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Jun 29, 2015
By Ben Dipietro

The crisis this week involves Toyota Motor Corp.7203.TO -2.22% and its response to news that the highest-ranking woman executive in the company’s history was arrested in Japan on charges she tried to bring oxycodone into the country.

The executive, Julie Hamp, denied the allegations and the company said it was cooperating with authorities. The company’s president, Akio Toyoda, then held a news conference in which he supported Ms. Hamp but wouldn’t guarantee she would keep her job. The company’s offices in Tokyo were raided.

Using the statements the company gave and Mr. Toyoda’s comments, we asked the crisis experts to evaluate how well the company has handled the situation, where it’s shined, where it’s stumbled and what it should do next.

Daniel Laufer, head of the school of marketing and international business at Victoria University in Wellington, New Zealand: “When dealing with a crisis, companies need to consider key stakeholder concerns. In the case of Toyota and the arrest of its executive, Julie Hamp, two key stakeholders that are involved are foreign executives and the police. Toyota’s president, Akio Toyoda, did a good job in his news conference, however this crisis is in its early stages, and it remains to be seen how events will unfold.

“During the news conference, Mr. Toyoda mentioned that he feels like a parent toward Hamp, and believes she did not break the law intentionally. He also suggested the company may bear some responsibility for what happened: ”Maybe we didn’t have enough support to prepare her for her stay in Japan.” These statements are very important because the company is pushing to increase the number of foreign executives, and demonstrating that Toyota will support foreign executives in these types of situations will help with recruitment.

“Mr. Toyoda also took into consideration the concerns of another key stakeholder, the police, during his news conference. He mentioned that he does not have access to all the facts, and the company will cooperate fully with authorities during the investigation. In addition, not guaranteeing that Hamp will keep her job signals to the police that the company is waiting for the results of the investigation before drawing any conclusions.

“In terms of future actions, Toyota should be holding discussions with law enforcement about the situation, and preparing public statements for different scenarios. This will save the company valuable time, which is always in short supply during a crisis.”

Jennifer Janson, owner, Six Degrees: “Toyota’s guiding principles are well-established and steeped in history. They include honoring the language and spirit of the law, and respecting the customs and cultures of every nation. Julie Hamp’s arrest for allegedly bringing a significant amount of oxycodone into the country suggests that both of these values may well have been breached.

“I believe Mr. Toyoda has done the right thing in publicly acknowledging the issue, apologizing, updating people on the facts that do exist, and showing his unconditional support for an employee. He has gone one step further in claiming responsibility–-as the head of the company–-for the actions of his employees.

“In my opinion Toyota has handled the situation in textbook fashion-–being transparent, supportive and open-minded when it comes to the next steps. It has left little room for speculation on behalf of the media, and the resulting coverage has been broadly factual.”

Jolie Balido, president, Roar Media: “While Toyota’s news conference skimmed the surface and did little to address the key questions, the immediate response differs from the company’s approach years ago when hit with complaints of problems with cars. Back then, the newly hired President Akio Toyoda was criticized for a slow reaction.

“Mr. Toyoda opened by saying he does not have all the facts, setting expectations low upfront for information. While better for Toyota’s image than no response, it left the public wanting obvious answers. Did she have a prescription? Why were 57 pills mailed in this manner? How will this affect her employment?

“The parent-child analogy and the statement ‘maybe we didn’t have enough support to prepare her for her stay in Japan’ seem like attempts to downplay serious concerns. Stronger messaging that Toyota takes law abidance seriously and will take appropriate actions based on the investigation should have been included.

“Like it or not, we cannot expect Toyota to divulge more facts now. Companies have confidentiality and privacy rules. But until the public has the facts, the jury will be out. Toyota should try to stay ahead of this by coming out as soon as possible with stronger messaging that addresses the core issues and concerns.”