such, Toyota can be faulted for doing wrong, but the folks who were supposed to be their gadfly also deserve blame.
When Socrates was on trial, he told his accusers that they were doing themselves harm. He seems to have been right. While companies would no doubt prefer to get away with whatever they wish to do, this actually turns out to harm them. While Toyota did enjoy a delay in the consequences of its failures, it is now paying the price. If the company had been properly regulated and brought to task for past problems, it might not bee going trough the disaster it is facing today. Hiding misdeeds just allows them to grow, as Socrates well knew. As such, proper regulation can actually be very good for companies by helping keep them from hurting themselves.
“While Toyota did enjoy a delay in the consequences of its failures, it is now paying the price. If the company had been properly regulated and brought to task for past problems, it might not bee going trough the disaster it is facing today.”
Properly regulated? You mean specific regulations to make sure floor mats don’t cause gas pedals to stick?
Like TJ said, keep piling regulation on top of regulation–even if the individual rules have minor positive impact–and watch the system grind to a virtual halt.
I can think of tons of laws that are on the Maine law books that I was resposible for enforcing as a cop. But thanks to “Police Discretion” I didn’t have to enforce all of them all the time because they din’t serve the greater good. Nailing old ladies for Jay Walking is a waste of time and pollutes people’s idea of justice.
Toyota is paying the price of market Darwnism; something you’ve said in the past doesn’t exist. I’m sure other companies are quickly inspecting their own floor mats… We could however do just what Obama did and give Toyota tons of money to make up for their losses, and thus make sure other companies don’t care what kind of floor mats they have.
Viva la revolusion.
Michael LaBossiere says
I have two main points: 1) Too much regulation is (almost by definition) bad. To use a metaphor, if companies are so chained that they cannot move, then they will not be able to operate effectively. This can also be supported by drawing an analogy to liberty in a broader sense. 2) Too little regulation is (also almost by definition) bad. If companies are free to get away with too much, they will presumably do so on some occasions. An analogy to laws restricting criminal behavior can be drawn here.
Regulating business behavior is analogous to regulating other behavior. If we begin with the assumption that some people will do wrong if they are not restricted, then if we wish to avoid that wrong then we must impose restrictions. But, these restrictions must (as Locke and others have argued) serve very specific purposes: to prevent harm and to promote the general good.
Changing. Too many A.K.A Aliases out there.
Is there a difference between the word ‘lend’ and the word ‘give’?