Case Study Toyota crisis

Organizational Crisis negatively effect organization’s name and image, as well as adversely impact employee by instilling doubt, insecurity and distrust (Tahmicioglu, 2010). Employees are directly effected by the crisis, as they are the primary stakeholders (Obston, 2014) and brand ambassadors of the company. Thus, to ensure wellbeing of employees, especially in time of catastrophe, they should be well informed and fostered under the guidance of company’s leaders.

Leaders at Toyota should take an immediate action; start with early internal crisis communication, take accountability and show their commitment to resolving the crisis. Male (2004) suggests, being proactive and transparent lessen doubt and distress among employees. It will be beneficial if a live talk is set up with the employees. Live podcast will personalize the message, and will allow employees to directly hear compassion and empathy in the leader’s voice. Establishing an active feedback loop is also very effective (Miller, 2014), an online forum on company’s intranet will be a great way to facilitate two-way dialogues between employees and executives. The forum will be pivotal in giving direct feedback to employees’ questions and concerns, and for consistently providing updated information. Along with starting communication, hotlines dedicated for crisis should be provided as part of employee assistance program; employees should be encouraged to actively use the services to get professional help they need for dealing with crisis.

Lack of immediate dialogue leads to speculation (Miller, 2014), and when the magnitude of the crisis is as big as Toyota’s recall, consistent media scrutiny and amplification of negative news can further fuel anxiety and uncertainty among employees (Cole, 2011). Therefore, its imperative leaders eradicate uncertainty by giving timely crisis communication that precedes external news and provide continuing support to employees.

An early two-way dialogue is a good start

References: 1. Cole, R. E. (2011). What Really Happened to Toyota. MIT Sloan Management Review - The New Business of Innovation. 2. Gillespie, N., & Dietz, G. (2012). The recovery of trust: Case studies of organisational failures and trust repair. Institute of Business Ethics: London. 3. John, S. (2010).  A think Piece: How HR caused Toyota to Crash. Retrieved from http://www.ere.net 4. Liker, J. (2004). The Toyota way 14 Management Principles from the World 's Greatest Manufacturer. McGraw-Hill 5. Male, B. (2010). How to handle a product recall. Retrieved from http://www.businessinsider.com 6. McNeill, D. (2013). Cover-up: Toyota and Quality Control. The Asia Pacific Journal, Vol 11, Issue 36, No. 1, 7. Miller, J. (2014). 4 Tips to help leaders communicate during a crisis. Retrieve from http://smartblogs.com 8. Obston, A. (2014). 5 ways to communicate with employees during a crisis. Retrieved from http://www.ragan.com 9. Tahmicioglu, E. (2010). Surviving your company’s mistake. Retrieved from http://www.nbcnews.com 10. Rousseau, D. (1995). The psychological contract: Violations and Modifications. The Organizational Behavior Reader. 8th ed.