Falsification of results, distortion of standards, inaccuracy of details…it’s all the same.  Someone got caught cheating and that someone is Toyota. Headquartered in Japan, Toyota is the largest automaker in the world, producing about 10 million vehicles per year.

Popular Toyota models include the Camry, Highlander, RAV4, Corolla, Tundra, and GR86, with vehicles known for their reliability, fuel efficiency, and practicality.  This latest scandal involves Toyota falsifying emissions records for more than 20 years to keep up with a competitive market.  If that’s not enough, the global automaker was found guilty of falsifying similar claims in the past.

According to the Environmental Protection Agency (EPA), “all new cars and trucks sold in the U.S. must be certified to meet federal emission standards, such as limits on the amount of smog-forming and greenhouse gas emissions that they can produce. Most testing is performed by auto manufacturers at their own facilities.” (EPA)

Toyota’s problem arose when “false results were found for certification testing and other sampling inspections for engines which claimed the products met standards when they actually didn’t.” (Kageyama) Production is now at an expensive standstill while the company aims to reform its ways.

Although Toyota admitted the wrongdoing, their rationale for falsifying claims has serious implications. Toyota chief Koji Sato expressed that the company felt compelled to cut corners to stay competitive in the automotive market. The vehicles impacted by the false emissions records tops 36,000 cars, but it alludes to more than a production problem.

Additionally, Sato noted that “Management was not able to fully comprehend and keep track of the details of what was happening on the ground.” (Kageyama) This refers to an oversight problem where managers lack sufficient control, one of the four principal management functions, over their people and production.  It is especially troubling as Toyota experienced very similar flawed testing in recent years, and it cost them dearly—$1.6 billion—for selling illegal engines between 2010 and 2022.

Certainly, Toyota is not the only automaker to falsify emission records.  You might remember “diesel-gate,” when German automaker Volkswagen was found guilty of cheating emissions tests by modifying software that improved performance. It also “emitted nitrogen oxide pollutants up to 40 times above what is allowed in the U.S.” (Hotten) and it cost Volkswagen up to $18 billion and an unmeasurable loss of consumer confidence.

Sure, it’s a production issue; sure, it’s a management issue.  But really, the heart of the matter is an ethics issue. Organizations are faced with ethical dilemmas where they are tasked with deciding on a course of action that benefits them or harms stakeholders in the environment.  Organizations, do better!