Corporate Crisis Management: An investigation into how Japanese Culture affected Toyota’s image globally in 2009.

toyota-recall-graphic-001

 

Japan is an example of a high-context culture with high power distance and lower emphasis on individualism. Toyota’s corporate culture reflects elements of high context cultures like belief in a hierarchical management model where the employees do not question the decisions of their bosses or superiors. However, by making their two brilliant concepts, Jidoka (automation with human touch) and Just-In-Time (Lean Manufacturing), accessible to organizations around the world, Toyota has shown that it has adopted some elements of a low-context culture. 1

In 2009, Toyota had to recall 3.8 million Toyota automobiles including the Lexus Model.2 This was preceded by a fatal car crash that involved a family of four in California due to unusual acceleration. The safety and quality of Toyota automobiles was questioned in the US which tarnished the image of the brand. Unfortunately, Toyota did not handle the crisis very well. Owing to the emphasis on ‘face-saving’ in the Japanese culture, Toyota initially ignored reports. They eventually denied that their automobiles had faulty mechanisms and blamed the floor mats used in the cars. After two weeks, CEO Akio Toyoda apologized publicly which exposes the lack of a crisis communication strategy in the company.

There are some major mistakes that Toyota made in terms of handling the issue:

  1. They failed to understand that they were dealing with a Low – Context culture where consumers prefer facts and directness.
  2. They took too long to respond to the crisis which was assumed to be the result of guilt.
  3. They did not take full responsibility for the events. They initially responded with denial and eventually blamed the customers for the accidents that occurred.
  4. They did not follow a customer driven approach, instead they focused on defending the image of the company.
  5. They did not have a diverse team hence, they did not pay attention to understand the cultural differences between Japan and the US.
  6. They were not proactive but reactive. They spent a lot of money on damage control which could have been avoided.

toyotaadx-wide-community

(http://content.usatoday.com/communities/driveon/post/2010/01/toyota-asks-for-patience-in-sorting-out-dual-recalls-in-ads-today/1#.WA4pX_mANHw)

What could have been a better approach considering the resources and cultural knowledge they had at that time?

Active listening is the first step towards a successful negotiation. If Toyota had actively listened to consumer complaints and performed an in-depth probe into the root cause of the problem they could have retained the loyalty of the customers. Instead, they denied allegations and blamed victims which made customers lose their trust in the brand.

They assumed that the American consumers would be satisfied with an indirect acknowledgment of the issue without any information on the corrective measures being incorporated to fix the issue. In a cross-cultural context, they should have made efforts to understand consumer psychology in all the countries their automobiles were being sold. Failure to acknowledge cultural differences only catalysed miscommunication.

They could have taken a more consumer – driven approach to reduce the levels of distress amongst the affected consumers and instilled faith in them that corrective measures were being incorporated immediately and that consumers would be compensated for their loss. If they had responded with a time-bound strategy they could have controlled the anger and disappointment of their customers.

This was indeed a good lesson for other corporations to understand the importance of a global crisis management strategy.

 

  1. George, Amiso M and Cornelius B Pratt. Case Studies In Crisis Communication. New York, NY: Routledge, 2012. Print.
  2. George, A. and Pratt, C. (2012). Case studies in crisis communication. New York, NY: Routledge, p.228.

 

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