Case Study About Trust Report Essay
Case Study About Trust Report
Trust is the ability to rely confidently, either on an individual or in this scenario the company’s product. It is judged on three dimensions; namely, the ability to be technically competent, its benevolence, that is, the interests and motives, and, finally, the integrity. Positive judgment is a good reflect on the customers’ will to take part in the organization’s dealings. This act may involve buying the company’s products, investing in its stocks, or being an employee. In case any of the attributes become questionable, it may make the customers wary and reluctant in risk taking (Kourdi & Bibb, 2007). Distrust in the organization may increase inefficiencies of innovation and damage relationships.
Causes leading to the loss of trust
Toyota Motor Corporation is a Japan based motor manufacturer. Its headquarters are in Aichi, Japan. This corporation was founded in 1937 and had been since among the best performing motor manufacturers and dealers in the world. With more than 3 billion yen as profit in a fiscal year, as per the financial report of 2013, Toyota could be said to be among what Forbes magazine would name the top 100 best corporations (Kourdi & Bibb, 2007). Since the year 2004 to 2010, there had been several complains on Toyota Motors concerning engines and accelerators. On 28 August 2009, a tragic accident occurred in San Diego involving a family travelling in a Toyota Lexus. The car lost control and all the passengers died. Toyota, known for its impeccable repute for reliability and quality products suddenly had to deal with trust crisis.
A deficiency in attributes that lead to trust of the company’s products and services in form of a scandal can lead to instant lack of trust (Blackshaw, 2008). An effective response to a trust scandal or failure needs interventions that are aimed at curbing distrust and rebuilding trustworthiness. Distrust regulation can be done through enforcing controls, conditions, and constraints to employees in order to rectify the failure. Intervening may require the removal of guilty parties, the change of the cultural norms of the organization, and introduction of new or the revision of incentives (Blackshaw, 2008). This is not sufficient. Statements and actions too are needed to demonstrate trustworthiness. Statements that show the company’s compelling ability, integrity, and benevolence are required. Apologies, transparency, and ethical practice are required as well.
How effective do you consider the taken mitigation actions?
Effective repair of trust should undergo simple steps. The first is immediate response to Toyota Corporation belated communications; belated recalls and public apologies damaged its reputation more than the original accident (Liker, 2004). The company ended up losing its sales, investors, and market share. They also lost customer confidence. Toyota Company expressed concern by realizing a statement where they apologized to the family of the victims. It also pledged to carry out investigations. However, the company, regrettably, did not point out the possible causes. This seems like an effective immediate response but it is required for a company to point out to possible causes. Later, the floor mats were suspected to be the likely cause of two accidents that had occurred earlier, but this did not prompt the company into issuing a customer warning (Liker, 2004).
They acted upon the suspicions five days after the analysis of the cause was confirmed. This was nineteen days after the fatal accidents. In order to rebuild customer, employee, and investor trust, Toyota Motors released a statement assuring their customers that the floor mats were in good conditions and safe. They praised them as being among the safest mats. This statement was later challenged by NHTSA who accused the company of releasing misleading and inaccurate reports. In a bid to save itself from further downfall, Toyota Motors reacted by giving a remedy to the sticky floor mats. This action caused discretion among investors who thought of the company to have had unclear motives when they released the first statement (Liker, Hoseus, & Center for Quality People and Organizations, 2008). This further dented the trust of the shareholders.
The mitigation process of the Toyota Company took a long time, hence more damage to be controlled. It was ineffective at the beginning, which was a blow to the shareholders. Although the company founder Akio Toyoda later sent out apologies and through the wall street journal expressed his commitment to reforming the company towards better and safe products with the aim of repairing the damage that had been done (Liker, Hoseus, & Center for Quality People and Organizations, 2008). The company through the court compensated the family that had lost their relatives through the accident. This was a step to convey the company’s acceptance of the guilt. Consequences of not addressing trust issues
Failure to respond to issues and address the remedies publicly can lead to severe disciplinary actions on a company. These actions may include its termination and payment of fine; Toyota Company due to its sluggish manner of responding to the claims against its products was fined $16.4million (Pelletier, 2005). This is because the company failed to warn its customers thereafter. Toyota accepted its penance.
Do you believe that the company’s reputation can be re-build, or will they suffer the consequences also in the years to come? Despite the tarnishing of Toyota Corporation’s reputation, the customers’ and investors’ trust will be rebuilt. The actions that the company undertook such as restricting the company’s management team and procuring a new safety system have seen the company rise to becoming once again among the most profitable companies in the world (Pelletier, 2005). The company is rebuilding itself since the 2009 failure. It has had numerous innovations and recently announced mass hiring of employees.
Bibb, S., Kourdi, J., & Bibb, S. (2007). A question of trust: The crucial nature of trust – and how to build it in your work and life. London: Cyan. Blackshaw, P. (2008). Satisfied customers tell three friends, angry customers tell 3,000: Running a business in today’s consumer driven world. New York: Doubleday. Liker, J. K. (2004). The Toyota way: 14 management principles from the world’s greatest manufacturer. New York: McGraw-Hill.Top of Form Top of FormLiker, J. K., Hoseus, M., & Center for
Quality People and Organizations. (2008). Toyota culture: The heart and soul of the Toyota way. New York: McGraw-Hill. Pelletier, R. (2005). It’s all about service: How to lead your people to care for your customers. Hoboken, N.J: John Wiley & Sons
Bottom of Form
Bottom of Form