You are on page 1of 10

CulturalCrisis

A case analysis of the companys 2010 recall and the communications crisis that could have been avoided.
By Ashley Nichols

In late 2009, a public relations nightmare that had been brewing finally became a full-fledged storm of bad publicity when the Toyota Motor Corporation recalled more than 4 ! million "ehicles due to a gas pedal and unintentional acceleration concern #or$ing in concordance the %ational &ighway Traffic 'dministration (%&T)'*, the company had attempted to fi+ the problem both by recalling of affected models and encouraging Toyota owners to remo"e improperly fitted floor mats, which were thought to be the cause of the issue Meanwhile, 'merican media outlets were reporting about Toyota,s so-called correcti"e actions 't the beginning of 20-0, Toyota,s future appeared tumultuous 'fter yet another gas pedal recall, the car company suspended its sales and ceased production of affected models .y /ebruary 4 , 20-0, the company had recalled a total of 0 - million "ehicles (1' Timeline 2f,3 20-0* .y this time, 'merican politicians and Toyota owners had become increasingly distrustful towards the pre"iously well-considered company Most of this ill-will had come to light not because of the company,s actions, but because of its inactions
Toyota,s public relations response to the recall crisis was "ery slow, and many 'mericans began to belie"e that the company had something to hide or was trying to co"er its trac$s The C42 of the company, '$io Toyoda, did not ma$e a statement about the crisis until /ebruary 5 (1' Timeline 2f,3 20-0* The 'merican media critici6ed the company for a lac$ of transparency and action while the situation was unfolding &owe"er, Toyota had been ta$ing action The issue was that the company had been practicing 7apanese style public relations and was unprepared to face the cultural differences that turned the crisis into a media firestorm
th

'nother difficulty the company faced were the differing "iewpoints of its public relations practitioners in the two countries 8uring the recall crisis, reports surfaced of 7apanese and 'merican public relations practitioners would get into screaming matches during phone

Toyotas Cultural Crisis / 1

conferences as they tried to con"ince one another that their methodology of communication was the more effecti"e one This was ineffecti"e for both sides Instead of addressing the issues or resol"ing the recall, the Toyota representati"es wasted time arguing about how to handle the crisis This is because public relations practices "ary greatly in the 9nited )tates and 7apan :ublic relations in 'sian countries (and at Toyota* differs greatly from 'merican traditions of communication #hen a crisis stri$es in 'sian countries, the company in"ol"ed wor$s silently to resol"e the problem before addressing the media &owe"er, this method is seen as unprofessional in the 9nited )tates where consumers, politicians and other affected parties e+pect answers first and action second 9nfortunately for '$io Toyoda, the company also disco"ered the harsh reality of 'merican business e+pectations #hen a company is responsible for a crisis, 'mericans e+pect the company,s C42 or :resident to address the people and apologi6e for whate"er wrongdoing is ta$ing place In 7apan, e+ecuti"es bow as a form of apology The deeper the bow, the deeper the regret the e+ecuti"es hope to e+press In the 9nited )tates, howe"er, apologies are not enough (1Toyota,s :resident ;etting,3 20-0* 'mericans often desire answers and e+planations for the crisis that has occurred If those e+pectations are not met <uic$ly enough, they are <uic$ to blame company e+ecuti"es for the issue 'n e+ample of this contrast was made clear in a C.) article titled 1Toyota=s :resident ;etting &arsh :> ?esson 3 In the article, Toyoda,s 1poor crisis-management s$ills, coupled with a corporate culture built on doing things slowly by consensus3 are cited as the reasons for the company,s public relations difficulties (1Toyota,s :resident ;etting,3 20-0* &owe"er, the corporate culture of consensus is not e+clusi"e to Toyota In fact, that method is "ery common among 7apanese businesses 9nli$e in the 9nited )tates, where big decisions are often made

