Let's Call a Spade, a Spade

Can research save a company's image? There is no doubt that Toyota’s recent crisis has questioned the Japanese automaker’s reputation for building safe vehicles. It is also indisputable that Toyota has recalled approximately 9.5 million cars and trucks. However, are Toyota manufactures to blame for faulty accelerators? The evidence suggests no. According to MSNBC.com, investigators from NASA and the National Highway Traffic Safety Administration have reviewed vehicle black boxes on 58 vehicles, in which the sudden acceleration was reported. In 35 out of those 58 cases reviewed, the black boxes illustrated no brakes were applied. These black box devices track which pedals were applied and how fast the car was traveling.

Further evidence suggests that drivers in about half of those 35 cases stepped on the accelerator pedal rather hitting the brakes. Additionally, only 14 cases showed partial braking. Should Toyota be held responsible for human error? As a Toyota customer and loyalist, I say no. The company should stand by its statement: “Having conducted more than 4,000 on-site vehicle inspections, in no case have we found electronic throttle controls to be a cause of unintended acceleration.” The facts have spoken. I say, let’s call a spade a spade.

However, we cannot forget that the government has received about 3,000 complaints due to sudden acceleration and presume it could be involved in the deaths of 93 people over the last decade. Therefore, sympathy towards these people and their families must be taken into consideration. Toyota has openly admitted that improperly installed floor mats and “sticky” pedals as contributors to unintended acceleration accidents. Yet, what the American people were looking for was a sincere apology and they did receive that from CEO Akio Toyoda.

This is where our two worlds divide, both geographically and culturally. In the United States, we celebrate self-proclaimed, business people, like Bill Gates and Steve Jobs. Additionally, being open and honest in all facets of interaction is very much an American concept. Contrarily, in Japan to be a successful corporate leader one should remain virtually nonexistent to the public eye, while his organization thrives. Saving face and allowing others to maintain their dignity, even when they may be wrong, ensures that all parties feel respected. Therefore, openly admitting a mistake or forcing another to do so, brings embarrassment and dishonor in this culture.

Working internationally poses many difficulties in the business world, like this minor cultural error. After some media training, Akio Toyoda accepted responsibility and even shed a few tears in front of Congress. Although this does not make up for the loss of life, Toyota is genuinely trying to do the right thing.

Talk to you soon!!

Today Will Be Tomorrow's Past

In addition to researching its publics, a good public relations practitioner will scan the environment for potential crises. In the chance that a crisis does occur, the practitioner must immediately engage in risk management.

Risk management is essentially the identification, assessment and prioritization of risks. These risks can occur from ambiguity in financial markets, product failures, legal liabilities, accidents, and natural disasters. The public relations practitioner must monitor and control the probability and/or impact of such unfortunate events.

However, Toyota’s public relations team neglected to engage in risk management. The company’s unsought acceleration nightmare mirrored Audi’s similar dilemma some years prior. In the early 80s, Audi was a forthcoming luxury auto brand in the United States until a “sudden acceleration” recall related to 6 deaths and 700 accidents put a screeching halt in the company’s sales. Over the next 5 years, Audi sales dropped 83% and it would take the company 15 years to rebuild their brand image and pre-recall sales (read more about Audi's sudden acceleration crisis here).

If Toyota had done its research on the Audi crisis, they would have been aware of its long-lasting impact on the company and developed their own crisis management plan. Essentially, Toyota could have walked away from its recent crisis without a scratch.

“There is only one thing more painful than learning from experience and that is not learning from experience.” -Archibald MacLeish

Thought I'd leave you with a laugh!!!

Communication is a Two-Way Street

Research is more than just gathering information. Public relations practitioners use research in a multitude of ways. Focus groups, surveys, secondary research, content analysis and in-depth interviews are all second nature to the practitioner. Each of these tools provides a company with important information used to raise awareness or shape public opinion.

Research is also an important part of maintaining long-term customers, as well as, gaining new ones. Keep in mind that long-term customers tend to spread opinions about a company much quicker than public relations can reach its publics. Therefore, having a free flow of accurate and truthful information with your customers is the best way to nip gossip in the bud.

During Toyota’s “faulty accelerator” crisis, the company faced public scrutiny from the media and disgruntled customers. Toyota responded by saying that, “Nothing is more important to Toyota than doing the right thing for our customers -- and restoring their confidence in the safety of our vehicles...(to read more click here)” The company verified this statement by listening and responding to public feedback.

In public relations we call this two-way symmetrical communications. Practitioners use two-way symmetrical communications to resolve conflict, promote mutual understanding and respect between the company and its publics.

In January of 2010, Toyota used its corporate website to convey its message about its "faulty accelerator" issue:"Toyota has taken the unprecedented step of stopping production to help serve our customers quickly and ensure that all new Toyota vehicles going forward do not experience this problem."

Toyota still provides links titled “FAQs” and “What We’re Doing” in order to accommodate customers. In addition, Toyota uses social media outlets Facebook and Twitter to informally address customer concerns.

It is obvious that Toyota did a great job relaying information to customers in a timely manner and allowed for open communication. Now Toyota has to focus on rebuilding it's brand image.

Till we meet again!!

Introduction

I love my Rav4. Yet, the recent humiliation about Toyota’s faulty accelerators has me question my safety, as I cruise around in my fashionable, 4-door SUV.

Toyota is highly regarded as a leader in the automotive industry. Because Toyota is an industry leader, the company is held at much higher standards than most car manufacturers. With that said, Toyota’s latest "faulty accelerator" crisis has not only hindered the company’s profits, but Toyota’s reputation too.

According to the company’s website, Toyota is always willing to lend a philanthropic hand to neighboring communities. In addition, the company is very environmentally aware and constantly exceeding industry standards. The Toyota way is cleaner, greener and full of innovation.

However, Toyota’s good values and environmental friendly behavior could not prevent the company’s annual sales from plummeting. This past August, Toyota announced that sales were down approximately 34% since last year (read more here).

The skeptical voice inside me questions what or who is to blame for Toyota’s financial deficit and tarnished image. Faulty accelerators? Toyota’s CEO Akio Toyoda? Or doubtful customers? Furthermore, I wonder if Toyota is exemplifying its motto “moving forward” in order to piece back together its once reliable reputation.

Throughout this semester I will be looking at Toyota’s company values, decision making skills and crisis management tactics, through a quantitative and qualitative lens. I will also take a deeper look into the company’s ethics and values. To better understand Toyota’s current crisis situation, I will look at the company’s financial and reputational status within the automotive industry at the macro level. Additionally, it will be important to consider international relations, as Toyota is a Japanese company manufacturing in the United States.

Until next time...