Analysis of Toyota Communication - Case Study Example

Toyota Recall Name Class Unit Introduction Since late 2009, Toyota has experienced several incidences of mass car recalls. The most severe crisis was in 2010 where more than 9 million vehicles were recalled after 2009 fatal crash in USA (Victor L. H., & John R. D., 2012. Toyota has been able to gain success in the automotive market due to their reputation of high quality cars. Once the crisis struck, the company previous good reputation was threatened. The company brand image which had taken centuries to build was at stake (Dawar & Lei, 2009). Safety recalls are an occurrence in the automotive market and the way they are handled have a great impact on the industry. The sequential occurrence of the incidences of vehicle recalls at Toyota is a major problem to its quality brand. Toyota has been known to be manufacturer of high quality vehicles and recent safety recalls of their vehicles is a major threat. As Toyota faced the safety recall crisis, they used crisis communication with an aim of saving their brand image. This essay will look at Toyota communication as they handled mass car recall crisis with most emphasis on 2010 incident. In 2009, a major incident occurred when a Toyota Lexus was involved in a fatal crash and led to death of four family members (Los Angeles Times, 2009). The fatal crash was highly publicised and it was later identified that Toyota vehicles had an acceleration problem. This was the beginning of the company mass recall problems. In 2010, Toyota recalled 9 million vehicles on their website due to acceleration problems (Stewart, 2010). The company made their first mistake due to delayed response to the crisis. The company action after the crisis led to more suspicion. The official communication given appeared defensive. This has led to the company losing their market share while rivals are catching up. In 2012, Toyota recalled 7.43 million vehicles globally due to power window problem that could lead to fire risk. The automotive manufacturer had to recall 2.5 million vehicles in United States, 1.4 million vehicles in Europe and China, 500,000 in Middle East 450,000 in Japan and 650,000 in Australia (Charles, 2012). This made the recall a global problem due to its span. Toyota took to crisis management through communication especially in the countries affected. Internet and media have been a major threat to organisation reputation when faced with a scandal. When a scandal arises, a lot of stakeholders are affected. Stakeholders learn about the crisis through media and internet. The main issue arises due to fact that journalists may sensationalise a story with an aim of attracting more readers (Victor & John, 2012). This was seen in the case of Toyota recalls. The incident made headlines with claims that the automaker had been compromising quality at the expense of mass production. The first step that Toyota did was identifying the issues that were leading to reputational risks and how to resolve them (Victor & John, 2012). Toyota apologies were too late and occurred only after much blame by mass media and authorities. The communication given by the company public relations stated that the recall was voluntary and was just a safety precaution. Later, the company US president apologized and admitted that the company was embarrassed by the recalls as they dented their image and reputation on vehicle safety (Victor & John, 2012). Despite the apologies and recalls, the incidents continued to happen among other vehicles manufactured by the company. This led to stakeholders suspecting that Toyota had more issues they were not addressing. The incidence forced the company CEO Akio Toyoda to give a public apology through a press release and a video (Reuters, 2010). In the video, he was remorseful as he made the apology. He promised all stakeholders that he would lead a safety task force with an aim of improving their vehicles quality. He also asserted that Toyota was to put customer first in their design (Reuters, 2010). The company response to crisis was poor which have led to long term damage to their reputation (Greyser, 2009). The company responded to the negative incidents by claiming their innocence and that they were addressing the potential issues. All communication given by its management were aimed at winning the customer back. The company utilised different channels of communication both online and offline. The main problem was due to fact that they acted late and in most cases, they did not own up (Hearit, 2006). The poor handling of crisis led to the company paying compensation of $16.4 million which was imposed as a civil penalty. Toyota slow response to crisis had been a major setback to restoring their image. The first fatal accident happened in 2009 but Toyota broke silence in 2010 on the matter. Despite the fact that Toyota made efforts to address the issue through communication later, the public gained notion that Toyota ignored the matter (Los Angeles Times, 2009). When a crisis occurs, instant response is always needed. This helps to show that there is commitment. Lack of communication led to the company being seen as lacking transparency. There was need for prompt and sincere communication once the first incident happened. The most effective crisis communication takes place before the problem has escalated (Coombs & Holladay, 2002). Starting when the crisis starts, every action done by the organisation is form of crisis management. A good crisis communication starts with collecting signals and warning and ensuring that there are adequate people who can handle the crisis (De Blasio & Veale, 2009). All information collected during crisis has to be analysed in order to come up with chosen messages to stakeholders (Coombs & Holladay, 2006). This did not happen in the case of Toyota. Crisis communication was not planned and occurred only after the company was forced by circumstances. Initial response by Toyota was use of image restoration strategies. This included bolstering, use of corrective action and minimising the damage (Watson, 2007). This was seen in their initial communication