Essays on Effective Crisis Management - Toyota Case Study

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The paper "Effective Crisis Management - Toyota" is an outstanding example of a business case study.   Effective crisis management is important for the success of a company. Today’ s businesses are exposed to many forms of crisis both natural and man-made and these calls for effective crisis management (Bernstein 2011, p. 6). Indeed, the last few years have been characterized by many business incidents which have hard adverse impacts on companies across industries. Product recalls, in particular, have become a big problem for businesses and manufacturers. Whenever a company makes a product recall, this can have an adverse effect not only on the company reputation but also on the bottom line.

Toyota Motor corporate is one of the automakers that have made several vehicles recalls in recent years, the most recent just witnessed in March 2017 (Atiyeh & Blackwell 2017). Toyota is a Japanese multinational automaker incorporated in 1937 by Kiichiro Toyoda. In 2016, Toyota was the world’ s second-largest automaker after Volkswagen. This essay will analyze the 2017 Toyota vehicle recalls with a focus on how the automaker handled the issue. What Happened Toyota has had many incidences of vehicle recalls and the latest just happened in March 2017 after the automaker recalled about 2.9 million vehicles that had been released to the market (Reuters 2017).

The recall was triggered by the fact that the recalled vehicles had been fitted with faulty airbag inflators manufactured by Takata. It is alleged that the airbag inflators have the potential of exploding when exposed to hot conditions for a long period. The recall by Toyota was prompted by information that at least 16 people have died in the United States with all the deaths linked to the explosion of Takata airbag inflators.

The airbag inflators are believed to contain ammonium nitrate chemical compound that if not used with a drying agent can result in a deadly explosion. For this reason, the global transport authorizes ordered that more than 100 million vehicles that had this airbag inflator from Takata be withdrawn from the market. As for Toyota, about 1.16 million cars were recalled from the Middle East, Oceania and other small markets, which approximately 750,000 vehicles were recalled in Japan (Reuters 2017).

Nonetheless, North America, which is the automaker’ s biggest market, was exempted from the recall. Analysis of the Recall Toyota has had to recall its cars several times and this raises a lot of questions as pertain to how well it is prepared to handle the crisis. Although Toyota’ s current recall of its vehicles was done after the global transport authority ordered that all vehicles fitted with Takata airbag inflator be recalled, Reuters (2017) indicates that the automaker has managed to respond effectively to the current crisis. First, Toyota’ s spokespersons have filled the media with information and massages of assurance that everything is under control and that all vehicles that are affected will be removed from the market to avoid exposing customers to the risk of injuries and even death should the inflators explore.

The automaker’ s public relations (PR) has also been working round the clock tweeting and blogging its customers in order to fill the information vacuum by ensuring that all its customers from across the globe to understand the vehicle models that were affected by the Takata airbag inflator so that they can release these cars back to Toyota to avoiding exposing themselves to risk (Tajitsu 2017).

Moreover, Toyota has responded effectively to the recall by flooding its website with a barrage of information about the recall that stakeholders might want to know while its call center has also been busy round the clock handling customer inquiries about the recall.

References

Atiyeh, C., &Blackwell, R 2017, Massive Takata airbag recall: Everything you need to know, including full list of affected vehicles. July 11, viewed 15 July http://blog.caranddriver.com/massive-takata-airbag-recall-everything-you-need-to-know-including-full-list-of-affected-vehicles/

Bernstein, J 2011, Manager's guide to crisis management. McGraw Hill Professional, New York, NY.

Coombs, W. T 2014, Crisis management and communications (Updated September 2014), The Institute for Public Relations, viewed 12 July 2017 http://www.instituteforpr.org/crisis-management-communications/

Goel, S 2009, Crisis management: Master the skills to prevent disasters. Global India Publications, Delhi.

Reuters 2017, Toyota recalls 2.9 million vehicles globally over airbags. CNBC March 30, viewed 12 July 2017 http://www.cnbc.com/2017/03/30/toyota-recalls-vehicles-globally-over-airbags.html

Stuart Mill, J 2017, Utilitarianism. Coventry House Publishing, Coventry.

Tajitsu, N 2017, Toyota recalls three million cars worldwide after exploding Takata airbags linked to 16 deaths. Independent March 30, viewed 12 July 2017 http://www.independent.co.uk/news/business/news/toyota-recall-3-million-cars-types-worldwide-airbags-explode-16-people-killed-a7657386.html

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