Crisis Management, Japanese Style

Crisis Management, Japanese Style

By Michelle Krebs February 8, 2010

Last Friday's press conference held by Toyota's chief executive Akio Toyoda has generated plenty of buzz. Much has been made in the Western and Japanese media about whether or not his "apology" -- and even his bow at the start of the conference -- demonstrated true contrition. And there's been various interpretation of his words -- was he sorry for the quality problems or sorry for the concern it caused.

In a recent column in the Wall Street Journal, Jeff Kingston, director of Asian Studies at Temple University Japan, discusses the uniqueness of the Japanese business culture that led to what the headline describes as "A Crisis Made in Japan."

 

Kingston opens the column quoting a Japanese proverb that says: "If it stinks, put a lid on it." He notes that putting a lid on it has been Toyota's approach to dealing with safety problems related to floormats trapping gas pedals, sticky throttle pedals and now Prius brake failures, "initially denying, minimizing and mitigating the problems"

Kingston, like many others, note that Toyoda "was MIA for two weeks" and the company was less than forthcoming" with information.

But the professor suggests Toyota's "dilatory and inept" response is not surprising "because crisis management in Japan is grossly undeveloped." He admits not being able to come up with a single example of a Japanese company doing a good job managing a crisis over the past two decades -- "whether it's exploding televisions, fire-prone appliances, tainted milk or false labeling."

He writes: "The pattern is all too familiar, typically involving slow initial response, minimizing the problem, foot dragging on the product recall, poor communication with the public about the problem and too little compassion and concern for consumers adversely affected by the product."

He says it is in part due to the fact that product liability is non-existent in Japan and Japanese corporations basically "manage" the media message. But a cultural element exists as well.

"There is also a culture of deference inside corporations that makes it hard for those lower in the hierarchy to question their superiors or inform them about problems. The focus on consensus and group is an asset in building teamwork, but also can make it hard to challenge what has been decided or designed."

Nevertheless, Kingston suggests, this is Toyota -- and Japan's -- opportunity to step up.

"A resurgent Toyota is a good-news scenario that can mean a lot to the battered national psyche and help restore Japan's reputation as a manufacturing powerhouse where the attention to detail is a hallmark rather than a question mark."

 

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.