where the company reminded stakeholders that they had been manufacturing high quality cars for decades and the single incident was not supposed to make them lose confidence. The company then made their communication to focus on their confidence in themselves. Through this, they wanted their consumers to have the same level of confidence. The company became more active in publicly managing the crisis. They made an apology in their website and made reference to their superior technology (Victor & John, 2012). The apology made by Toyota was seen by many as masked. The company had remained quiet until they reached a point that they were compelled to apologize. When apologizing, the company failed to give a direct apology (De Blasio & Veale, 2009). The company apologized for the issues that arose from the crisis but failed to take blame in them. The company used apologetic words to show regret and remorsefulness on the recalls but not on the effects of the crisis such as the accident. The company communication seemed to ignore the crisis and focused mostly on the company past performance. The company was seen by many to have started an apology which they never finished (Stewart, 2010). The apology made by the company president was also not full. He accepted responsibility for the crisis but only focused on the lost consumer confidence. The apologies never fully focused on the lost lives which occurred due to the company vehicle problems (Reuters, 2010). In their communication, the management apologised for the families but did not take full responsibility. The press release by the company showed a united front. The company used the previous statements they had made on the crisis and stood together. The statements made which were mainly assuring safety of Toyota vehicles and their reliability. This was a bolstering strategy which was meant to enhance the company positive aspects (Timothy & Matthew, 2013). Executive Vice president of Toyota stated that, “we are redoubling our commitment to always put our customers-and their safety- first”. The main aim of this communication was to eliminate negative feelings towards the company on the crisis. As the company offered masked apologies, there main focus in crisis communication was company superior technology. The company shifted major discussions on their superior technology. The company aimed at restoring consumer confidence through communication (Coombs & Holladay, 2006). The company managed this by showing their customers that they had a superior technology and believed in it. The company initiated talks with customers and assuring them that if they were not having any issues with their pedals, the vehicles were safe to drive (Rouse, 2010). In the last phases of crisis management, Toyota became increasingly defensive. The company started back lashing at media and other stakeholders who were involved in the incident. One of the incidents was seen when Professor Gilbert of South Illinois University gave a testimony at Congressional hearings. He gave explanations on Toyota acceleration problem which was later aired at NBC. Toyota became defensive on the issue. Instead of proving Gilbert report wrong, the company continued stating he was wrong. The company was seen to backlash at the report without giving proof on its errors. Toyota started responding to news media coverage in a defensive manner. The company even attacked NHTSA on the matter claiming that their accident database was not specific (Victor & John, 2012). In their recent recalls, Toyota has been able to improve significantly on crisis communication. They are always fast and act before any accident happens. Through communicating in their website and press releases, the company is able to reach stakeholders fast enough. This was seen in their 2012 recall which was reported and acted on promptly. Prompt communication was a key crisis communication aspect that lacked in their first recall. The second recall did not receive much negative publicity as the first one since the company communicated in time. The instant communication also ensured that there was no any casualty from the incident as it was the case in 2010 (Victor & John, 2012). Crisis communication ensures that there is responsibility and accountability (Timothy & Matthew, 2013). Toyota was blamed for their low response in crisis communication in their first incident. Giving reliable and open communication is needed when unexpected crisis strikes (Fortunato, 2008). Toyota was supposed to have dealt with the first crisis in a way that would have assured customers they were safe from any crisis. Toyota was able to learn on their weakness in crisis communication. This has been seen in the way they handled 2012 recall (Charles, 2012). They were able to ignore the negative aspects brought about by the crisis and focus on the positive aspects. The company have taken up active crisis communication strategies which have enabled them to recover consumer trust. They have learned the importance of prompt and transparent communication. Conclusion Toyota have been facing incident of vehicle recall with the major recent incident occurring in 2012. In 2012, the company recalled 7.43 million vehicles in different parts globally. Though vehicle recalls is normal in the industry, mass recall and reoccurrence is an incident that threat business image. Toyota had their first mass recall in 2010 after a fatal accident. Through use of communication, Toyota has worked hard in ensuring that they maintain their image. Their communication after 2010 incident was poor and occurred late. This made consumers suspicious and the apology was viewed by some as masked. The company did not take full responsibility. Despite this, the company was able to learn from the incident. This is seen in their response to 2012 mass recall. In this case, the company communicated promptly and in a transparent manner. They made press releases and offered apology to those affected. The second incident did not receive a lot of negative publicity. This is a proof of the importance of good crisis communication. 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