Crisis Management at Toyota

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Case Details:

Case Code : MKTG256
Case Length : 27 Pages
Period : 2009-2010
Pub Date : 2010
Teaching Note : Not Available
Organization : Toyota Motor Company
Industry : Automotive
Countries : Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Failure in Crisis Management? Contd...

As per US federal law, automakers were required to disclose defects within five business days. However, Toyota refuted the allegations that it had violated safety regulations and maintained that it had agreed to pay the fine in order to avoid a dispute.

According to a statement released by the company, "We regret that NHTSA tentatively concluded that they should seek a civil penalty. Toyota denies NHTSA's allegation that it violated the Safety Act or its implementing regulations. We believe we made a good faith effort to investigate this condition and develop an appropriate counter-measure. We have acknowledged that we could have done a better job of sharing relevant information within our global operations and outside the company, but we did not try to hide a defect to avoid dealing with a safety problem. Toyota is already moving ahead with a number of important steps to strengthen our quality assurance operations and enhance our ability to meet customer expectations."³

Toyota, an iconic car maker, was founded in 1937. Its business segments mainly included automotive operations and financial services operations. It was also involved in other business operations.⁴

Excerpts >>

3] Jeremy Cato, "Crisis Management Not Toyota's Strong Suit," www.theglobeandmail.com, February 25, 2010.
4] The National Highway Traffic Safety Administration (NHTSA) is an agency of the US Department of Transportation (DOT). Its objective is to save lives, prevent injuries, and reduce economic costs due to road traffic crashes through education, research, safety standards, and enforcement activity.


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