Toyota fiasco a wake-up call for Japan's companies

Did you see the "president of Toyota" appear on Letterman and apologize? Classic! Wouldn't surprise me to hear that the peeps on 2chan rant about this.

http://www.youtube.com/watch?v=Te3T60ryDYA

It is the combination of a vertical society in which the elite become progressively more removed from the real world, control obsession and paranoia by the few at the top that as a result stifles initiative or critical thinking by subordinates who are on the working end of the stick, and until now, an old'boy culture of government and judicial system that could shield big companies from harm resulting in hubris, these systemic flaws have been developing for decades and are rife in the society. These problems are not flukes, they are formula. Now at the peak of the baby-boomers hitting retirement, there is not a trend towards reform, but just the opposite, desperation to hide problems long enough to escape responsibilities and consequences. Toyota will not be the end of this. It will be for the few enlightened companies, lead by head-strong original thinkers savvy about the real world, that will take leadership in Japan's international markets... as long as the old'boys don't squash 'em.

Toyota moving foward...even if you don't want to.

Very good article. Shows that the expertise does exist in Japan and that the Panasonic example was available as a case study on how to handle a crisis. Didn't matter really, the Toyota culture of denial caught up with them.

Japanese companies being #1 companies worldwide seems to have hit a cultural wall.

Good article ! The corporate culture is more about reacting that being pro-active.

It may be glaringly obvious, but much of this Japanese management lack of awareness of foreign concepts of leadership and/or crisis management has got to be rooted in its totally insular culture, and lousy foreign-language skills. Senior managers here in Japan don't read the Financial Times or watch Bloomberg/BBC/CNN like most of their foreign colleagues do. They are too busy following Japanese management cultures -- heavy on socializing. As a result, they don't have a clue about what it truly means to be a "multinational" company. It is not simply selling Japanese products overseas.

Hell yes, look at all the Japanese food company scandals, the Japanese government wouldn't even release the names of 400 companies that were using old products and unsafe food.

I have just read that Thai Airlines will delay the operation of three brand-new Airbus and Boeings, an A380 Airbus among them, due to false data on safety provided by the Japanese manufacturer of airplane seats, based in Yokohama, that could lead to fatal accidents inside the cabin even if the body would stay intact in an emergency situation.

Considering many companies, including Toyota brag about being Six Sigma management companies, it would be wise for them to maintain the highest level of quality.

Let local management run the international subsidiaries. Listen to them. That alone should solve a of of problems.

"If they hope to succeed overseas, Japanese corporations"

As if no Japanese corporation has ever succeeded overseas.

operating in a way that was understood in Japan

Ignoring the problem and hoping it goes away

what japan needs - leadership (not the kind that every just gives into authority), transparency and real crisis management.

never happen

with multi-national licensed attorneys

see above

The Japanese were great at improving other countries technology after WWII, but they failed to adopt the countries business culture especially in the States when doing business in America. They failed to recognize the American market and the consumers wants and need are different from their counterparts of the Japanese consumers in some business industries. In some other cases like the American anime industry, the Japanese anime companies failed miserably and had to closed their door within 1-2 years. The Japanese lack of American business knowledge and too much Japanese culture way of doing business is what hurt their inability to be profitable. I am not surprised at how badly Japanese companies (Toyota) failed when it matter the most in America.

The Japanese companies need to think outside of the box and get off the soap box.

@elbudamexicano, "America the land of lawsuits! Thank god for good, decent hard working lawyers!"

The lawyers are the only winners in any lawsuits on both sides. ;-)

It's not so much about paying off because it happens both in Japanese and American businesses due to the lack of moral. The Japanese companies need to take courses in American business marketing, PR, and ethics to learn about the American business market side in order to not do like what Toyota did with the recall. Along with that hire a team of lawyers like most big American business do.

Some great examples the Japanese companies should be looking to for advice would be foreign companies that do business in Japan. I believe if the foreign companies didn't adapt and adopt Japanese way of doing business in Japan they would have closed their doors a long time ago and went home.

A wake-up call for J-companies - indeed. Keep on dreaming.

Japanese corporations were nurtured in a remarkably business-friendly society where consumer activism is undeveloped and lawsuits uncommon.** Boy oh boy oh boy!!! The most understated statement of the century! Japan is bending over backwards to get bribes etc..from Toyota etc..while in America Toyota will have to just bend over and let all the hungry lawsuits welcome them to the real American way! Welcome to America amigos from Toyota! America the land of lawsuits! Thank god for good, decent hard working lawyers!

Unjust profits come back to haunt the companies.

How about hiring Dan Webb (Winston & Strawn) like Philip Morris did?

I don't think you can eliminate mistakes. The article is mostly talking about how you handle them after they happen. That's probably winning half the battle. The article mentions Panasonic, most business case studies look at Tylenol in the 80s.

In Japan’s harmony-loving society, conflicts—when unavoidable—are generally settled behind the scenes.

I think we all know the meaning of this - paying off government officials to keep it quiet. I guess Toyota found out that it doesn't work that way overseas.

It's not just crisis management that Japanese companies need. They also need to respect the laws of the countries that they do business in. The former lawyer for Toyota who testified before the US congress said that Toyota has no regard for law, hiding evidence of safety failures during litigation.

Article at: http://abcnews.go.com/Blotter/congress-blasts-toyota-withholding-key-evidence-secret-books/story?id=9957579

You just can't make faulty big ticket products anymore --> there is just way too much internet talk these days and people research their choices before purchase. Toyota made a big mistake like GM did in quality years ago.

Now you have Toyota offering 0% for 5yrs on their cars. -that's a very good deal right now and will cost Toyota $$$ http://money.cnn.com/2010/03/02/autos/toyota_incentives/

As a company you just can't make these big catastrophic type mistakes anymore. What's even worse is a problem that continues -the problem must be fixed 100% immediately or your company will suffer. I expect Toyota to suffer 2-3yrs for this mistake.

Good night call, if you can't supply safe and sound (quality) goods overseas.

what japan needs - more legal staff in larger legal departments with multi-national licensed attorneys

what japan needs - leadership (not the kind that every just gives into authority), transparency and real crisis management.