SUBJECT: BUSINESS COMMUNICATION AND GLOBAL ETHICS
MID TERM PAPER
A.
Issue
Identification
Toyota
is a brand owned by Toyota Motor Corporation, a world known Japanese automotive
manufacturer headquartered in Tokyo, Japan. For more than 75 years Toyota has
contributed to a more prosperous society through the manufacture industry of
automobiles. It is mainly engaged in automobile business with three main
business activities; designing, manufacturing, as well as selling the vehicle
products, related parts, and accessories.
As
mentioned on the official website, http://www.toyota-global.com/, at
the end of 2013, Toyota conducts its business worldwide with 52 overseas
manufacturing companies in 27 countries and regions. Toyota's vehicles are sold
in more than 160 countries and regions.
Figure 1. Map of Toyota’s worldwide
manufacturing companies
Over
the last few years Toyota is facing the biggest quality issue of recalling its vehicles including
those intended for sale or already sold in many countries all over the world.
Some Toyota vehicles were having problems with faulty conditioning system,
disabled airbags, sticky accelerator pedals, detachment of spare tires, and
steering gear problem which may cause accidents. These problems were found in
Toyota’s favorite brands such as Lexus, Camry, Prius and many more.
The problem started back in 2009 when it recalled
3.8 million US vehicles because of floor mat problems which could cause the
accelerator to get stuck. After that, Toyota keeps on recalling its products
every year up to now for various technical and safety reasons. As reported by http://www.theguardian.com
(2014), the last one happened on October 20, 2014 where Toyota recalled 247.000
vehicles in USA over defective airbags.
Not only in USA, the case is also found
in some other countries like China, Japan, Canada, UK, and many more. As shown
in an article on http://www.theguardian.com/
there are total of 8,54 million vehicles being recalled worldwide.
Figure 2. Toyota recalls around the world
Mass media immidiately covers this issue, and just like a
snowball effect negative statements about Toyota being made in the society.
B. Effects of the Issue
This issue is surely damageing Toyota’s corporate
reputation for it has strained the trust of public, car buyers, and regulators.
According to Michael Wells and Deepti Ammanath (2010) on their article which
was published on http://www.polk.com, from November 2009 to February 2010, Toyota customers’
loyalty dropped 11 percentage points – from 59.4 to 48.4.
Over the years Toyota has been managing a well deserved
reputation for building loyalty of the customers. This issue had
strike its reputation in terms of product quality which may be a great loss for Toyota
globally, and at some points be
an advantage for its competitors like Honda, Chrysler, and other automotive
manufacturers.
Not only that the reputation got hit badly, Toyota stands
to lose billion dollars for the repairing process of the recalled vehicles and
the sales numbers which has significantly dropped.
Toyota is not the only business that suffers, other major
businesses also experience great loss as this issue affecting them as well. All
Toyota dealerships accross the globe are directly affected with the brand being flawed.
The accessories and spare parts suppliers of Toyota vehicles inevitably got hit
financially as the order of Toyota’s vehicles are going down. This recall is also
giving problem to online car businesses like LeaseTrader.com. As mentioned on http://www.entrepreneur.com LeaseTrader.com have received calls from people who were
going to take over their Toyota lease.
C. How Toyota Handle the Issue
In
order to respond to this issue, Toyota has conducted several communication
efforts to its customers, such as:
1. Toyota
has taken proactive approach to make announcements about the recalls on its
official website http://toyotanews.pressroom.toyota.com/ in
which;
a. keeping
the customers update with numbers of certain types of cars which will be
recalled within a specific amount of time,
b. informing
the customers in details about what Toyota will do to their cars and that all
services made for the remedy will be free of charge,
c. creating
frequently asked questions (FAQ) page on their website, and
d. providing
the customer service contacts.
2. Aside
than providing updated information on the website, Toyota also sends
notification letters to their customers informing the recalls, and making sure that
they are really sorry for misleading the customers.
3. Not
only approaching their customers, Toyota also distribute information to their
dealers and associates in order to answer questions from customers and share
detailed information in a public way.
Quoting Ron Kirkpatrick, Toyota’s National
Manager of Executive, Internal and Social Media Communications, on an article
entitled ‘How Toyota executes a well-driven strategy to recover from a crisis’ which
was posted on http://www.simply-communicate.com/,
Toyota has created what they call ‘Fast Facts’ – a one-page summary
delivered via email. Introduced in early 2010, the channel consisted of two to
three stories with snappy headlines and three to four essential points for
dealers and associates to communicate to family, friends and Toyota customers
about Toyota-related issues or controversies in the news. Below is the view of
the website.
Figure 3. Toyota ‘Fast Facts’
“The idea is that associates would hopefully
see the news from us first, before hearing it from a news outlet. We often stay
up late or into the early morning to coordinate with Japan announcements,”
Kirkpatrick explains.
