Operations Improvement Plan for Toyota
This paper has been prepared for MBA6022 Strategic Operations Management Section 103
Clear and transparent communication efforts are critical in the strength of an organization. These efforts go beyond the internal walls of an organization and extend to their external customers. Effective and efficient communication is crucial to an organization on how consumers perceive the company and brand. There seemed to be a significant break-down across the lines of communication within Toyota, which resulted in a significant negative public perception of the organization and brand. Toyota ...view middle of the document...
Flowcharts of the current and updated process will be shown in the appendix as well as a before and after cause and effect diagram.
Toyota Motor Corporation was founded by Kiichiro Toyoda on August 28, 1937 and has its headquarters in Toyota, Japan. Toyota set their sights on becoming one of the top leaders in the automotive industry worldwide. Their biggest competitor is General Motors. The company was well on their way to gaining market share prior to the acceleration recall crisis of late 2009. Their goal of becoming the number one U.S. automotive company is in jeopardy. Their priorities have shifted from quantity over quality and need to be re-directed, as well as putting the customer first. The highly publicized fatal crash of the Saylor family led to further accusations against the company and how they disregarded previous customer complaints about defective products. The company also received backlash from regulators and the media, which only fueled negative perceptions among the public. Toyota’s reputable brand of reliability, durability and quality was questioned and was replaced with perceptions of mistrust and dismissiveness. The way in which their crisis management was handled resulted in Toyota losing billions. “Toyota just agreed to pay $1.2 billion in a deferred prosecution agreement with DOJ and accept a safety monitor for failing to disclose to regulators—and indeed misleading them—about accelerators that became stuck on certain types of floor mats or because of certain elements in the accelerator itself” (Heineman, 2014). The issue that the public had with Toyota was how they handled the unintended acceleration problem initially. While in its infancy the company could have resolved the issue or came up with alternatives to solve the problem before the problem spiraled out of control.
Description of Key Challenge
A general rule to follow in crisis management communication is to be proactive rather than reactive. In critical matters, it is imperative to alert all of the parties who will be affected by this process in a timely fashion. “Toyota representatives reacted to the complaints in ways that confounded marketing and crisis management experts. They confused everyone by jumping to conclusions and suggesting different causes in rapid succession. First, they attributed the problem to operator error, which is the most frequent cause of self-acceleration problems in automobiles” (Kalb,2012). Toyota’s executives should have had a crisis management team set in place to communicate the accelerator recall crisis effectively to the public. “The mantra for all leaders in crisis management must be: It is our problem the moment we hear about it. We will be judged from that instant forward for everything we do—and don’t do” (Heineman, 2014). Toyota also failed at properly informing shareholders and regulators of problems the moment they occurred. This lack of transparency was seen as the company trying to sweep...