Case Study

By : Mr.P.Pathmaraj

History of Toyota

• The history of Toyota started in 1933 with the company being a division of Toyoda Automatic Loom Works devoted to the production of automobiles under the direction of the founder's son, Kiichiro Toyoda.

• Kiichiro Toyoda had traveled to Europe and the United States in 1929 to investigate automobile production and had begun researching gasoline-powered engines in 1930.

• Toyoda Automatic Loom Works was encouraged to develop automobile production by the Japanese government, which needed domestic vehicle production, due to the war with China.

• In 1934, the division produced its first Type A Engine, which was used in the first Model A1 passenger car in May 1935 and the G1 truck in August 1935. Production of the Model AA passenger car started in 1936.

Kiichiro Toyoda

• Kiichiro Toyoda (June 11, 1894 – March 27, 1952) was a Japanese entrepreneur and the son of Toyoda Loom Works founder Sakichi Toyoda. His decision to take Toyoda Loom Works into automobile manufacturing would create what would eventually become Toyota Motor Corporation, the largest automobile manufacturer in the world.

2009–11 Toyota vehicle recalls

• Three separate but related recalls of automobiles by Toyota Motor Corporation occurred at the end of 2009 and start of 2010.

• Toyota initiated the recalls, the first two with the assistance of the U.S. National Highway Traffic Safety Administration (NHTSA), after reports that several vehicles experienced unintended acceleration.

• The first recall, on November 2, 2009, was to correct a possible incursion of an incorrect or out-of-place front driver's side floor mat into the foot pedal well, which can cause pedal entrapment.

• The second recall, on January 21, 2010, was begun after some crashes were shown not to have been caused by floor mat incursion. This latter defect was identified as a possible mechanical sticking of the accelerator pedal causing unintended acceleration, referred to as Sticking Accelerator Pedal by Toyota.

2009–11 Toyota vehicle recalls

• The original action was initiated by Toyota in their Defect Information Report, dated October 5, 2009, amended January 27, 2010. Following the floor mat and accelerator pedal recalls, Toyota also issued a separate recall for hybrid anti-lock brake software in February 2010.

• As of January 28, 2010, Toyota had announced recalls of approximately 5.2 million vehicles for the pedal entrapment/floor mat problem, and an additional 2.3 million vehicles for the accelerator pedal problem. Approximately 1.7 million vehicles are subject to both.

• The worldwide total number of cars recalled by Toyota stood at 9 million.

2009–11 Toyota vehicle recalls

• The original action was initiated by Toyota in their Defect Information Report, dated October 5, 2009, amended January 27, 2010. Following the floor mat and accelerator pedal recalls, Toyota also issued a separate recall for hybrid anti-lock brake software in February 2010.

• As of January 28, 2010, Toyota had announced recalls of approximately 5.2 million vehicles for the pedal entrapment/floor mat problem, and an additional 2.3 million vehicles for the accelerator pedal problem. Approximately 1.7 million vehicles are subject to both.

• The worldwide total number of cars recalled by Toyota stood at 9 million.

Question No: 01

If Toyota is not the cause of unintended acceleration, why was it blamed for it?• The Toyota Company was blamed for its unintended acceleration mainly because of

the failure of the Public relations. The reason was that the company’s public relations response to recall the problems very slow, therefore many Americans started to believe the Toyota Company was trying to hide something and cover their laws. The CEO of the Toyota Company – Akio Toyoda also didn’t make any statement about this crisis until February 5th. American Medias also blamed that the companies lack of transparency and their actions in this regards.

Question No: 01

• Another prime problem was the cultural difference between Japanese and Americans in the way of communication. In Japanese Management, when a company face a problem first they tries to sort out and solve the problem after that they inform to the media. But in American Style first they prefer answer, first then after action. Therefore when Toyota keeps silent the American consider that they are ignore them and unprofessionalism.

Question No: 02

Investigations have shown that after stories of unintended acceleration are publicized, report of incidents increase for all automobiles. Why is the case?

• Now days according the new technology the automobiles also become more technology based. The problem isn’t happen in Toyota Vehicles; similar problem happed in Audi 5000 also. According to the “pedal misapplication” the unintended acceleration happened in Audi. The drivers pressing the gas when they meant to push the break. But not all Audi brand was thoroughly trashed and the sales didn’t recover.

