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NATIONAL ECONOMICS UNIVERSITYSCHOOL OF ADVANCED EDUCATION PROGRAMS-----oOo-----BUSINESS COMMUNICATION9.Group members: Class: Instructor: PhD. Le Thi Thu MaiTOYOTA VIETNAMAnd case study of Communication ProblemsAbstract The purpose of this report is to understand how communication problems illustrate...

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NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ADVANCED EDUCATION PROGRAMS -----oOo-----

BUSINESS COMMUNICATION 9.0 Group members: Class: Instructor: PhD. Le Thi Thu Mai

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TOYOTA VIETNAM And case study of Communication Problems

Abstract The purpose of this report is to understand how communication problems illustrated in real life. In Toyota Vietnam, lack of preparation for cross-culture workflow, non-alignment in the process of handling communication crises are the two main problems in their communication system that lead to unwanted consequences.

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TABLE OF CONTENTS Abstract....................................................................................................................2 I. Company Background......................................................................................5 II. Case 1: Toyota Airbag Incident........................................................................5 1. Descriptions of the situation............................................................................5 2. Reasons for studying this situation..................................................................6 3. Reasons for this situation.................................................................................7 4. Consequences of this situation (with evidence/facts/statistics/image).............. 5. Suggestion.......................................................................................................... III. Case 2: Lawsuit at Toyota Giai Phong.............................................................. 1. Descriptions of the situation.............................................................................. 2. Reasons for studying this situation.................................................................... 3. Reasons for this situation................................................................................... 4. Consequences of this situation (with evidence/facts/statistics/image).............. 5. Suggestion.......................................................................................................... IV. Lessons.................................................................................................................. Reference....................................................................................................................

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TABLE OF FIGURE Figure 1.1 Article about the first recall of the Corolla due to airbag fault in the front seats...........................................................................................................................6 Figure 1.2 The type and level of context in some countries......................................8 Figure 1.3 The percentage of Toyota Car Sales in 2018 and 2019..........................10 Figure 2.1 Article about customers being cheated at Toyota Gia Phong.................13 Figure 2.2 The five Rs in Business Communication...............................................15 Figure 2.3 Article about the response of Toyota Giai Phong...................................17

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I.

Company Background Toyota Motor Corporation could be a Japanese multinational automotive

manufacturer headquartered in Toyota City, Aichi, Japan. The corporate was a derivative of Toyota Industries, a machine maker founded by Sakichi Toyoda. Both companies are now a part of the Toyota Group, one of the most important conglomerates in the world. Its branch in Vietnam - Toyota Motor Vietnam Co. Ltd (TMV) is an automobile Joint Ventures founded in 1995. Total investment capital was based on the capital contributions from three major partners: Toyota Motor Corporation (70%), Vietnam Engine and Agricultural Machinery Corporation - VEAM (20%) and KUO Singapore Pte.Ltd (10%). Toyota was praised for being a leader in the development and sales of more fuel-efficient hybrid electric vehicles, starting with the introduction of the Toyota Prius in 1997. Despite its spot as one of the world’s largest automobile manufacturer brands, Toyota has had some certain communication crises that required a major repair. The following papers will illustrate two of these crises.

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Case 1: Toyota Airbag Incident

1. Descriptions of the situation According to Thanh Nien newspaper, in 2018, Toyota Vietnam had a plan of the first phase recall to check and replace the air bag assembly of the front passenger airbag. It included 16,964 Corolla cars manufactured (for the period from January 4, 2010 to December 29, 2012) in Vietnam. The reason was that the airbag assembly (supplied by Takata Company) could be exposed to the risk of moisture ingress over time. 5

Figure 1.1 Article about the first recall of the Corolla due to airbag fault in the front seats The nature of this problem was primarily internal to the company. In the first place, design managers forgot to inform their engineers to pay attention to the differences in biomechanical tolerance variation of different nations in their design, since people from diverse cultures hold different body figures as well. Therefore, some Vietnamese customers received cars with airbags having the design for the American and Japanese body figures, which increases the potential percentage of accidents caused by airbags. Indeed, there had been 16 deaths from this feature of their car by the time the first phase recall was held. Besides, another mistake was the inconsistency in internal communication. The lower managers deployed the employees to explain the cause of their recall, which was their incorrect airbags, to every single of their customers, while higher managers asked them to answer in a general way to the express like “there have been some little errors leading to unexpected sudden acceleration incidents.”

