Development and Management of Ethical Strategies - Essay Example

Public Relations Public Relation is a crucial department that entails development and management of ethical strategies using communication to build relationship with stakeholders and public. The role of public relations is to promote goodwill and understanding in an organization, business or a corporate. Communication in the business, industry, and corporate world is paramount. It is an indication of openness and accountability (Pride et al 2011:242). This is because the media and the public in the contemporary world are much more interrogating than the past. The failure to have a transparent communication leads to lose of credibility in the world market. This in turn results to tremendous lose of financial gains due to lost orders. The public relations should therefore strive to do their best to when crises set in (Curtin et al 2010:28). This paper will explore the public crisis in Toyota Company. First, the research will seek to address the role of a leader in management of crisis in a corporate. Second, the research will look at the alternatives in which the Toyota manager could have minimised the crisis before it happened. Third, the paper will highlight the roles of internal communication to achieve efficiency in a corporate. The paper will finally examine the effects of long crisis to reputation of and success of organisation. The Role of a Leader in Managing Crises Crises are unavoidable in organisations, businesses, or corporate. This striking change has detrimental effects to a corporate or an organisation. It is a situation when an organisation or a corporate finds itself under uncalled for scrutiny because of its behaviour or that of its staff. Crises may happen gradually or abruptly because of laxity of individuals or an organisation. Product tampering may plunge an organisation into deep disaster (Johnstone & Zawadi 2009:143). Toyota Company experienced a crisis back in the year 2009. The president and CEO of that time Katsuaki Watanabe was overthrown in presence of 400 Toyota workers. The reason to expel the CEO was the poor performance of the Company’s cars. The matter was in the public domain courtesy of media conjectures. This was after the lack of appropriate communication with the public. His successor, Mr. Toyoda failed to rescue the company from criticism that had widely spread. Toyoda was hesitant to respond to the media amidst increasing criticism (Bensinger and Ralph, 2010). When the situation exacerbated, Toyoda made appearances in the press to quell the increasing vilification. However, this was a late intervention of the CEO because the matter was out of the hand. There was poor communication between the Toyota Company in one hand and the media, and public on the other hand. This was a total failure of the top management to address properly the customer concerns. The crisis raised serious concerns about the role of a leader in managing crises. In times of crisis, the leadership of organizations should take immediate measures to minimise or stop any detrimental effects. The leadership ought to strive to solve it internally before it gets out to the public domains. The organization should take necessary steps to recall of its product that display unworthiness as soon as possible. This aims to restore customers’ confidence to the organization. This promptness to address the public is very essential for maintaining a strong touch with customers (Smith 2011:25). It avoids unsolicited speculations that may stem from the public. For instance, a company deals with manufacturing of drilling machines can recall it or provide the after sale service when it develops mechanical problems. This swift strategy helps to rectify the inefficiencies in the machines. In this way, the company maintains its brand in the competitive market. Second, the leadership of organisation should assume responsibility. This does not matter whether the crises emanates from the company or from outside. It calls for the organisation to agree that it was its faulty. The company should move ahead to fix the problem. This indicates that the company is very much concerned about the welfare of its customers (Devlin 2006:26). It demonstrates that the leadership puts the matters of customers top in its list of priorities. For example, when the product of company receives a negative response in the public, the leadership should listen to them. They must not blame the masses. For the continuity and maintenance of reputation must yield to the demands of the purchasers. Third, a good leadership team should be honest. Companies give the solid facts about a particular concern that elicits a public outcry. A good leadership ought to be in the forefront to paint the right picture as the situation unfolds. It is naive for the leadership to hide information in during the times of company’s turmoil. This leaves the public, rumourmongers, and the media without a room to speculate. For instance, when an organisation experiences a challenge that shakes its stability it should not maintain silence in presence of press or public (Martin 2010:783). Constant doctoring of information will prove that the company is incompetent and unreliable. Fourth, company’s leadership must be accessible to the news media in times of crisis. Companies should embrace the unparalleled technological advancement such as internet. They should use the Websites to post the relevant facts that concerns the crises at hand. This is because the media seeks information anywhere in times of crisis. When the management of the company is unavailable, the reporters turn to the workforce. The workers can misinform the media that can lead to disseminating wrong information (Martin 2010:781). In the case of Toyota Company, Akiyo Toyoda’s first response to the media in February 5th in 2010 left many gaps for media speculation. First, the CEO gave a simple statement that the company was concerned about the welfare of customers. Toyoda did not give the practical steps of what the company was doing to correct anomalies in its products. The CEO invited media speculations when he failed to respond to the media question. The media concluded that the company had little concerns about to wellbeing of the customers (Roger and Bensinger, 2010). The press could only conjecture that the company was intentionally withholding information about the crises in its product. The initial hesitant move of the CEO to attend a press conference on 9th February 2010 revealed to the media that Toyoda give handles the matter with the seriousness it deserves. The exacerbated the Toyota crises. The media continued with their negative painting of the story. This led to a remarkable reduction in the numbers of Toyota customers. This gave the Toyota competitors a trading advantage (Guardian 2012). The matter negative impacts of press coverage could have been different if Toyoda gave the right facts to the media. The CEO did not openly admit that it was the faulty of the company. Toyoda could have given the media the tangible steps the company was taking to rectify the problem. The CEO did this when the negative picture of the company had already spread. Toyota was a Crisis in the Waiting To a big extend, there was an indication that Toyota was to enter in a big crises. In August 28, 2009, reported California an incidence whereby a car ran out of control. The model of the car was Lexus ES350 from Toyota Company. This of this car was in the accelerator. The investigation to look at the defect revealed that the wrong floor mats interfered