The risk management plays a significant role in contemporary business organizations, and it comprises with risk assessment, risk mitigation strategy, and risk evaluation. Risk assessment comprises with risk identification, risk analysis and risk assessment. Because of not maintaining an appropriate risk management system, the company like Toyota also has brought misfortune for the company. It has led to defective products by the company so that they reputation and brand image of the company is at stake. The report is on risk management approaches of Toyota, and it illustrates risk appetite, risk attitude, risk consequence and risk impact of the company when recognizing the risks of the company.
In this stringent competitive market, minute mistakes also fetch severe consequences, and in order to stop mistake, adequate prevention is most important. In this precautionary issue, risk management plays a vital role in the organizational growth and development by minimizing the risk associated with the business activities (Ushanov, 2015). In the case of Toyota, it is observed that acceleration issues of many cars by this company become a nightmare for the company.
The risk management is one of the most important factors for the company, and it plays a vital role in smooth running of the companies. The inappropriate risk management and measure can bring disaster for the company and companies can be sunk for not deploying adequate risk measurement. The company like Toyota, which is considered as the global leader in car manufacturing has faced severe consequences for not deploying an appropriate risk management system and which affect its production (Haney, Mazzola & Schroeder, 2005). The company has produced many defected cars that result in heavy fine and loss of reputation and brand image. The company should provide adequate emphasis on risk management and total quality management that the company can offer its product with quality assurance which supports in maintaining its reputation and brand image. Toyota failed to maintain its quality because the company had taken aggressive growth strategy and in order to increase the volume of its production and increase the speed of production forgot to maintain the quality and safety measure that cause a severe problem for the company (Jordão & Sousa, 2010). The company has to face severe monetary losses as well as its reputation is also threatened in a serious way.