Toyotas Cultural Crisis / 2

<uic$ly in meetings, consensus is essential to preser"ing office harmony 2ften, a decision has been made through <uiet conser"ation amongst employees and e+ecuti"es prior to a meeting being held (>eid, -999* #ith the rise of technology, globali6ation continues to spread across the world 9nfortunately for the Toyota Motor Corporation the 7apanese methods of public relations does not translate well to other countries across the globe Therefore, what was a company to do@ 'fter the recall crisis, Toyota was faced not only with the public relations crisis of distrust from the 'merican public and media, but also with the tas$ of attempting to impro"e the way its employees communicated with one another and with the public 'fter the recall crisis faded from media headlines, Toyoda too$ steps to impro"e the company,s communication methods and the way it does business 'ccording to an article in the %ew Aor$ Times, Toyoda 1tried sha$ing up Toyota,s hidebound corporate culture byB getting outside ad"ice3 (1'$io Toyoda,3 20--* 't this time it is unclear what steps Toyota has ta$en to resol"e the cultural issue of its public relations problems, but steps ha"e been ta$en to impro"e the public,s perception of the company 'n ad"ertising campaign reasserting Toyota,s commitment to <uality and safety too$ to the airwa"es in 20-0 'lso, during the fall of that year, a series of ad"ertisements discussing Toyota,s technological brea$throughs and how they can impro"e people,s li"es began to be aired 'n e+ample of these positi"e messages is the story of a soccer mother who, as she watches her son play football, discusses Toyota,s technological ad"ancements that are used for safety testing The message to consumers is clear that to the Toyota Motor Corporation, safety is a priority

Toyotas Cultural Crisis / 3

In the aftermath of the crisis and the public relations problem, many were left wondering what steps Toyota would ta$e to regain its pre"iously pristine reputation &owe"er, despite a drop in sales during 20-0, the carma$er is ma$ing an astounding comebac$ ?ittle more than a year after the crisis, it appears as though Toyota is ma$ing a reco"ery in both reputation and sales 'ccording to the /ederal Chamber of 'utomoti"e Industries, Toyota was the most purchased brand of new car in March 20--(1Toyota, &onda ?ead,3 20--* There are a number of recommendations that could ha"e been made to Toyota e+ecuti"es during the crisis to impro"e the outcome of the situation and mediate disagreements between 7apanese and 'merican practitioners :rior to any type of crisis, a mandatory cross-cultural program during which representati"es and e+ecuti"es of the Toyota company in different countries interact with one another to learn more about common business practices and e+pectations of differing cultures should ha"e been implemented #hen the crisis struc$, each of the public relations teams in different countries should ha"e de"eloped a speciali6ed response for each country,s communicational e+pectations 'lthough the Toyota public relations fau+ pas became a case study in how not to practice effecti"e public relations, it will hopefully $eep the carma$er and other 'sian companies from ma$ing similar mista$es in the future If the company wor$s to encourage a more international public relations perspecti"e and maintains its commitment to safety, this crisis will soon become a thing of the past and will not ha"e any long-term effects The company,s reco"ery within the span of a year is e"idence enough that in today,s fast-paced world, consumers are forgi"ing if a company is willing to impro"e and ma$e change

Toyotas Cultural Crisis / 4

PR Plan

Executive Summary 8uring the 20-0 gas pedal recall, the Toyota Motor Corporation suffered a public

relations crisis that led to a decrease in consumer confidence Though many components contributed to the public relations issue, one of the primary problems was due to miscommunications and misunderstandings between public relations practitioners from different countries affected by the recall !5 Situation Analysis
In order to pre"ent future discord, the Toyota Company has de"eloped a new 1Communication 'cross Cultures3 program for its public relations e+ecuti"es, which will allow them to tra"el to different Toyota head<uarters throughout the world to meet with local practitioners The program will be implemented e"ery year, and different representati"es from each Toyota head<uarters will be selected to participate in the program during each cycle Though cultural understanding is essential to the success of e"ery business, hands-on e+perience wor$ing with practitioners in different cultures will facilitate future communication between public relation practitioners from different locations and the publics they wor$ to inform

C-

Goal The goal of the 1Communication 'cross Cultures3 program is for Toyota public relations

practitioners to begin to thin$ internationally while wor$ing locally in order to facilitate communicate between representati"es from 7apan, the 9nited )tates, India, 'ustralia, the 9nited $ingdom and other locations

Toyotas Cultural Crisis / 5

IV.

