Writing Assignment: Crisis Communication
Toyota is a global leader in the manufacture and sale of a wide range of cars. The business of Toyota was lucrative, comfortable and very successful for many decades until 2009 when the business was hard hit by an unfortunate violent wave that nearly tainted the company’s historical reputation. The business cycle is defined by frequent ups and downs, Toyota suffered from a down crisis in 2009. The company, however, managed to survive the test of time to prove its effectiveness in crisis management, and regain its market reputation and competitiveness through appropriate communication, proper planning and execution. The remedial actions taken by Toyota presented the company as an exemplary leader in effective crisis management to restore back its lost glory.
Toyota’s longstanding and world renowned reputation was for the first put to test on August 28, 2009 when Mark Saylor, an off duty Californian highway officer was driving along the highway with his three family members. While driving his car, its gas pedal became stuck down and car accelerated out of control, speeding to above 100mph and in San Diego. The car ran into another vehicle with four passengers on board, all of who died. The news of this deadly wreck spread to the public domain as soon as the 911 tap was released. United States transportation secretary Roy Lahood immediately ordered all Americans to refrain from driving Toyota vehicles with immediate effect. The fact that the US forms a reasonable market for the company, this ban would be a heavy blow for the business which was already struggling with the 2009 global economic crisis. Remedial action was therefore inevitable for Toyota to salvage the situation. Toyota in response took an immediate action of recalling approximately 5.4 million vehicles to correct the faulty front driver’s side floor mat, the foot pedal and install a pedal entrapment. The effective management of this crisis was first explored by the issuance of a preliminary report by the company. In the preliminary report, Toyota revealed that the car driven by Saylor might have been serviced wrongly and fitted with a floor mat that interfered with gas pedal. The company asked all car users to remove floor mats that interfere with foot pedals in their cars. Toyota modified its floor mat recall to reconfigure accelerator pedals, replaced all weather floor mats with thinner mats and installed brake override system to foreclose abdicable acceleration and eventually sold 3.4 million vehicles to North America. (McRae 2016)
In January 28 2010 after the four months of lethal wreck in San Diego another accelerator accident occurred in Southlake. This crash involved a Toyota Avalon that slipped due to uncontrolled acceleration and claimed four more lives. This incident occurred despite the fact that the Avalon had also been involved in the floor mat recall and its driver had already removed the floor mat as it was recommended by Toyota. Toyota in response recalled its more than 16 million vehicles globally. This huge recall did not only badly affect the company’s financial performance but also adversely affected the reputation of Toyota. The Toyota accelerator recall became a global fuss due to the large numbers involved; it involved eight reputed models. Toyota had a fantastic reputation which was put at stake by the crisis. Fatal crises changed the people views about reputation about Toyota. Toyota efficiently and effectively handled the crisis and within three months the company was successfully back to its lost glory. Toyota responded crises effectively in three distinctive ways. (McRae 2016)
Firstly, the company effectively managed the crisis by having the company’s CEO apologize for the loss of human lives in the accident. In his apology, he also made all the customers who were affected by recall to understand that nothing was of more importance in their cars than safety and reliability of the vehicles. Toyota also halted its production and explained to customers how such a decision was detrimental to the business health. The entire company united and acted as a unified front to provide quick and reliable service during the recall process. Jim Lentz in a bid to restore customer confidence said, “We are focused on making this recall as simple and trouble-free as possible, and will work day and night with our dealers to fix recalled vehicles quickly. We want to demonstrate that our commitment to safety is as high as ever and that our commitment to our customers is unwavering.” Toyota took corrective actions and developed favorable conditions to gain and retained customers trust. In the press, Toyota focused on quelling the antagonistic feelings of customers that were triggered by the fear of having sticky accelerator pedals in their cars.
Toyota communicated to give a good response towards crises and positively influenced customers and stakeholders’ perceptions about her reputation. (Knoespel 2015)
Secondly, Toyota effectively responded to the crisis through the structural changes of the aforesaid brake and accelerator pedals. The gas pedal crisis and uncontrolled accelerator crisis were both interlinked and therefore Toyota engineers fixed the accelerator pedal problem and began a worldwide distribution. The new accelerator pedals were prepared by Toyota major suppliers, CTS crop. Toyota American organization worked with CTS to devise a new design and effectively solved issues related to accelerator pedal. North American quality panel created a separate safety group for giving safety and quality advices to Toyota’s North American Affiliates. Toyota CEO Akio Toyoda emphasized on upgrading product qualities all around the world and also the safety within the organization. Toyota engineers developed an effective solution of pedal accelerator problem by avoiding excess friction that previously caused the pedal to stick. Toyota also installed a small pedal in some automobiles that had qualified sudden acceleration to prevent a repetition of the pedal acceleration problem in future. To all sudden qualified acceleration automobiles, the pedals were recommended by safety and security experts. (The Toyota recall crisis case study 2016)
Thirdly Toyota effectively addressed the crises by defensive responses. During that time, Toyota initiated counterattacks on media outlets and governmental bodies. Toyota stated that the company went off the fence to correct what they believed was misinformation. Toyota also claimed that there were great confusions and misinformation about unintended accelerations. Toyota’s major defensive statement was, “there are many factors that led to unintended acceleration, they are not all sudden’’. Toyota also, in a bid to quell the issue by giving defensive responses, argued that a mechanical fault could happen to all automakers. Toyota had, for instance, a major defensive attack on NHTSA. Toyota reported that NHTSA database was unable to provide correct information and lacked sufficient details to uncover the actual accident cause. Toyota explained that because of NHTSA inefficient information database, Toyota is unable to make people aware about accident. Instead of feeling guilty, Toyota shifted blame on NHTSA in order to maintain its reputation and to solve crisis. (McRae 2016)
Therefore, Toyota effectively managed its crises in following ways: first, Toyota used communication strategy that effectively convinced stakeholders and motivated the customers; secondly, Toyota recalled for change applied technology to develop an effective solution for the pedal accelerator problem; thirdly, Toyota used defensive response to regain and maintain its reputation. Toyota faced few but hazardous crises during 2009 To 2010 but it tried to overcome issues of accelerator and brake pedal problems that caused the demise of a whole family. Toyota cooperated with its suppliers and other parties such as CTS Corporation to effectively avoid fatal crises in the future. Toyota believed strong leadership is a key strategy for survival in the competitive automobile industry. Toyota’s top leadership played a critical role in convincing stakeholders and motivating customers. Toyota also employed an effective communication strategy to overcome customers’ fear about fatal accidents and convinced them that nothing was more important than their safety. Toyota has grown to world largest car manufacturer due to the recall for change. Toyota proactively managed its crisis through technological modifications and reduced vehicle accidents by introducing small pedals in automobiles that had qualified sudden acceleration. Toyota used technology to efficiently strengthen product quality and safety. Toyota responded to this critical and threatening situation by defensive statements. Toyota found that in order to survive it needed immediate remedial actions; communication, to be fine-tuned (structural modifications), shift of blame and strong counter arguments.
References
McRae, C. (2016). FINAL PROJECT TOYOTA GROUP. . Retrieved from
https://www.academia.edu/9989158/FINAL_PROJECT_TOYOTA_GROUP
Knoespel, R. M. (2015). ‘How did Toyota stay on top?’ Revisiting crisis communication
discourse. Retrieved from http://epublications.marquette.edu/cgi/viewcontent.cgi?article=1072&context=theses_open
The Toyota recall crisis case study. (2016). Retrieved June 17, 2016, from
http://www.bsgco.com/work/cases/toyota-reputation-management
Coombs, W. T. (2007 October 30). Crisis management and communication. Gainesville: FL:
