BUSINESS AND IT’S SUPPLIER: TAKATA AIRBAG RECALL
In 2013, Takata Corporation, an automotive parts industry, bear the consequences of airbag products defects they have sold to the clients. The airbag inflator is broken, so the airbag does not come out, even suddenly the airbag exploded without cause and the first case appeared in the United States. As a company who applied zero fatalities concept, Takata must provide safety to consumers but in reality, there are 22 casualties and more than 100 of people have accidents because of Takata airbag.
The National Highway Traffic Safety Administration (NHTSA) is an agency of the Executive Branch of the U.S. government, part of the Department of Transportation with road safety related regulations handles these Airbags case by conducting investigations and focusing safety factors more comprehensively. But the government did not act quickly even though this case has occurred since the early 2000s but until recently, only about 30-40% airbags has been replaced. There are 18 automobile manufacturer who became the clients of Takata and more than 70 million vehicles has been hit the road. How the government regulates consumer protection related to this issue? How the clients’ companies respond to this issue and protect the consumers? How far Takata’s power and influence as a main supplier to many clients in global supply chain? Why ethical issues such as defective product can affect company’s reputation? And why consumer or the general public is an important organizational stakeholder?