 |
|
|
Biggest corporate scandal in Japan
Largest recall in global automotive industry
Intensive crisis management over many months
Importance of cultural adjustment
Special case: international media
Rebuilding reputation and business
|
|
|
|
|
|
|
In March 2004, one of Japan's leading truck makers was hit by revelations of what would develop over the next 12 months into one of Japan's biggest corporate scandals ever. During the 1990s the management had systematically hidden vehicle defects which eventually led to a number of accidents, including two that resulted in fatalities. In 2003, a German automotive company bought a substantial share of the firm and appointed a German as its president. Accordingly the German top management had to take the blame for the shortcomings of the previous Japanese management. In addition, the new team had to implement and steer a clean-up process, uncover and correct hidden past issues, and implement a new quality system and a new corporate culture that would prevent any future reoccurrence. CNC was involved from the beginning as the main,advisor handling media and governmental relations as well as internal communications with the employees.
After completely uncovering all past quality issues the company decided to embark on a comprehensive repair campaign implementing recall and service campaigns for about one million vehicles in Japan. This figure represented about 70% of all still registered vehicles that the company had ever sold and thus reached a scale unprecedented in the global automotive industry. It was judged to be the only viable option to ensure a survival of the company, which had become a target of a public outcry and harsh criticism.
Crisis management and crisis communication began when a fatal accident was linked to a vehicle defect in March 2004. Over the next six months damaging media reports appeared on an almost daily basis, often as the top news. As the truck maker had once belonged to one of the largest and most conservative Japanese industrial conglomerates, some media made it a scapegoat for general criticism of corporate governance and inward-looking cultures in traditional Japanese companies. Some accusations culminated in denying the company its right as a corporate citizen and called for a termination of the business altogether. Business survival was threatened until 2005 by various ministry directives including substantial delays in the approval process for new vehicles (homologation), thus denying the company the ability to even conduct ordinary operations.
The company was forced to issue a large number statements to the press and the transport ministry, to hold nearly 50 press conferences (sometimes running up to five hours) in Japan, to deal with international media and to install proper employee communications. CNC was directly involved in all stages often directing key processes as well as drafting and delivering key statements on a daily basis as well as developing an overall long-term communication strategy.
Although the new Western top management gave credibility to the initiated clean-up process and helped to convince critics ,language and cultural differences between Japan and Germany, coupled with different shareholder interests, made coordination of communication measures. CNC assisted in bridging these gaps often walking between the different camps and explaining the needs and perspectives of one group to the other. This helped to speed up decision-making and to decide for the right measures in the Japanese cultural environment. Such cultural requirements included among others specific apologies including bows but also a presentation and reporting style fundamentally different from Western countries.
CNC was also engaged in dealing with German and international media. These media regarded the matter from its business and financial implications for the German mother company rather than focusing on the underlying questions of corporate culture as their Japanese peers did. Hence a specific international media strategy with different activities and key messages was implemented reducing the negative outfall of this scandal to a minimum overseas where the truck maker even managed to increase its sales in 2004 and 2005.
In addition to the daily crisis communications, CNC was advising on a long-term reputation rebuilding program with a clear definition of measures and milestones. First major steps have already been implemented successfully two years after the outburst of the crisis in March 2004. This reputation program encompasses all communication levels from media relations, corporate advertisement and marketing, employee communications, government and other external relations. The activities carried out have achieved a change in the public perception of the company from very negative to neutral and in parts even positive. The survival of the business is no longer in doubt. The trust of the Japanese customers has returned, resulting in a rising market share again in the first half of 2006.
|
|
 |
|
|