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2. Reasons for studying this situation When best practices in intercultural communication fail to deliver in today's global workplaces, team reality checks can serve as a sobering reminder of the many interwoven difficulties of international business communication. This case emphasizes practices and contrasts execution realities. Specifically, two of this intercultural communication case would be discussed. Firstly, it will highlight recommendations and strategies from a qualitative research study of accurate communication in the workplace. Secondly, it will reflect on the challenges and realities encountered (inconsistent communication) in putting the recommendations and strategies into practice. 3. Reasons for this situation While external communications have it on current and potential customers, internal communications have a strong impact and influence on how employees convey the messages top-down and inside-out.

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Intercultural communication problem (Chapter 3)

In this situation, an unexpected internal problem related to the difference between context arose and impacted significantly on the company's loss. Inconsistent communication in ideas, requirements, and product information leads to poor communication between headquarters in different countries.

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Figure 1.2 The type and level of context in some countries Multiculturalism in the workplace and the way of communication is not properly regulated from the top to the bottom are two major contributing factors. In order to prevent needless risks, it is important to have a careful preparation. To improve the internal communication department to be more cohesive and to develop a cross-cultural working strategy that works, those can avoid confusion and disengagement among employees as well as among customers.

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Lack of communication skills (Chapter 1)

The reason for that issue is the lack of communication skills in the workplace, which is in horizontal communication among managers at the same levels: Different departments in the organization. Before launching a product on the market, those departments need to communicate and work closely and consistently to ensure that the working process is on track and all product categories have been 8

fully prepared and ready for sale. But in fact, they worked very sporadically, inconsistently, and did not check the categories when receiving goods from the manufacturer and delivering to the agencies, that led to a severe problem. 4. Consequences of this situation (with evidence/facts/statistics/image) This incident has damaged Toyota's image with customers, especially loyal customers who have supported the product for a long time. The first impact on Toyota is that with this product, in 2018 Toyota Vietnam had a plan in the first phase to recall 16,964 Corolla cars manufactured in Vietnam to check and replace the air pump assembly of the front passenger airbag. The reason was that the airbag assembly (supplied by Takata Company) could be exposed to the risk of moisture ingress over time. It was the final decision after a long time Toyota faced communication issues with different stakeholders at the same time. Besides, because of these communication problems, consequently late product recall, this incident has affected Honda Vietnam's financial statement. In the next 6 months of business, Toyota recorded negative growth in sales. According to the research (Figure 1.2), in the first quarter of 2019, Toyota sold a total of 1,354 cars, down 15% over the same period in 2018 (1,592 million vehicles).

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Figure 1.3 The percentage of Toyota Car Sales in 2018 and 2019 5. Suggestion Due to the unexpected consequences, this problem seems to be an expensive lesson for Toyota, especially in the way of communication that needs some notes to address. First, it is vital to take extra time to test every practical alternative to be safe. Any alternatives or step in the process of safety checking must be strictly censored through each stage. From that background, the quality of solution can be evaluated exactly, helps Toyota have careful preparation when safety cases arise. Besides, local dealers are the spokesperson for the company. All information about safeness and automobile machinery must be transparently and honestly communicated to customers. Deviation can happen in manufacturing but through analytics, Toyota may process the data, capture those problems and act in a faster pace. Moreover, the CEO of the company needs to report right away to the management. When the problem arises, verifying what happened and 10

understanding the root causes, in addition to specifically and accurately pointing out the erroneous information, is one of the prerequisites to reduce the severity, that partly can address the internal conflicts in Toyota. Finally, to ensure the best quality for consumers, organizing safety training sessions for all company employees is concerned as an effective way. Because if those training sessions are processed, Toyota will have a reduction in downward and upward problems as well as inaccurate information.

III.

