In May 2016, Mitsubishi Motors Corp said that it used fuel economy testing methods that did not comply with Japanese regulations for 25 years, much longer than previously known.
“MMC conducted testing improperly to present better fuel consumption rates than the actual rates,” a company statement said. “The testing method was also different from the one required by Japanese law. We express deep apologies to all of our customers and stakeholders for this issue.”
The company said that the reason of its fraud is because of effect of aggressive working condition in the company. The internal employees were forced by the environment to put too much importance on the fuel economy of vehicles.
In April 2016, the CEO attended a press conference, the reporter asked him how he thought about the fraud and the report process, he said it was between the employees who were involved in this fraud, and he thought it was no need to report to the highest management.
Then they recalled the relevent cars and spent a lot to make up for this fraud. While people are trying to believe it again after their actions and apologies, after less than half year, the company did the same thing again.
This time, they still apologied at once. Furthermore, they hired a group of experts to help the investigate the company’s internal fraud. After investigation, the experts indicated that it was the company collective fraud, and it was not just the fraud of any single department. CEO said he had considered the suggestions from the experts carefully and he admitted that he didn’t try his best to manage and communicate with the employees and managers. Another manager indicated that they will decrease the number of management staffs to promote better communication and he would also involve in the discussion of executives and engineers.
I think actions act better than words. Based on the previous reaction to the fraud, I could not believe their apologies. They have made the same mistakes again and again, so people already could not believe it anymore. But this time, they investigate a lot and response more quickly to the public than the last time, what’s more, the higher management and CEO have realized their own problems. After this apology, I wish they could rebuild the brand.
References
- http:reuters.com/article/us-mitsubishimotors-regulations-idUSKCN0XN0DV
- https:vice.com/article/mitsubishi-becomes-latest-automaker-to-admit-to-cheating-consumers-and-regulators
Business Ethics Case Studies 
Hi Poppy,
Great article and again, straight to the point. However, I think there are still a lot of ethical dilemmas and issues you could have mentioned. This case reminds me of Enron (in terms of nature- fraudulent activity and how the top executives are reacting.) From your article, it sounds like the Mitsubishi CEO is blaming the employees for the fraud and does not want to disclose it to the media because “it is between employees.” (2nd paragraph). What do you think of the CEO’s response to the fraud?
I think his evasion to the questions regarding the fraud make it seem like he was the one causing internal pressure. What do you think about this point?
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When their fraud firstly was exposed to the public, CEO wanted to avoid the public criticization towards himself. He didn’t want to admit faults by himself and the management. It was an irresponsible response. I think this also caused them to fall into the same fraud situation. And I think he is not the only one that should be responsible for the internal pressure, other managers and the board should also be blamed for. But CEO should take major responsibility. If he was a moral leader, he could do something to change the bad management condition.
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Hi Poppy
Nice job. Base on your article I think the apologize form the CEO was meaningless. In general, if a corporation was cut by fraud, they would stop doing it at least for a good period of time. Unfortunately, this is not the case for Mitsubishi Motors Corp . They cannot behave for even a year. Also, it seems to me that the CEO’s apologize is more like a blame to their employees. I think in a large corporation like Mitsubishi Motors Corp , the top managers should be hold responsible for the action. where are you stand for this issue?
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I totally agree with you. As I said in my post, I think the company should do everything to stop this fraud and also change the management style of the company.
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Hi Poppy,
I totally agree with your main idea in the article, and take some practical actions is the best way to solve the problem. But I don’t think the apologies from CEO are meaningless since CEO stands for the core value of the whole company, they share most ideas in a firm through the up-down channel. If they CEOs’ show their attitude, I think the lower managers would know what kind of idea they should hold.
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I think the apology from CEO in April 2016 made no sense because the company did the same thing again. However, when the CEO apologized this time he said it was a result of the whole company, I think he has realized the true problem, so I believe this time his apology could make sense.
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