How Bridgestone Handled the 2000 Tyre Crisis - Coursework Example

Management Communication: How Bridgestone/Firestone Handled the 2000 Tyre Crisis Introduction This essay is about corporate crisis communication. The essay is based on an incident that occurred back in 2000. Bridgestone, a then famous manufacturer of car tyres, was forced to recall millions of its various brands of tyres after reports to the effect that a fault in the company’s tyres had been causing road accidents started to emerge. At first, the company denied the allegations and was hesitant to recall the tyres. However, growing pressure from the public and authorities forced the company to issue a recall of the affected tyres. In the essay, a brief examination of the way the company responded to the crisis is presented. This is followed by a detailed analysis of the positive and negative aspects of the way the company responded to the crisis, based on theories of corporate communication practice. The Firestone/Bridgestone 2000 Tyre Crisis The Bridgestone/Firestone tyre crisis is said to have started back in 1998 when users of Ford vehicles started complaining that some tyres fitted on the cars were causing problems to motorists (Arney 2000). The brands of Ford vehicles in question were those that used tyres manufactured by Bridgestone. Formal investigations that followed showed that the tyres that were causing accidents on Ford vehicles were ATX, ATXII and Wilderness AT (CNN Money 2000). Further investigations showed that these brands of tyres had problems in the configuration of their treads and that the treads were peeling off soon after the tyres had been in use for some time (CNN Money 2000). A further investigation by the National Highway Traffic Safety Administration (NHTSA) laid the blame on the design of the tyres (Arney 2000). At first, Bridgestone was reluctant to accept that its brands of tyres had flaws and that the flaws were causing accidents (Schubert 2011, p. 4). However, growing public pressure, compounded with pressure from the authorities, increased tremendously between 1999 and early 2000. On 9th May 2000, Bridgestone issued a statement in which it said that it was recalling 6.5 million tyres that it had already released to the market (Schubert 2011, p. 2). The company acknowledged that investigations had indicated that its affected brands of tyres had flaws in their treads and that the flaws were causing accidents to motorists. Although the actual cost of the recall was not disclosed at the time, it is estimated that the company lost millions of US dollars because of the process (CNN Money 2000). Also, the company suffered a considerable degree or reputation damage because of the way it had handled the issue before making the recall. At first, the company had refused to acknowledge that the problem existed. Also, the company took a long time to realise that it was in the middle of a crisis and that it needed to take the necessary measures to address the situation. How the Company Responded to the Crisis The response of Bridgestone to the crisis can be summarised as follows. First, the company attempted to ignore all the early complaints about its tyres (Schubert 2011, p. 3). This response characterised the stance of the company between 1998 when complaints about possible faults in its tyres first emerged and early 2000 when the company fully acknowledged that some of its tyres were faulty. Bridgestone’s initial stance can be attributed to the fact that at first when some motorists and pressure groups started raising complaints to the effect that some tyres were contributing to auto accidents, it was Ford, the car maker, that faced the pressure (Arney 2000). Therefore, Bridgestone managed to ignore the complaints at first because it felt that it was unlikely that its tyres were causing the problem. The second response of the company can be traced to the way the company assessed the situation and issued the recall. The company received the findings of a study by Ford and the NHTSA that clearly linked some tyres manufactured by the company to the problem. Immediately the company received the findings of the report, it conducted a detailed analysis that showed that some of its tyres, ATX, ATXII and Wilderness AT, had treading problems and that the treading problem had been the cause of the accidents that some motorists had complained about. It was based on these findings that the company immediately issued a recall of 6.5 million of the tyres that were already in use at the time (CNN Money 2000). The third aspect of the way the company responded to the crisis relates to how it managed the recall. The company started running a detailed public awareness campaign that sought to help motorists determine whether they had to return their tyres (Corona & Komendanchik 2008, p. 3). The company also focused on ensuring that all the concerns of the motorists, the authorities and the public were fully handled during and after the recall. Analysis of the Response of the Company The way Bridgestone/Firestone handled the crisis can be analysed using various theories on how companies should communicate when they are managing a crisis. Also, the analysis can be done by examining the areas in which the company excelled while communicating during the situation and those in which it failed regarding communication prior to, during and after the actual incident. Areas of failure in the response There are several things regarding crisis communication that the company got wrong prior to, during and even after the incident. The most important one regards timeliness. In theory, timeliness refers to the time that a company takes to officially respond to a situation after it receives early warnings that a situation is not in order (Doorley & Garcia 2015, p. 229). It is pointed out that timeliness is one of the greatest determinants of how successful a company is in reducing the impact of a crisis and minimising the damage that the crisis may have on its operations, finances and reputation (Doorley & Garcia 2015, p. 230). It is important to point out that Bridgestone/Firestone failed to act immediately it received early warnings indicating that something was wrong with their tyres. The company chose to ignore the early warning signals. By far, the failure by the company to take the early warnings seriously and act on them the moment they first surfaced contributed to the final severity of the crisis (Corona & Komendanchik 2008, p. 3). Therefore, the company failed to respond to the crisis in time to prevent the situation from getting out of hand completely. Apart from timeliness, the company failed by first denying any possible existence of the problem and later insisting that it was not aware of the problem in the first place. In theory, companies are supposed to exercise the highest level of sincerity when they communicate their response to a crisis (Coombs 2007). Accuracy refers to how a company communicates information about the crisis to its publics (Coombs 2007). It is expected that a company has the capacity to not only collect