The document summarizes the Takata airbag scandal, analyzing Takata's ethical dilemmas including stakeholders, escalation of commitment, slippery slope, moral disengagement, and whistleblowers. It discusses the consumer perspective and recommendations for Takata. Key points include Takata ignoring evidence of defective airbags in 1999, covering up subsequent fatalities, and facing consequences like large financial losses and potential criminal charges due to their role in deaths caused by the defective airbags.

1. Takata Airbag Scandal:
Exploration of an Ethical Dilemma
Presented by: Cynthia Barclay, Adam Bell, Nate
Snodgrass & Gervan Williams

2.  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

3. 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

5. 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

6. Video

7. Airbag Scandal Timeline

8.  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

9. 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?

10. Stakeholders

11. Key Stakeholder Analysis
Key
Stakeholders
Goals 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
Takata
Make 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
Consumers
Buy 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

12. 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

13. 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

14. 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."

15. 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

16. 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?

17. 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

18. 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

19. 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?

20. 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
Disagree
7 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
Disagree
8 16.7
Agree 18 37.5
Strongly Agree 6 12.5
Total 48 100.0

21.  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

22. 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

23. 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
Disagree
Neither Agree
nor Disagree
Agree
Strongly
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 Disagree 0 0 7 0 0
Agree 0 0 1 12 4
Strongly Agree 0 1 0 3 2

24.  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

25. 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