Global Crisis Management at Toyota Essay

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Global Crisis Management: Product Recalls at Toyota

Product recalls are a public relations nightmare for companies of all sizes and types. In the minds of the public, product recalls mean that companies failed to perform their due diligence in research and development, engineering, production or distribution – or a combination of all of these factors – but the actual causes of product recalls are far less important than the adverse effects these incident have on brand image. Once these opinions are forged in the minds of consumers, they are exceedingly difficult to reverse so it is clear that when product recalls are required that they are managed in the most effective fashion possible. One major company, Toyota, provides a valuable lesson in what to do and what no to do when confronted with unavoidable product recalls. The purpose of this essay is to provide an examination of Toyota’s real-life case and develop recommendations that would help Toyota’s global leaders recover their brand loyalty. To this end, an evaluation of the definition of product-harm crisis within the context of the Toyota case study is followed by the identification of the problems the Toyota leaders must solve. In addition, an analysis of the organizational changes that were successful and unsuccessful and a Synthesis of the analysis of the literature to develop one or more recommendations for strategies Toyota might use to manage this product-harm crisis and recover brand loyalty in the global market are followed by a summary of the research and major findings concerning the management of product recalls in the conclusion.

Evaluation of the definition of product-harm crisis within the context of the Toyota case study

In his case study of Toyota’s response to the recall of tens of millions of its most popular vehicles, Rajasekera (2013) provides a systematic examination concerning Toyota’s response to the product recall problems experienced by this company in recent years. Although Rajasekera (2013) does not provide a specific definition of product-harm crisis, he repeatedly alludes to the profoundly negative effects such events can have on a major brand image.

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These negative effects are based on the perception of the brand in the minds of consumers with respect to the quality, safety, integrity and ability of companies to deliver on their promises to provide the best possible products for the prices they charge. For example, according to one definition, a product-harm crisis is “a highly publicized event caused by a product being found to be defective, contaminated or even harmful to consumers [which] could affect the entire product category. In many cases, [it triggers a voluntary product recall] or [it is] forced upon the affected company by government regulators” (Product-harm crisis, 2018, para. 2). Although government regulators did not force Toyota’s hand in the product recalls, it was only a matter of time before they did had the company not acted when it did. Indeed, Rajasekera (2013) notes that “the intervention by governments in Toyota's largest markets in North America, Europe, China, and Japan kept Toyota's management in the spotlight” (p. 1).

While Toyota (hereinafter alternatively “the company”) would ordinarily relish being in the media spotlight, it would be for far different reasons. After all, the company enjoys a large following of loyal consumers based on its well-known reputation for high quality products. In this regard, Piotrowski and Guyette (2010) report that, “Toyota Motor Corp. has not only been the envy of the automotive industry but also been held in high esteem as a symbol of manufacturing and leadership excellence in the business world” (p. 89). Over the past several decades, the company’s high-quality brand was further reinforced by receiving numerous awards for excellence and stellar reviews from rating agencies such as Consumer Reports as well as industry consultants (Piotrowski & Guyette, 2010). It was against this enviable backdrop that the series of product rccalls that would severely erode the confidence of the public in the company’s products began, and these issues are discussed further below with respect to the problems that the company’s leadership was….....

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