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 role of the company in issue. 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 some instances, executives will communicate to markets 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 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. Lasswell’s Model of Communication considers the role communication played in reducing uncertainty caused by the crisis. Each theory is examined below.
Hofstede’s Cultural Dimension Theory
Hofstede’s cultural dimension theory explains why different cultures react differently to the crisis and the communication model 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). For instance, in the United States people are close to the centers of power and tend to influence how the country runs. The dimension plays a vital role in the way people understand and appreciate differences.
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. For example, the United States is proven to be more individualistic compared to China, which is collectivist.
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. The masculinity dimension is higher in paternalistic societies. For instance, in China, gender roles differ. Within the society, 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.
Long-term or short-term orientation (LTO) is the frugality, perseverance, and the necessity of ordered relationships in a culture (Kent, 2011). Some cultures tend to develop long-term decisions while others make short-term ones based on their orientation. Countries such as the United States that set long-term goals are more resilient compared to those that focus on short-term objectives. They also create measures to counter emerging issues that might affect them in the short and long term.
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. The United States is more likely than China to accept uncertainty. The theory explains way people are likely to respond to issues such as the Toyota crisis.
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. 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 US 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.
Hofstede’s cultural dimension theory is important in understanding how organizations decide when interacting with different cultures. The company should understand the nature of decision-making when communicating with people from different cultures.
Uncertainty Reduction Theory
Most human interactions around purchasing products or services involve some degree of uncertainty. The uncertainty reduction theory is a model that emphasizes the collection of information about another party when making decisions on future interactions. During the process of communication, individuals attempt to learn about each other and use the data to reach conclusions. Such knowledge helps the parties in concluding about each other and choosing the most appropriate approach to tackle challenges in making choices. Reducing uncertainty is the process of learning about the nature of the relationship that a person engages in and how it may affect his/her positions on various issues (Cairney, Oliver, & Wellstead, 2016). The development of relationships depends heavily on the capacity of the parties involved to trust each other and share information. The reduction of uncertainty is a critical process that allows the parties in a discussion to make appropriate decisions about their counterparts. For example, a company can reduce uncertainty among its customers by providing details about a product or service. The open communication enables stakeholders to become certain about the product or service to make a purchase decision.
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. The most effective way of addressing uncertain situations in business is using effective communication models such as Lasswell’s Model of Communication, which is utilized in communicating to stakeholders during a crisis.
Lasswell’s Model of Communication
This model of communication intends to analyze the impact of information on the audience and assess its feedback. The theory is comprised of five components that define how communication affects the listeners and other stakeholders involved. The first dimension is the “who,” which is the source of the information when the company communicates to its stakeholders (Lasswell, 1948). Corporations need to consider the integrity of individuals and the level they hold in the firms. Information from a senior executive has different impacts on the audience compared to that passed by an employee about the same company.
The second dimension is the “says what,” which is the message and its content. The content analysis looks at who conveyed the information and the influence the speaker’s message would have to the gathering. Therefore, the analysis of information checks the information that is passed to the audience (Lasswell, 1948). The company needed to make a positive impression about its brand and image regardless of the crisis. The content analysis examines the issues addressed by the piece of information and how the audience values them.
The third dimension is the “channel,” which the company uses to reach its audience, such as through the media or press. In the media analysis content, the firm aims at assessing the channel used in communication with the objective of identifying its impact on the brand image (Cairney, Oliver, & Wellstead, 2016). Organizations have to consider how the elements in Lasswell’s model affect the effectiveness of their communication goals (Sapienza, Iyer, & Veenstra, 2015). For example, a company should implement communication channels that will have the most impact on the audience during a crisis. The media, including the conventional and social media, can have a significant influence because it allows to reach a mass audience. The choice of the channel of communication influences the capacity of the message to attain its intended goals.
Another dimension includes “whom,” which refers to the audience that the message is intended for. In the business environment, companies use the theory to assess the influence of communication on their target markets. The audience analysis identifies how a particular listener receives the information. Firms may decide to communicate differently to various audiences depending on how their background affects the reaction to the news.
The last dimension is the “effect,” which is understood based on the feedback from the audience (Lasswell, 1948). The model is critical in demonstrating how each of these elements influences the reception of information by different audiences. It is critical for a business to use the most influential message and channel to reach customers in time of crisis.
Research Questions
RQ1. What kind of strategy is helpful for Toyota Company to restore the image after the recall crisis with the Chinese and American public?
RQ2. How did Toyota differ in its recall strategy in the US and China?
RQ3. What was the impact of the strategy on each national public?
References
Bowen, S. A., & Zheng, Y. (2015). Auto recall crisis, framing, and ethical response: Toyota’s missteps. Public Relations Review, 41(1), 40-49.
Cairney, P., Oliver, K., & Wellstead, A. (2016). To bridge the divide between evidence and policy: reduce ambiguity as much as uncertainty. Public Administration Review, 76(3), 399-402.
Fan, D., Geddes, D., & Flory, F. (2013). The Toyota recall crisis: Media impact on Toyota’s corporate brand reputation. Corporate Reputation Review, 16(2), 99-117.
Heller, V. L., & Darling, J. R. (2012). Anatomy of crisis management: Lessons from the infamous Toyota Case. European Business Review, 24(2), 151-168.
Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations (2nd ed.). Thousand Oaks, CA: Sage Publication.
Lasswell, H. (1948). The structure and function of communication in society: The communication of ideas. New York: Institute of Religious and Social Studies.
McCormack, S. & Ortiz, J. (2017). Choices and connections: An introduction to Communication. 2nd ed. Bedford: St.Martins.
Piotrowski, C., & Guyette Jr, R. W. (2010). Toyota recall crisis: Public attitudes on leadership and ethics. Organization Development Journal, 28, (2), 89-97.
Sapienza, Z. S., Iyer, N., & Veenstra, A. S. (2015). Reading Lasswell’s model of communication backward: Three scholarly misconceptions. Mass Communication and Society, 18(5), 599-622.
Stieglitz, S., & Krüger, N. (2011, November). Analysis of sentiments in corporate Twitter communication–A case study on an issue of Toyota. In Proceedings of the 22nd Australasian Conference on Information Systems (ACIS).
Zhao, X., Li, Y., & Flynn, B. B. (2013). The financial impact of product recall announcements in China. International Journal of Production Economics, 142(1), 115-123.
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