Objectives 2bDecti"es for the 1Communication 'cross Cultures3 are both impact and output

obDecti"es Impact obDecti"es of the program include encouraging more open and effecti"e communication between public relations practitioners and impro"ing public perceptions of Toyota,s public relations policies 2utput obDecti"es include planning the new program, submitting press releases announcing the new program to public relations media outlets and (for public relations e+ecuti"es* participating in the program 22 Target Audience Target audiences for the program campaign include Toyota public relations practitioners and outside public relations practitioners in 7apan, the 9nited )tates and elsewhere around the world VI. Key Messages Toyota is committed to international and cultural understanding The company is also dedicated to pro"iding e+cellent ser"ice (including communication* to its customers VII. Strategies

4"ery year, public relations practitioners representing each country where a Toyota factory is presents will tra"el to another Toyota location to wor$ side-by-side with those practitioners for two wee$s 4"ery host site will welcome at least one practitioner from each participating country Through this cultural e+change, both guests and hosts will educate each other about the business e+pectations and cultural communications traditions of their country

VIII. Tactics 8e"elop schedule for public relations practitioner tra"el rotation based upon a"ailability, seniority and annual agenda

Toyotas Cultural Crisis / 6

Implement application process for practitioners interested in participating the program I . !udget The budget for the 1Communication 'cross Cultures3 program is dependent upon a number of currently unpredictable factors (number of participants, tra"el costs, etc * &owe"er, Toyota will set aside E-0 million for the planning and implementation of this program The budget will be reconsidered and adDusted accordingly one year after the program is initiated 24 Evaluation The effects of this program will be measured through a number of e"aluation tactics including sur"eys distributed to Toyota public relations practitioners concerning the ease of communication between different countries Inter"iews with participants will also be used to measure progress

Toyotas Cultural Crisis / 7

"or#s $ited '$io Toyoda (20-0, 7une 25* The New York Times, >etrie"ed from httpFGGtopics nytimes comGtopGreferenceGtimestopicsGpeopleGtGa$ioHtoyodaGinde+ html
' Timeline of Toyota >ecall #oes (20-0, /ebruary --* CNN.com, >etrie"ed from httpFGGwww cnn comG20-0G9)G02G-0Gtimeline toyotaGinde+ html@hptIC2

&ogan, 8a"e (20-0, /ebruary 24* Toyota=s pr crisis offers lessons for other businesses AbileneBiz, >etrie"ed from httpFGGwww reporternews comGnewsG20-0GfebG24Gtoyotas-prcrisis-offers-lessons-other-businessesG >eid, T > (-999* Confucius lives next door %ew Aor$F >andom &ouse, Inc Toyota, &onda ?ead )ofter Car )ales in March (20--, 'pril 5* HeraldSun.com, >etrie"ed from httpFGGwww heraldsun com auGnewsGbrea$ing-newsGtoyota-honda-lead-softer-car-sales-inmarchGstory-eCfrfJ$o--22C0!40!JC-J Toyota In"ites 2utsiders to .oost Kuality (20-0, 7uly -2* ualit! News Toda!, >etrie"ed from

httpFGGas< orgG<ualitynewsG<ntGe+ecuteGdisplay)etup@newsI8I9-20 Toyota=s :resident ;etting &arsh :> ?esson (20-0, /ebruary 24* CBS.com, >etrie"ed from httpFGGwww cbsnews comGstoriesG20-0G02G24GearlyshowGmainC2!0450 shtml The Toyota >ecall Crisis (n d * "otorTrend.com, >etrie"ed from httpFGGwww motortrend comGfeaturesGautoHnewsG20-0G--2H-00-HtoyotaHrecallHcrisisGno" ember html

Toyotas Cultural Crisis / 8