In a recent discussion, I highlighted some of the underlying factors which contributed to the recent debacle surrounding Toyota and problems relating to unintended acceleration in some of its vehicles.
Today, I would like to focus on the company’s response – where it was lacking and why.
A tardy response
Toyota’s corporate response to the crisis fell short in three key areas:
1) Belated nature of apology.
Given the dates of the first two recalls (November 2, 2009 and January 27, 2010 – refer Wikipedia), consumers have every reason to wonder why they had to wait until February 5 this year to receive an apology.
This delay was unacceptable, and served as a clear indication of just how far behind the eight ball management was on this issue.
2) Mixed signals.
In September last year, the public were told that the problem related to floor mats, and that 3.8 million vehicles would be affected.
Then, on January 21, it was the sticky pedals – an embarrassing admission (which came only after it was proven that some crashes weren’t caused by floor mats) given previous denials that mechanical problems had anything to do with it. This affected an extra 2.3 million vehicles in the U.S. (The next day, a further 1.8 million vehicles were recalled in Europe and 75,000 in China – refer Wikipedia).
Finally, as a separate issue, consumers were told on February 09 about problems with the anti-lock braking system in the Prius hybrid model – apparently the result of a software glitch.
The inconsistent nature of these signals does not inspire confidence on the part of consumers or the general public.
3) How far back does it go?
But worst of all are lingering questions about how far back the problems go, what the company knew and why action wasn’t taken sooner.
According to FairWarning, Toyota noticed sticky pedal problems in August last year – months before the recalls. Worse, though they have continually denied problems in this area through eight separate investigations, a CBS News report indicates that the company was aware of electronic problems causing some cars to ‘surge’ unexpectedly as far back as 2005. And finally, according to Wikipedia, there have been 21 deaths believed to be associated with the pedal problem since 2000.
Why, the public asks, is action being taken only now?
Why the poor response?
The reasons behind the deficiency of the response have been the subject of a significant degree of media discussion in recent months.
No doubt a range of factors were at play:
• Human error.
First and foremost, let’s not forget the role of basic human fallibility in all of this.
Belated as the response was, any ideas about foul intentions or the deliberate placing of driver safety in jeopardy are not credible. Instead, Toyota simply failed to grasp the significance of the problem – a basic error of judgment.
Toyota is not the first company to suffer from misjudgment of these proportions – nor will they be the last.
• Expectations and pressure.
Notwithstanding the above point, the momentum associated with expansion of the magnitude which the company experienced over the past decade (it replaced GM as the world’s top selling automaker in 2008) created a great deal of expectation regarding continued growth in sales volume.
The resulting pressure undoubtedly made it difficult to be open with the general public about safety issues and mechanical problems, less an overly candid approach in this regard jeopardise sales momentum.
• PR Strategy.
Another factor, according to PR Week, may be a general lack of awareness on the part of many Japanese firms, including Toyota, about the whole concept public relations.
I don’t think this is particularly significant. Whilst it is true that the company’s handling of this whole affair has been less than exemplary, any problems relating to PR management are merely scratching the surface.
The real issues and underlying problems go deeper – much, much deeper.
• Cultural issues
As they did with the cause of the problems (refer previous discussion), cultural issues no doubt played a part in the company’s poor response.
Traditional Japanese culture places a lot of emphasis on the concept of ‘face’, whereby any loss of public face strikes at the heart one’s identity and must be avoided at all costs, especially for those in a position of seniority or authority. For senior management of such a revered organisation, the embarrassment associated with public acknowledgement of mistakes or problems of this magnitude (which would be bad enough for anyone) cannot be underestimated.
Reluctance to speak openly about these kinds of problems extends to middle and lower level employees as well – lest they cause embarrassment to their seniors (not to mention their corporate identity, to which their own personal identity is so closely tied).
Moreover, deep down, it may have been difficult for Toyota management to acknowledge that they really had a problem. Problems associated with denial in this regard are not limited to Toyota or Japan in particular, but the Japanese do seem to experience a particular degree of difficulty in this regard.
Perhaps this is partly a function of the Japanese obsession with craftsmanship and quality (and the subsequent embarrassment when things are not up to scratch). Or possibly it could spring from their drive to avoid confrontational situations – with a resulting temptation for uncomfortable matters to be swept under the carpet.
Whatever the reason, this sense of deep-down denial could well go some way toward explaining why Toyota management failed to grasp the magnitude of the situation.
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