Crisis Management: The Toyota Way Leadership, Recall, Recovery

Abstract

After the Japanese automaker Toyota Motor Corporation reported a loss of US$1.5billion in 2008 due to the global financial crisis, Toyota found itself in a highly publicized recall crisis with major pressure from the U.S. government and the National Highway Traffic Safety Administration (NHTSA). Unfortunately, the recalls for faulty pedals and unintended acceleration in the US from 2009-2010 came at a trying time for Toyota. However, the recall crisis allowed Toyota to acknowledge it had lost its way, by compromising the fundamental founding principles of quality and customer safety during its rapid global expansion. Many scholars have criticized President Akio Toyodas immediate crisis response of denial and delayed response, and have further suggested the necessary changes to company within recover from not only its reputation, but also, from another crisis situation. A major underlying root cause of the crisis was the companys straying from The Toyota Way as the corporate leaders focused on rapid expansion and cutting costs. Thus, this paper will attempt assess the recovery status of Toyota post-crisis by examining the Toyota leadership pre-crisis: Hiroshi Okuda, Fujio Cho, and Katsuaki Watanabe, and post-crisis leadership under Akio Toyoda with the realignment with the Toyota Way by addressing the shortcomings of his predecessors.