Question No: 02

• Due to the growing modern technology the automobiles become very sophisticated. As a result the drivers become passive, reactive and insulated by technology from any sense of control. Now this responsibility has shifted from the drivers to vehicle manufactures, therefore the automobile manufactures facing pressure to make automobiles with safe and reliable and also completely idiot – proof.

• These kind of problems nowadays become common and regular incidents in sophisticated automobiles and it is becomes as a regular problems for automakers. Perhaps it is due to driver’s error or not.

Question No: 03

Is it possible to have a strong – even arrogant – culture and still produce safe and high quality vehicles?• According to this case, we can realize the Toyota Company most likely suffers from

its arrogant culture. “Success can build a culture of arrogance that will destroy a company”. If a company goes with arrogance culture in future it may crate negative publicity according to this people may lose their trust.

• In this case the Toyota’s management never took the blame for unintended

acceleration first. There were several incidents happened about this unintended acceleration, but the management didn’t spoke to the public. They stand still on their method.

• As this arrogant culture people thought that Toyota Company trying to hide something about their fault. This arrogant culture creates negative publicity all over and create tumultuous situation for the company.

• In here finally the Toyota Company realize the problem and try to apologize to public but unfortunately to its arrogant culture it already gain huge negative publicity.

• Therefore without good and proper public communication, it is impossible for a company to produce safe and high quality vehicles in arrogant culture.

Question No: 03

Is it possible to have a strong – even arrogant – culture and still produce safe and high quality vehicles?• According to this case, we can realize the Toyota Company most likely suffers from

its arrogant culture. “Success can build a culture of arrogance that will destroy a company”. If a company goes with arrogance culture in future it may crate negative publicity according to this people may lose their trust.

• In this case the Toyota’s management never took the blame for unintended

acceleration first. There were several incidents happened about this unintended acceleration, but the management didn’t spoke to the public. They stand still on their method.

Question No: 03

• As this arrogant culture people thought that Toyota Company trying to hide something about their fault. This arrogant culture creates negative publicity all over and create tumultuous situation for the company.

• In here finally the Toyota Company realize the problem and try to apologize to public but unfortunately to its arrogant culture it already gain huge negative publicity.

• Therefore without good and proper public communication, it is impossible for a company to produce safe and high quality vehicles in arrogant culture.

Question No: 04

If you were the CEO of Toyota when the story was first publicized, how would you have reacted?

Conclusion

In 2010 the Toyota Company advertising campaign reasserting Toyota’s commitment to quality and safety. Due to Its arrogant culture it fails. After that the Toyota tries to recover the issue. So they made modifications, they create the message to consumers shows that to the Toyota Motor Corporation consider safety is priority.

After the incident the Toyota Company has developed a new “Communication Across Cultures” for their public relation executives to prevent future discord. This program will be implement each and every year and different selected representative will participate from each Toyota headquarters. This helps them to understand different culture and help them to make the business success in any different cultural situation.

Sources

How Toyota lost its Way (Alex Tailor, Senior Editor)Fortune, July 12,2010

http://archive.fortune.com/2010/07/12/news/international/toyota_recall_crisis_full_version.fortune/index.htm

Anatomy of Toyota’s Problem Pedal: Mechanic’s diary (Mike Allen)

Popular Mechanics, March 3, 2010http://www.popularmechanics.com/cars/a5016/4347704/

Behind the Troubles at Toyota (By Bill Saporito, Joseph R. Szczesny / Detroit and with Michael Schuman/Toyota City)

Time Magazine, February 11, 2010http://content.time.com/time/magazine/article/0,9171,1963744,00.html

Sources

Lahood Voices Concerns Over Toyota Culture (By Bernard Simon in Washington)Financial times, February 24,2010

http://www.ft.com/cms/s/0/11708d7c-20d7-11df-b920-00144feab49a.html#axzz4GvOooOet

Toyota Will Fix Or Replace 4 Million Gas Pedals (By Bill Vlasic And Nick Bunkley)

The New York Times November 25th , 2009http://www.nytimes.com/2009/11/26/business/26toyota.html?_r=0

Has Toyota’s Image Recovered From The Brand's Recall Crisis (Anne Marie Kelly , Contributor)

Forbes Magazine, May 3, 2012http://www.forbes.com/sites/annemariekelly/2012/03/05/has-toyotas-image-recovered-from-the-brands-recall-crisis/#70de718a43ae