Abstract
Organizations face public relations crises that affect consumer perception of a brand and its products’ sales. During Toyota’s recall crisis in 2009, the company experienced negative reviews from the media and the public, which led to the loss of revenue in the post-recall period. Toyota took measures to recover from the catastrophe by applying different strategies to meet the needs of their regional consumers (Zhao & Flynn, 2013). The strategies used by the firm and the performance of the brand before the crisis affected how the brand’s name recovered among consumers and employees from different cultures. The similarities and differences in the opinion of individuals from various cultures could affect the financial performance of the firm at the regional level (Heller & Darling, 2012). The present paper will investigate how people from different cultures view the Toyota crisis and the responsibility of the company in crisis. The findings of this research will help global organizations understand how to recover in different markets and identify the strategies applicable to maintain consumer support during a crisis (Fan, Geddes, & Flory, 2013). The researcher will conduct a survey through questionnaires, involving individuals from China and the United States to gauge their knowledge and opinions about the Toyota crisis. Additionally, the study will include interviews of consumers or employees at Toyota from both countries to identify their views on the issue. Through a comparative analysis of the data collected from the surveys by the potential consumers or employees, the findings of this research will be valuable in determining how the recall crisis influenced the company’s brand reputation among consumers from different cultures.
How Culture Influences Public Responses to the Toyota Crisis
Introduction
Overview
Multinationals operate and serve consumers across the world. They have to handle variations in cultures in their communication and marketing efforts. Cultural diversity affects the way people receive information from companies. Consequently, organizations have to design their communication in a manner that meets the needs and expectations of the public (Stieglitz & Krüger, 2011). In most instances, executives communicate to publics differently depending on culture and context. Consumer perceptions and expectations of a brand will influence the most appropriate corporate behavior to meet customers’ needs.
Chinese and American cultures vary on aspects of communication, particularly in the context of how companies operate. Businesses are expected to conform to the norms of society and meet people’s needs (Piotrowski & Guyette Jr., 2010). But what happens in a crisis that transcends many countries and cultures? How do organizations tailor their crisis communication to global audiences who may have divergent cultural frameworks to interpret the crisis?
Purpose
The purpose of the research is to explore how the Toyota crisis was influenced by the legal and cultural contexts in the two largest markets in the world—China and the United States. The research is informed by the need to understand the influence culture has on public responses to crisis. Potentially, due to the differences in cultural responses to crisis, companies might have to adopt different communication channels and models to appeal to customers in different regions. The study will be based on a review of literature on various theories explaining the role of communication in companies operating across cultures. Toyota’s success in communicating with stakeholders in different cultures affected its recovery from the crisis.
Literature Review
The review focuses on the theories relating to culture and communication to explain their influence on the way Toyota overcame the crisis to regain its trust among stakeholders, including customers. The analysis will discuss various theories that can explain the initiative made by the company to solve the issue and also the potential gaps in the approaches and strategies the management undertook. Hofstede’s Cultural Dimension Theory relates to the influence of culture on various aspects of a company, including response to crisis and the channels used to communicate in such circumstances. The theory explains the way the organization would communicate differently targeting people from diverse cultures. Two approaches, uncertainty reduction and uncertainty avoidance, explain how the company could communicate to the audience in different cultures to address the crisis. The literature review discusses uncertainty avoidance as one of the dimensions in Hofstede’s Cultural Dimension Theory. Besides the theories that explain the role of culture in crisis and communication, the literature review describes how culture affects the communication strategy and possible outcome in different markets.
Hofstede’s Cultural Dimension Theory
Various theoretical frameworks explain the role of culture in communicating during crisis since the differences inform the reception of message and the way people respond. One such model is Hofstede’s cultural dimension theory. The concept explains why different cultures react differently to the crisis and the communication strategy used by the company to address it. A company should understand the various aspects of culture before deciding on the approaches to communicate with target customers (Hofstede, 2001). The theory has five dimensions as discussed below.
The first aspect is the power distance index (PDI) measures the distance between societies with different cultures. It considers the proximity of the members of a culture from different power statuses and their willingness to recognize the distance (Hofstede, 2001). It also deals with the fact that all people in society are not equal and the prevailing attitude towards the differences. The disparity influences the way people accept and react to challenges and opportunities in society.
