The Damage to Toyota's Brand Image Essay

1610 Words7 Pages
In 2010, automaker Toyota was faced with one of the biggest threats to its brand, the safety of its vehicles. Toyota failed miserably in its response to the safety issues due to a few major management issues. 1. Group think 2. Lack of leadership 3. An organizational structure that could not offer quick response 4. A flawed evaluation and control process These issues led to Toyota losing much of its brand equity as a leader in safety. According to an article in Time Magazine from February 2010, the automaker didn't just have safety issues in 2009 that led to the recalls, there had been smaller recalls for similar issues nearly every year since 2002. Historically, Toyota has been an organization that can take problems, root out…show more content…
These could include heuristics, biases, anchoring representativeness. I think that the one that led to Toyota's problems was an escalation of commitment. Toyota had made major investments in their systems that were now out in the market and felt they needed to protect those investments. Toyota also suffered from a sunk-cost trap or a bias to make decisions that justify past choices (Ahlstrom & Bruton, 2010). This situation also brought to light the lack of response from senior leadership in the years leading up to the disaster of millions of cars recalled. The problem for Toyota was that they were managing the problems of the brake systems with blinders on, this resulted in the problem not being seen as a problem until it was too late. It seems that Toyota also wanted to portray itself in a positive light, further perpetuating the escalation of commitment. Toyota also suffered from groupthink up to and throughout the pedal crisis in their upper management. This might be due in part to some cultural norms in Japan like a mid to high power distance and a high tendency toward collectivism. A high power distance would mean that employees and lower level managers may not raise the problem to upper management(Ahlstrom & Bruton, 2010). A collectivist culture might also fall prey to group-think because they do not want to upset an established hierarchy and maintaining harmony in
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