Crisis Management in Social Media and Digital Age: Recall Problem and Challenges to Toyota

Abstract

Social media, such as Facebook and Twitter have added new meaning to spreading news and information. While the traditional information channels such as newspapers, radios, and TV, are one-way mediums, the dawn of the Internet and social media have made communication a two-way extravaganza. The lack of any official control, supervision, or regulation has fueled a social media frenzy, which has proved to be a very effective method of rallying around a mass on any significant or even not so significant issue. The recent banning of Facebook, and others alike, by certain governments is proof that social media cannot be ignored. Though authoritarian governments can resort to such drastic methods, public corporations cannot afford to do so. Corporations have no other way than to live with social media phenomenon -- either countering effectively, when a crisis starts brewing or suffering the consequences when it grows out of proportions.Under this light, it is interesting to explore how the recall-troubled Toyota has handled the social media and what options are available for Toyota in order to prevent the situation go out of control and harming the worldwide reputation it has strenuously built over the decades as a top quality auto maker.Toyota’s recall has exposed a bit of “digitization in automobile” industry as well. The digital technology in music and video industry, along with its exploitation by Apple using Internet and social media, basically pushed the old industry heavyweight Sony to the sideline. Could the same thing happen to Toyota? Can a new comer exploit the digitization in automobile, in conjunction with Internet and social media, to dethrone an established giant such as Toyota?