Some cultures rate differently in terms of the power distance index. The United States differs from China concerning this dimension because China’s index is 80 while that of the United States stands at 40 (Hofstede, 2001). In China, inequality is mostly acceptable, with highly polarized subordinate-superior relationships. The dimension determines the acceptability of abuse by superiors in every culture, whereas in China the defense against such acts is minimal. Unlike China, the United States people are close to the centers of power and tend to influence how the country runs. The culture is mostly against inequality in society and encourages equitable aspirations among people. The dimension plays a vital role in the way people understand and appreciate differences.
The two countries would differ in the way they responded to the Toyota crisis and the communication efforts to address it. The Chinese people would be more accepting of visible efforts to address the issue, while the United States’ audience would be more skeptical because of the power distance index (Xiumei & Jinying, 2011). The US, unlike China, allows room for questioning authorities because of the perceived right to social protection. Therefore, companies should consider such aspects when designing crisis communication strategies.
Countries differ in terms of being individualistic or collectivist. Individualism or collectivism (IDV) measures the level of a country in relation with individualism or collectivism. Some states are individualistic, where people focus on individual interests, while others are collectivist, concentrating on the general social good (Hofstede, 2001). The information plays a vital role in the way a company approaches different people.
Countries differ in relation to the level of interdependence they maintain among the members. It considers the “I” or “We” of identity within a society. China rates 20, while the United States rates 91 in individualism (Hofstede, 2001). Individualist societies encourage their members to mind their interests and those of their immediate family. In collectivist cultures, people belong to communities and look each other’s interests. The United States is an individualist, while China is a collectivist society.
Cultures receive communication differently depending on the individualism or collectivism (IDV) measures. Therefore, marketers should understand the communication strategy that appeals to people in different societies, depending on whether they have collective or individualistic ideals (De Mooij, 2015). For example, in China, communicators must appeal to the collective needs of the society, while in the United States they must communicate and convince individuals. Therefore, the dimension reveals the importance of developing customized communication strategies to address a crisis depending on the needs of a particular market.
Some cultures tend to be more masculine than others. The masculinity dimension (MAS) refers to the degree of power as well as assertiveness within a society (Hofstede, 2001). Furthermore, the dimension is associated with role distribution within a society. The aspect determines how information is acted upon by different sectors of a community, depending on culture after it has been received. Highly masculine societies are characterized by increased competition, achievement, and success. Countries that are more feminine tend to care for others and quality of life.
The United States rates almost the same with China in terms of the masculinity dimension (MAS). At 62 (US) against 66 (China), the two countries are most likely to be driven by competition and aspirations (Costa, Crawford, & Jakob, 2013). The masculinity dimension is higher in paternalistic societies. Within the community, these roles are demarcated and determine the society’s reactions to issues affecting it (Hofstede, 2001). Men are more likely to be vocal compared to women.
Companies should understand the masculinity dimension (MAS) to create effective communication strategies targeting different markets or societies. From the perspective of the United States and China, the two would be motivated to achieve positive results even when faced with a crisis (Bakir, Blodgett, Vitell, & Rose, 2015). Therefore, marketers should strive to address crisis effectively to improve competition within the market and appeal to consumers in the masculine, highly competitive markets. After all, the countries are driven by the need for success in all their operations.
While some societies make long-term decisions, others tend to be short-term oriented. Long-term or short-term orientation (LTO) is the frugality, perseverance, and the necessity of ordered relationships in a culture (Hofstede, 2001). Some cultures tend to develop long-term decisions while others make short-term ones based on their orientation.
Countries that rate high in long-term orientation tend to maintain some connections with the past, while addressing present and future challenges. At 87 against the United States’ 26, China is more long-term oriented and prefer to resolve issues to ensure future success. They also create measures to counter emerging issues that might affect them in the short and long term. Conversely, the United States maintains time-honored traditions and norms when addressing crisis (Atchley, Shi, & Yamamoto, 2014). Therefore, in such situations, communicators should take into account the differences to create effective strategies that appeal to a particular culture.
Marketers should understand the dimension when communicating with the audience in the market, especially during crisis. For example, China is a highly pragmatic culture, believing in the value of the truth depending on the context, situation, and time (Atchley, Shi, & Yamamoto, 2014). Therefore, companies should be honest when communicating during crisis. They should strive to adapt their communication strategies to the needs of the particular market.
The fifth dimension considers the reality that the future can never be certain. The uncertainty avoidance index score (UAI) shows the level of tolerance for uncertainty in a culture. Some cultures are more capable of accepting uncertain situations than others (Hofstede, 2001). The cultures that are more tolerant can adapt to changes better than less tolerant cultures.
