The Japanese car maker admitted it misled United States consumers by concealing and making deceptive statements over two safety issues that caused cars to accelerate even as drivers tried to slow them down. The Toyota deal with the US Justice Department, which had been expected, resolved issues that had dogged the company since at least The auto maker still faces hundreds of private lawsuits over the problems. Accelerators had the potential to get stuck under mats.
Share via Email Toyota has done many things right in responding to its current crisis: So why is its hard-won reputation still facing the biggest challenge in its corporate history?
And the key to its problems lie primarily in what happened before the crisis erupted, rather than its response to it though this has been less than perfect. Whatever Toyota says now, and however well it acts, there is a sense that it ignored the problem until it was forced to take action.
Corporate denial appears to have been the order of the day, with the company following the advice of the Japanese proverb: Some of the biggest potential crises have been identified and addressed before they ever escalated out of control: This requires an Toyota the accelerator crisis culture that is vigilant for potential crises, has open lines of communication from staff to management, and a willingness to address unpleasant truths.
In contrast, it seems Toyota had a culture ill-equipped to quickly identify and address flaws. The challenge is created by two elements of culture: As a consequence, problems with quality are literally inconceivable and denial takes over.
The second interlinked element of culture is a hierarchical approach to management and a lack of open communication. Where this exists, junior employees who are best placed to spot early signs of crisis feel unable to point out flaws.
As a result, problems go unnoticed and unresolved until they explode into a major crisis. Much better to put the fire out before it has reached this stage.
Another reason why Toyota has such a major challenge on its hands is that this crisis strikes at the essence of its reputation.
Research from the thinktank Oxford Metrica shows that when a crisis strikes at the heart of brand values, it has the ability to do most damage. Toyota has built its reputation on quality and reliability, and anything that calls this into question is especially threatening.
The same principle applied to Cadbury when Dairy Milk was found to contain salmonella in This is a lesson for all organisations: It is essential that the company remains true to these values, not just in the run-up to a crisis but also in its approach to crisis management as well.
Richard Branson interrupted his holiday to fly to the scene of a Cumbrian train crash in Anything less could have caused serious damage to the brand. As the Toyota crisis has rumbled on over the last fortnight, the company has failed to get ahead of events and take control.
It looks like the crisis is managing Toyota rather than vice versa. The fact that Toyota has had to announce a second recall only days after the first one indicates an organisation that is responding to events rather than setting the agenda. Compare this with Mattel, which managed a crisis of a similar magnitude, inwhen faced with safety concerns about its toys.
It announced an immediate recall and its chief executive Robert Eckert devoted weeks to communicating the steps the company was taking to address the issue.
As a consequence, its brand remains strong. The issue of the company spokesperson is an interesting one.
Conventional wisdom dictates that the chief executive should be the face of the organisation in a major crisis.
I would endorse this view, so long as the chief executive has the requisite skills to perform this role. No chief executive can be absent from the public eye when the business is in the middle of a crisis but this does not mean that the chief executive must be the main spokesperson.
In neither case was it the right decision to field the top man.Toyota says "a rare set of conditions which may cause the accelerator pedal to become harder to depress, slower to return or, in the worst case, stuck in a partially depressed position.". So far this year, GM has recalled million vehicles in the United States and million worldwide.
From late through , at the peak of its crisis, Toyota . Nov 21, · Startups news from the, including the latest news, articles, quotes, blog posts, photos, video and more.
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