Toyota is a Japanese international automobile company that has successfully penetrated the world automotive market. In 2010, the new Toyota Prius and Lexus HS250 products had a bad impact on Toyota. floors (floor mats). The result was a massive recall of the Toyota Prius and Lexus HS250 in Europe, America and Japan. The car's braking system software is reported to be malfunctioning, the gas pedal is reported not to return to its original position after being stepped on, and the floor mat is reported to be interfering with the gas pedal movement. Inherent gas pedal problems have led to fatalities. Internal Toyota documents saying that Toyota saved $100 million by avoiding investigations into product defects were also leaked to the public. As a result, there was public pressure that led to the recall of 8.5 million Toyota cars worldwide and Toyota suffered losses of up to US $ 2 billion.

On February 23, 2010, the president of the Toyota company, Akio Toyoda gave testimony (hearing) at the congress which was attended by the US Transport Secretary. This congress increased supervision of car production in the United States, especially for Toyota products. Toyota made several changes after this congress. These changes take the form of: (1) Toyota sends software to NHTSA to read black boxes in Toyota cars; (2) Toyota changed the recall decision procedure and committed to forming an independent committee as the holder of authority to execute the recall decision; (3) Toyota managers are required to drive a Toyota car to expedite problem identification in Toyota products; (4) the double security system is applied by Toyota; (5) Information sharing and communication is improved within the Toyota company. Even so, Toyota still runs the risk of losing its reputation as a result of a major recall problem. Loss of reputation not only reduces corporate value, but also reduces shareholder value. Therefore, Toyota devised several strategies to restore its organizational values.

To restore consumer confidence, the first step taken by Toyota was to carry out a large-scale restructuring, including group companies in Japan such as Daihatsu and Hino Motors. At that time, 18 Toyota factory groups in Japan produced several different types of vehicles. In summer, production at each of these plants will be divided into vehicle types, such as large cars, small cars and minivans. Toyota aims to create a suitable environment for execution and quality improvement through streamlining production for every type of vehicle.

At the meeting of the Special Committee for Global Quality on March 31, 2010, Toyota decided to set up a closer network for information gathering by placing seven bases in North America and Europe, as well as six bases in China, so that it can respond promptly to accident reports through dispatches of experts to scene. Toyota also plans to develop a more specific strategy in the future.

Question :

1. The case analysis uses the five elements approach in COSO ERM, integrating strategy and performance 2017!