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Transcript

GOAL!

Analysis

Symbolic Frame

  • Refers to how people make sense of the world around them/see things
  • Toyota's image was negatively impacted
  • Toyota created material to raise the company symbol (brand) back to where it previously was
  • Created a culture of Toyota owners

Structural Frame

  • Toyota's CEO admitted to becoming narrow minded and focusing on volume rather than quality
  • Miscommunication between executives and lower level employees was poor
  • Falls under stagnant bureaucracy
  • Production became outdated which led to negligence
  • Company executives became comfortable and lazy

The Comeback

  • The Toyota brand took major damage from the recalls and drawn out media attention coupled with government criticism
  • A string of public statements and strategic ads quickly followed
  • Toyota CEO issued a global apology to consumers
  • Toyota corrected all manufacturer problems and rose their quality back to historic standards and was able to regain their image rather quickly
  • Toyota connected with their consumers and addressed their feelings of dissatisfaction on a personal level
  • In 2014, Toyota was awarded the coveted Most Valuable Car Brand 2014
  • The company has turned in an increase in profit from where Toyota was before the recalls
  • Toyota has received a consistently above average customer satisfaction rating since the crisis.

Case continued...

  • NHTSA reported 37 deaths connected to the fiasco
  • The Toyota recalls of 2009-2011 were pegged as the largest mass recall in history
  • Recalls came while Toyota was reeling from recession
  • Each U.S. Toyota dealership lost an estimated $1.75 million per month in revenue
  • $2,470 million worldwide was Toyota's total reported loss from the recalls
  • In a 4 day span between January 25th and 29th in 2010, Toyota shares fell 15%

Case continued...

THE TOYOTA CRISIS

  • An estimated 5.2 million vehicles were recalled between Nov. 2nd, 2009 and Jan. 28th, 2010 in response to misplaced floor mats and pedal entrapment
  • 2.3 additional Toyotas were recalled for the sticking accelerator pedal
  • Certain Lexus and Pontiac models fell under the umbrella of recalls conducted
  • Feb. 2010-Toyota issued a 3rd separate recall of hybrid vehicles for their anti-lock brake software
  • All recalled models were suspended from sale as they were to undergo replacements for the defective parts.
  • 20 million is the approximated total number of vehicles recalled

Case

Toyota's downfall and the handling of financial loss and customer dissatisfaction

  • Nov. 2nd, 2009-Toyota & NHTSA initiate first recall in response to out of place driver's side floor mat.
  • Toyota drivers experienced pedal entrapment causing unintended acceleration resulting in several accidents
  • Jan, 21st, 2010-A second recall was conducted after several crashes were shown not to be caused by out of place floor mats
  • Defect was identified as a mechanical sticking of the accelerator pedal linked to manufacturer negligence
  • Toyota referred to the issue as Sticking Accelerator Pedal

The purpose of this analysis is to observe how the Toyota Motor Corporation used the frames of organizational thought when dealing with the massive recalls and how they were able to regain their high status among automakers.

The questions being asked are:

  • How did Toyota become one of the least trusted automakers between 2009-2011?
  • How were they able to regain their status as most valuable car brand in only 3 years?

Answering these questions will lend insight to how Toyota used the frames of organizational thought to salvage their sterling reputation

Overview

  • Between 2009-2011 Toyota was forced to recall approximately 20 million vehicles
  • Several separate but related recalls were conducted with the assistance of the NHTSA
  • Initial problems centered around reports of "unintended acceleration" later linked to several accounts of manufacturer negligence
  • The fiasco called Toyota's reputation for building durable and safe automobiles into question

Toyota's fall from grace, and their road back to the top

Toyota's track record

  • One of the largest and most trusted auto manufacturers in the world
  • Outlined the critical links between quality, customer satisfaction and profit.
  • July 2012-Reported the production of its 200-millionth automobile
  • Produces vehicles under 5 different brands
  • Toyota, Hino, Lexus, Ranz, and Scion
  • As of July 2014, Toyota is the largest listed company in Japan by market capitalization and revenue.
  • 1st motor corporation to offer hybrid models in its line-up.
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