4. As
mentioned on an internet article posted on http://www.scpr.org
written by Kisher, Tom (2014), Toyota also provides free driving service for
those who are afraid driving their cars to their dealer for the repair. This
service will be helpful to many of the customers, especially those who live
outside the recall zone.
5. Toyota
changed its motto from “I Love What You
Do For Me, Toyota!” to “Moving
Forward!” this is to attempt to communicate to customers that Toyota has
desire to start afresh and look toward a better future.
D. Recommendation
Ever
since Toyota’s recall of vehicles issue reach the public, the company has been
trying to recover its brand equity and rebuild consumer trust. Some efforts
that are considered as the best practices are explained below.
The
first one which attracts my attention is that Toyota has proven its goodwill by
fully admitting the wrong doing which has misled the customers. This could be
considered as a corporate advocacy (Crable & Vibbert, 1985) to prevent
misinformation and clarify the facts to its public. Furthermore, Toyota is
willing to pay back the customers’ loss. Toyota has pointed out that cars are
very complex and that recalls are a part of the automotive business. Most
consumers understand that things can go wrong with automotive products. They
want to be assured that Toyota will be open about the issue and take full
responsibility for fixing it.
The second one is that Toyota uses notification letters
to their customers, which in my opinion is the right thing to do. According to
Bovee and Thill (2012) on their book Business Communication Today, written
medium of communication have a number of advantages over oral media, among
others: allow us to plan and control the message, reach geographically
dispersed audiences, and minimize the distortion that can result with oral and
some forms of electronic messages.
Toyota
has done numbers of communication efforts in responding to the issue, but still
has many miles to travel before they can regain its popularity. I recommend
Toyota to remind its public about the positive aspects or acts that have been
conducted in the previous time. It will help an organization to pass the
management crisis with a positive reputation. They could use new advertisements
that bring back their past-positive-performance in their new technology and
product.
Communication
efforts may be costly and time consuming. The bigger the issue, the greater
effort should be taken to overcome it. As Toyota’s case considered as a big
issue, the consequences is that it has to invest big amount of money to keep on
communicating with its public.
Toyota
also has to be more creative in term of creating activities or programs which
include the customers. Basically they need to do whatever it takes to please
the customers, for example by providing free insurance, or promoting a touring
activity, providing test drive for prospective customers, and many more. Make
sure that the media are being invited to those events.
References
Bovee,
Courtland L & Thill, John V. (2012). Business
Communication Today. USA: Prentice Hall
Browning,
Roger. (2010, February 9). Toyota recalls
across the world: full list so far. Retrieved from
http://www.theguardian.com/news/datablog/2010/feb/09/toyota-recalls-full-list#data
Institute for Public Relations. (2011, September). The Toyota recall crisis: Media impact
on Toyota’s corporate brand reputation. Retrieved from
http://www.instituteforpr.org/wp-content/uploads/JFGRA-InfoTrend-case-study-ver-2.pdf
Kass,
Kelly. How Toyota executes a well-driven
strategy to recover from a crisis. Retrieved form http://www.simply-communicate.com/case-studies/company-profile/how-toyota-executes-well-driven-strategy-recover-crisis
Kelly,
Anne Marie. (2012, May 3). Has Toyota's
Image Recovered From The Brand's Recall Crisis? Retrieved from
http://www.forbes.com/sites/annemariekelly/2012/03/05/has-toyotas-image-recovered-from-the-brands-recall-crisis/
Kisher,
Tom. (2014, October 21). Recall: US
agency warns car owners to get air bags fixed. Retrieved from
http://www.scpr.org/news/2014/10/20/47512/recall-us-agency-warns-car-owners-to-get-air-bags/
Lienert,
Anita. (2013, October 17). Toyota Recalls
803,000 Vehicles in the U.S., Including 2012-'13 Camry. Retrieved from
http://www.edmunds.com/car-news/toyota-recalls-803000-vehicles-in-the-us-including-2012-13-camry.html
Nbcnews.com.
Toyota Recall Timeline. Retrieved
from http://www.nbcnews.com/id/35240466/ns/business-autos/t/toyota-recall-timeline/#.VFUlwDSUfng
Riley,
Charles. (2012, October 10). Toyota
recalls 7.43 million cars. Retrieved from
http://money.cnn.com/2012/10/10/investing/toyota-recall/
Theguardian.com.
(2014, October 20). Defective airbags
prompt urgent Toyota recall and US warning over ruptures. Retrieved from
http://www.theguardian.com/world/2014/oct/20/defective-airbag-recall-warning-toyota-explosive-rupture
Toyota-global.com.
Worldwide Operations. Retrieved from
http://www.toyota-global.com/company/profile/facilities/worldwide_operations.html
Wells, Michael & Ammanath, Deepti. (2010, July). How
Did the Toyota Recalls Affect Customer Loyalty? R.L. Polk & Co. Michigan,
USA.
Williams, Geoff. (2010, April 26). The Toyota Effect: Unlikely Winners and Losers. Retrieved from
http://www.entrepreneur.com/article/206328
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