accurate information about a situation but also uses the collected information to paint an accurate picture of the situation that it is trying to handle (Szczepanik 2003, p. 28). In other words, a company should not only be accurate but also consistent in the way it communicates while handling a crisis. In the case of Bridgestone/Firestone, the company arguably failed to be accurate and consistent when communicating to the public about the crisis. For example, it has been repeatedly pointed out that the managers of the company insisted that they did not have prior knowledge that some brands of tyres of the company were faulty yet credible information indicates that the managers knew about the problem before 2000 (Hearit 2006, p. 139). It has been pointed out that the managers of the company knew that some brands of tyres of the company were faulty but chose not to address the situation because of the possible financial implications that such an investigation would have cost the company at the time (Hearit 2006, p. 139). From the foregoing, Bridgestone/Firestone failed in three main ways while handling the crisis. First, the managers of the company were not factual while communicating details of the crisis to the public and the authorities. By alleging that they did not have prior knowledge of the problems associated with some tyres of the company, the managers were lying. Secondly, the company delayed responding to the early warning signs of the then impending crisis when it first got reports that some of its tyres had been blamed for road crashes. Thirdly, the company failed by first denying that there was any problem with its tyres before finally relenting and accepting that indeed, some of its tyres were faulty. Positive aspects of the response It is important to note that there are other aspects of corporate crisis communication that Bridgestone/Firestone excelled in while handling the crisis. For example, the company effectively managed the recovery phase of the crisis. In theory, the essence of corporate crisis communication is to help a company successfully recover from the crisis at hand (Haddow & Haddow 2013, p. 113). During the recovery phase of the crisis, companies can focus on restoring their operations as well as reputation to their earlier levels. It is also during this stage that companies can re-examine the incident in detail and draw lessons from the crisis (Haddow & Haddow 2013, p. 113). It can be argued that Bridgestone/Firestone managed the recovery phase well. Immediately the company started the recall process, it launched another programme that was meant to help the motorists who had been affected by the crisis as well as inform the public on what had happened (Arney 2000). The company excelled in the way it provided detailed information about the crisis during implementing the recall. Therefore, when viewed from this perspective, the company managed the recovery phase of the crisis effectively by providing support systems to the motorists who had been affected by the crisis. The second aspect of corporate crisis communication that the company handled well relates to how companies are supposed to address the needs of their various stakeholders during a crisis. The need for companies to address the information needs of their various stakeholders in times of crises arises from the stakeholder theory of the firm. According to the stakeholder theory of the firm, a firm is an entity that is supposed to serve the interests of various groups of persons or institutions referred to as stakeholders (Valackiene 2010, p. 101). In general, the stakeholders of a firm are parties or institutions that are not only affected by the activities of the firm but also whose activities have an impact on the activities of the firm (Valackiene 2010, p. 101). In other words, stakeholders have vested interests in the goings-on within organisations. There are various stakeholders including the customers, regulatory authorities, the employees and the public. All these groups of individuals have a stake in any company. It follows that during a crisis, a firm should address the concerns of all its stakeholder (Valackiene 2010, p. 101). This means that a firm should communicate to all its stakeholders as part of managing the crisis at hand. It can be argued that Bridgestone/Firestone succeeded in addressing the information needs of its various stakeholders during the crisis. The moment the company acknowledged that it was facing a crisis, it engaged all its stakeholders in the process of managing the crisis by providing detailed information to them. For example, it effectively communicated to its customers and the public about the crisis and what it was doing to contain the situation (CNN Money 2000). Also, the company communicated to the authorities what it was doing to get a permanent solution to the problem (Arney 2000). The company also communicated to its employees at its factories about the situation and what it was doing to remedy the problem (Arney 2000). By doing so, the company effectively engaged all its stakeholders while managing the crisis and provided the information that the different stakeholders required at the time. Conclusion The Bridgestone/Firestone tyre recall incident of 2000 was occasioned by a formal report by the NHTSA which pinpointed faults in the design of some of the tyres of the company as the cause of road crashes that had been reported earlier. While managing the crisis, the company excelled in providing adequate information to its stakeholders and effectively managing the recovery phase of the process. However, these positive aspects only came after the company had failed to respond to early warnings of the crisis and its managers had provided misleading information by first denying that the problem existed in the first place. References Arney, J 2000. ‘Ford, Firestone in a PR freefall,’ The Baltimore Sun, 17 September, viewed 8 May 2017, . CNN Money 2000, ‘Firestone tyres recalled,’ viewed 8 May 2017, . Coombs, WT 2007, ‘Crisis management and communications,’ Institute for Public Relations, 30 October, viewed 8 May 2017, . Corona, DL & Komendanchik, ME 2008, ‘Bridgestone/Firestone recall: a case study in public relations,’ Louisiana State University Research Papers, viewed 8 May 2017, . Doorley, J & Garcia, HF 2015, Reputation management: the key to successful public relations and corporate communication, Routledge, London. Haddow, G & Haddow, KS 2013, Disaster communication in a changing media world, Butterworth-Heinemann, London. Hearit, KM 2006, Crisis management by apology: corporate response to allegations of wrongdoing, Routledge, London. Schubert, D 2011, ‘Firestone’s Tyre recall,’ Daniels Fund Ethics Initiative, 2011, viewed 8 May 2016, . Szczepanik, KA 2003, Importance of crisis communication: What lessons did we learn from Tylenol and Exxon? (Master’s thesis), Ohio University, Athens, OH, Ohio, viewed 8 May 2017, . Valackiene, A 2010, ‘Efficient corporate communication: decisions in crisis management,’ Engineering Economics, vol. 21, no. 1, pp. 99-110. Read More