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In: Business and Management

Submitted By sally1990
Words 363
Pages 2
What were the drivers of the Toyota crisis? Why was Toyota facing a recall crisis?

- Strategic, cultural and structural drivers.

Toyota faced many issues regarding their vehicles over the years, one of which was regarding the accelerator in their vehicles. The first evidence of the accelerator crisis emerged in the U.S, when in 2009 a Lexus E350 crashed. The brakes appeared to be defective. In September of 2009, Toyota recalled 3.8 million of their vehicles in the U.S claiming that the dealerships in the U.S placed the floor mats incorrectly, and there was no vehicle-based cause. Such a crash was a blow for Toyota’s reputation as being safe, reliable and of quality consistent. The company’s aggressive growth strategies pressured the executives to cut costs excessively. The implementation of these strategies made them overlook the customer complaints and therefore, they were slow to respond.
Toyota’s focus on the criticality of speed in product development formed Construction for Cost Competitiveness for 21st century (CC21). This strategy took their already adopted lean manufacturing process to extreme levels, causing them to focus progressively on fast growth and poor quality. Aside from operational strategies, the structure within the company was impaired. The executives in the U.S could not respond well to the crisis as the orders from Japan had not come. Structural drivers commented that all units report to Japan and all key decisions re made there. Therefore, since the executives their did not respond to customer complaint data, the crisis became worse. Toyota recalled almost 8.8 million due to safety reasons, and still they were in no hurry to solve the problem. This put consumers at risk by knowing about the issues in September of 2009, but did not react till January of 2010.
Another reason behind this recall crisis was the impaired...

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