Countries rate differently in their capability to deal with the uncertain future. The uncertainty cause anxiety, but societies have developed different ways of dealing with it. The United States is more likely to accept uncertainty since it rates higher, 46 compared to 30, in this dimension (Hofstede, 2001). Therefore, China is more likely to create beliefs and institutions to avoid ambiguity (Rieger, Wang, & Hens, 2014). The measures play a role in dealing with anxiety and unknown outcomes of a crisis.
The theory explains why people are likely to respond to issues such as the Toyota’s crisis. Companies should understand the nature of the society and the ability to deal with challenges to create communication strategies that assist in addressing anxiety. For example, China is more likely to prefer the truth than the United States, especially when faced with crisis because loyalty is rated highly in the country (Karahanna, Williams, Polites, Liu, & Seligman, 2013). Crisis communication strategies should be informed by the understanding of the differences between the markets.
Uncertainty Avoidance Theory
Uncertainty Avoidance Theory emerges as a critical dimension measured by Hofstede (2001). The theory relates to the level of tolerance of uncertainty within a culture, including measures to avoid ambiguity that causes anxiety. Just like uncertainty reduction theory, it reveals people’s response to such situations. However, while uncertainty avoidance theory considers actions taken to avoid uncertainty, uncertainty reduction explains measures such as information seeking that enable people to deal with such issues. Uncertainty avoidance also refers to the way a social group reacts to uncertainty or ambiguity. According to Hofstede’s study, the U.S. scores 46 on the dimension, which is low uncertainty avoidance. The score means that the U.S. is highly accepting of new ideas and innovation (Hofstede, 2001). Therefore, cultures can either be uncertainty avoiding by putting measures, including rules and regulations to prevent such situations. Some will seek the absolute truth in all situations.
The case of Toyota presents a typical example of an uncertain situation. Thus, the reaction by the people depends with whether the society is tolerant to uncertainty. The company would be better in dealing with the crisis when operating in cultures that are more comfortable with uncertain or ambiguous situations. Communication is the most effective method to help consumers to deal with uncertainty (McCormack & Ortiz, 2017). However, acceptance of the message depends on the level of tolerance of ambiguity within the culture. While some cultures implement means to reduce uncertainty, others seek ways, such as adequate information to reduce the impact of uncertain situations.
Uncertainty Reduction Theory
Rather than seeking approaches to avoid uncertainty, some people and cultures assume means to reduce its impact. Uncertainty reduction theory explains the role of information in achieving the reduction objective. Charles Berger and Richard Calabrese developed the model in 1975. They indicate that people seek information when communicating to understand the second party, an hence, reduce uncertainty (Berger & Calabrese, 1975). During the process of communication, individuals attempt to learn about each other and use data to reach a conclusion. One of the essential aspects of the theory, particularly in a business environment, is that learning about other people’s behavior shows how they are likely to act.
According to the theory, reducing uncertainty makes it easier to understand how individuals react to different situations and make the best choices. For instance, when a company invests in learning about the nature of its consumers, they can better respond to news about the firm (Bowen & Zheng, 2015). Reducing uncertainty is critical in improving the capacity of different entities to make appropriate decisions about the businesses. Clear communications is one of the ways of preventing uncertainty in business. Another related theory that applies to the uncertainty caused by the crisis is uncertainty avoidance.
Cultural Effects of Communication Strategies and their Effects
Culture is important in the way companies define their communication strategies to appeal to their audience. The aspect is particularly significant in crisis because the effectiveness of information sharing determines the success in addressing the situation and reaction of stakeholders (Ulmer, Sellnow, & Seeger, 2017). The communication strategy designed during such situations is aimed at controlling the environment depending on the cultural aspects of the target market (Olsson, 2014). Therefore, Toyota needed to understand the cultural differences and the way different people receive and process information to be successful in sharing information about the recall to mitigate effects of the situation. The reaction of consumers to the recall was necessary for the future operations of the company in the two of the leading global markets, the United States and China.
Research Questions
RQ1. How did the differences in cultural dimensions (Hofstede) affect the Toyota crisis in two of the largest markets in the world—China and the United States?
RQ2. How did culture affect the crisis communication strategy of the Toyota Company to restore its image after the recall crisis with the Chinese and American public?
RQ3. How did culture affect the consumer response to the recall and market performance henceforth?
References
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