with the pedal gas. Instead of tackling the evident problem, Toyota advised its customers to get rid of the mats. Further, the company provides a temporally solution to the dealers to fasten the mats to avoid disturbance of the gas pedal. In the same month, Toyota recalled 690,000 vehicles from China. This was because of the defective window switches. That was the largest recall of its products. In September 2009 Toyota brought back about 4 million vehicles in U.S. Toyota crisis caught the attention of the press in October 18, 2009. The Los Angeles Times published a story that had claims of unintended accelerators in Toyota vehicles. The newspapers claimed that the National Highway Traffic Safety Administration (NHTSA) investigations revealed that unintended accelerators had been in use for a period of two years (Guardian 2012). In the light of the warning from the problem of the mat in Toyota vehicles, Toyota Company should have taken the right measures to avert the crisis. Akio Toyoda could have set the crisis management team immediately the clients started to complain. The management team could have developed written policies on how to deal with the issue. This helps in designing proper mechanisms to use in times of crisis. The policies give a systematic procedure to deal with the crisis that is in the public domain. The policies should aim at establishing a communication plan of Toyota Company with the press and the public. The company crisis management should have responded to the issue swiftly when it hit the news headline in California. The crisis management team and the CEO should have provided the accurate and up-to-date information to the press and media. This should have been immediately when the first incident happened in California. In this era of information advancement, Toyota crisis management team should have used Websites, blogs, Podcasts, YouTube, and news conferences to communicate with the public. This should have been an effort to keep the Media updated with the explicit facts hence averting imminent speculations. This strategy of setting up the communication flows should have restored confidence in the stakeholders and the public (Smith 2011:23). After giving the facts about the problem, the company would have embarked on repairing the problem in its products immediately. It is a tangible intervention to minimise the damage that may result. The crisis management team should have monitored the news coverage. This helps in to analyse the contents of the news to uncover how the organisations crises infiltrates the press (Devlin 2006:152). This could have helped the Toyota Company take the right course in dealing with the issue. Internal Communication Internal communication plays a very important function in promoting understanding between the corporate top management team, stakeholders, and employees. The managers have to embrace strong internal communication. Any weakness internal communication spells doom to the reputation and progress of any organisation or a corporate. There should be a well reporting system in a corporate to maintain its credibility and competitive hold in ever-changing world market (Fronz 2011:28). Toyota Company should have realised that employees and stakeholders are paramount to the success of the corporate. Toyota could have given an updates of the crisis to the employees and stakeholders to avoid negative publicity. This is because lack of effective communication channels invites speculation of employees (Guffey 2009:15). Misinformed and uninformed employees spread the same information to the news press and the public in general. For instance, Toyota Company should have prevented the leaking of important contents of the company’s document. This is because there was a poor communication and relationship between the employees and the executives. The employees were kept on the dark side of the crisis welcoming assumption. Toyota CEO should have given convincing information on the tangible steps that the Company was taking to the stakeholders. This could have helped restored the stakeholders confidence in the Toyota Company. Akio Toyoda could have employed oral, written, and electronic form of communication. Oral communication could have involved face to face communication through meetings and conferences. Oral communication is effective because it minimises misunderstanding among the employees and the management. Since oral communication promotes consensus his could have helped the Company to manage its crises effectively. This mode of communication encourages employees to seek clarification of issues. Therefore, oral communication could have averted unwanted speculations ( Fronz 2011:26). Similarly, the PR could have embraced the written form of communication to reach different department in the company. The PR should have kept a constant touch with employees during the time of crisis. Written communication includes e-mails, memos, and fax. This form of communication is instant and therefore it serves many people (Curtin et al 2011:148). The Public Relations Office could have kept the stakeholders and the employees briefed with the turn of events at the Toyota Company. This could have initiated devising of sound strategy to deal with the matter internally before it spilled to the public. This would have lessened the damages that Toyota suffered. Effects of Long-Term Corporate Crisis The persistence of a corporate crisis negatively affects its reputation and success. It gives the competitors an upper-hand in ever competitive market. Reputation of a corporate matter very much. The stakeholders, public and other entities perception of an organisation or a corporate may maintain its stability or destabilise it completely. Consumers, employees, and other stakeholders lose confidence is organisation whose reputation is questionable. Reputation contributes to the success of an organisation through provision of competitive advantage (L’Etang 2007:49). Conversely, poor reputation dooms every good turn an organisation or a corporate makes. A long-term crisis of an organisation or a corporate affects its performance and progress. It affects the profits and sales of a company whose aim is to make profits. The number of customers reduces drastically because of the effects of bad reputation on the corporate brands (L’Etang 51). The fall of shares and sales of Toyota Company in the year 2010 was a demonstration the detrimental effects of a crisis to a company. In February 2010, Toyota registered a fall in the shares on Japan’s Nikkei. The shares decreased by 4.3 %. In addition, Toyota incurred a cost on its recalls that amounted to 177.5 billion Yen. Other Companies such as Chrysler, General Motors, and Ford faced as crises similar to Toyota Company. In the year 2009, Ford had to recall its 14 million vehicles. The Ford products had developed a mechanical problem in the deactivation switch. General motors also had to bring back its sold vehicle in the year 2008. The number amounted to 850,000. The other automobile company, Chrysler recalled its vehicles in December 2007 after they developed a gear problem. The total numbers of the cars was 575,000. In April 2012, General Motors announced that it will recall 500 vehicles to fix their wipers. This is in an effort to protect its reputation. Toyota incurred the largest loss of all the four automobile manufacturing company (Guardian, 2012). Bibliography Bensinger, K. and Ralph, V. 2010. Toyota response to complaints takes on a confrontational tone. Los Angeles Times. 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