Toyota's Crisis
“Campus”
DENMARK
CORP 3364
Crisis and Business Continuity Management
An Analytical Evaluation
On
Toyota’s Crisis of Unintended Acceleration
Submitted By:
Ram Prasad Kadariya
P11016207
Nov. 28, 2011
Tutor:
Sven-Eric Bruhn Bertelsen
Toyota Crisis of Unintended Acceleration
Definition
Any company smaller or larger can have a crisis sooner or later and that can have serious negative impact on it. Pearson and Clair ( 1998 ) as cited in Crandal, Pamel and Spillen ( 2010 ) define crisis as an event with low probability but high impact on organization. Similarly, Coombs ( 2007 ) defines crisis as an unpredictable event that can have serious impacts on organization with negative outcomes ( cited in Crandal, Pamel and Spillen, 2010, p. 4 )
Toyota became world’s No. one automobile company going ahead of General Motor in 2008. But sooner Toyota got into the serious crisis caused by the safety issue of sudden unintended acceleration and its lack of proper management leading to the massive recall of more than 14 million vehicles globally (Jacks Investment Research, 2011), government investigation, heavy fines of 48.8 million US dollar for not reacting appropriately to the report of problem and the legal actions from the victims (New York Times, 2011). Here it seems that wide spread criticism of Toyota from public, medias and government agencies (MacKenzie & Evans, 2010 ) was unpredictable for Toyota. Similarly, massive recall of 11 millions vehicles, government investigation, fines and legal action from the customers were serious negative outcomes. Damage on Toyota’s reputation (The Economist, 2011) and loss of market share (Kitamura, Ohnsman and Ito, 2011) are other negative outcomes of the incident. This event had been very difficult to handle for Toyota These all things indicate that this is a case of serious organizational crisis in the terminology of Crisis Management.
Contributory Factors
Denial of the problem:-
Toyota denied the
DENMARK
CORP 3364
Crisis and Business Continuity Management
An Analytical Evaluation
On
Toyota’s Crisis of Unintended Acceleration
Submitted By:
Ram Prasad Kadariya
P11016207
Nov. 28, 2011
Tutor:
Sven-Eric Bruhn Bertelsen
Toyota Crisis of Unintended Acceleration
Definition
Any company smaller or larger can have a crisis sooner or later and that can have serious negative impact on it. Pearson and Clair ( 1998 ) as cited in Crandal, Pamel and Spillen ( 2010 ) define crisis as an event with low probability but high impact on organization. Similarly, Coombs ( 2007 ) defines crisis as an unpredictable event that can have serious impacts on organization with negative outcomes ( cited in Crandal, Pamel and Spillen, 2010, p. 4 )
Toyota became world’s No. one automobile company going ahead of General Motor in 2008. But sooner Toyota got into the serious crisis caused by the safety issue of sudden unintended acceleration and its lack of proper management leading to the massive recall of more than 14 million vehicles globally (Jacks Investment Research, 2011), government investigation, heavy fines of 48.8 million US dollar for not reacting appropriately to the report of problem and the legal actions from the victims (New York Times, 2011). Here it seems that wide spread criticism of Toyota from public, medias and government agencies (MacKenzie & Evans, 2010 ) was unpredictable for Toyota. Similarly, massive recall of 11 millions vehicles, government investigation, fines and legal action from the customers were serious negative outcomes. Damage on Toyota’s reputation (The Economist, 2011) and loss of market share (Kitamura, Ohnsman and Ito, 2011) are other negative outcomes of the incident. This event had been very difficult to handle for Toyota These all things indicate that this is a case of serious organizational crisis in the terminology of Crisis Management.
Contributory Factors
Denial of the problem:-
Toyota denied the
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