Five months before the new 2002 Lexus ES hit showroom floors, the company's U.S. engineers send a test report to Toyota City in Japan: The luxury sedan shifted gears so roughly that it was "not acceptable for production." Days later, another Japanese executive send an e-mail to top managers saying that despote misgivings among U.S. officials, the 2002 Lexus was "marginally acceptable for production." the new ES went on sale across the nation on October 1, 2001.

In years to come, thousands of Lexus owners discovered that some of the vehicles had transmission problems, which caused it to hesitate when motorists hit the gas or lurch forward unintentionally. The 2002-2006 ES models would become the target of lawsuits, federal safety investigations, and hundreds of consumer complaints, including claims of 49 injuries.

In an August 15, 2005, memo explaining the company's position, a staff atorney wrote, "The objective will be ot limit the number of vehicles to be serviced to those owners who complain and to limit the per-vehicle cost."

In 2010, Toyota was fined a record $16.4 million for delays in notifiying U.S. federal safety officials about defects that could lead to sudden acceleration.

Do you believe national culture might have played a role in how Toyota handled the matter? What about corporate culture? What are the similarities between the Toyota case and the Ford and GM situations discussed in the chapter? The chapter being Chapter 3 in the Ethical Obligations and Decision Making in Accounting.