Case 2: Lawsuit at Toyota Giai Phong 1. Descriptions of the situation

According to VNExpress, in 2008, a salesman of Toyota Giai Phong named D.T.H received many billions of Dong from customers and then disappeared. It caused nearly twenty victims to come to this head to ask for that person and their cars. Specifically, the victims in this fraud said that there was a request to identify Toyota Giai Phong Joint Venture Company as the defendant civil in the case of D.T.H - the salesman of this company used to take more than 4.2 billion VND from 18 customers. On January 30, 2008, a tense atmosphere enveloped the Toyota dealership on Giai Phong street - Hanoi. Nearly twenty customers gathered here to demand that the company be responsible for a salesman of Toyota Giai Phong (TGP) who cheated more than 4 billion VND to buy their car.

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Although dozens of customers were incredibly angry and persistently stayed at TGP’s headquarters, it was not until the afternoon of February 1, 2008, that the leaders of this company agreed to meet. However, the meeting between the company's representative and the customer did not bring any results, but it also caused more frustration for customers when frankly shirking responsibility. Even the company's legal representative "reprimanded" the customer for "why come here to buy a car" and stated that "I don't know if Mr. H is an employee of the company or not" while the general director The company admitted that “until the morning of 01/02/2008, Mr. Hai was still an employee of TGP.

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Figure 2.1 Article about customers being cheated at Toyota Gia Phong After that, the last meeting on 19/3/2008 between 13 customers and representatives of TGP did not come to an agreement. After about 30 minutes of talking, the customer left and declared that there was no chance for further negotiations, so they were ready to sue TGP to court. TGP stated in its response to customers that they decided to advance financial support for customers. On the other hand, the problem is that this head did not specify the exact amount of financial aid would be provided and in what form. “We have to wait for the investigative agency's conclusion,” they replied. Many consumers were bored of detour explanations and demanded that TGP get directly

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to the point. After approximately a half-hour of pointless effort, they left. They claimed there was no more room for negotiation, and they would sue TGP in court. 2. Reasons for studying this situation In the complex context of today's society, the fraudulent appropriation of assets under the name of an employee of the company, resulted in several scandals and lowering the value of the business. On the eve of such developments, businesses easily encounter similar cases. But to solve them thoroughly, it is hardly to have a complete solution that makes co-victims feel satisfied. As a result, the purpose of this research is to highlight one of the incidents that brought a lot of notoriety to a big firm with up to 25 years of existence in Vietnam. Finding alternative methods to improve the steps which can preserve the business's brand would also strengthen to the pleasure with what co-victims received. Besides, communication with victims and the media should be prioritized, especially in severe instances. 3. Reasons for this situation

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Apologizing in the Digital Age (Chapter 9)

TGP's way of handling the case is a way beyond unacceptable. Since the last meeting on 19/3/2008 between 13 customers and representatives of Toyota Giai Phong did not come to an agreement, the customer left and declared that there was no chance for further negotiations, so they were ready to sue Toyota Giai Phong to court. However, no matter how serious the problem was, this agency did not even give a formal apology.

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Figure 2.2 The five Rs in Business Communication According to apologizing in the Digital Age theory, TGP has failed to follow up the "Five Rs" model. They did not have remorse and restitution, that was considered as disrespect for the problem, as well as people whose problem need to be addressed. As TGP did not effectively communicate with the customers who met the issue related to the fraudulent appropriation of assets once, they were influenced seriously and sued to the court. From that case, it was highlighted that the importance of business communication in winning customer satisfaction must be focused and fully exploited. The ineffective way of communication in that situation makes the companies become unprofessional through the eyes of customers, that 15

can weaken TGP's position in the market. Soon, TGP may not be a perfect choice for customers who knew about the unwarranted event for trading products and services related to Toyota firm. In another word, that will obviously have an adverse effect on the TGP’s image of credibility and the business performance of this agent. Therefore, this case can help not only TGP but other companies to have more lessons on how to win customer satisfaction. 4. Consequences of this situation (with evidence/facts/statistics/image) After the undeserved events happened, TGP's reputation was strongly affected by customers' distrust of its employees. It is believed that the reasons were the poor human resource management and the laxity in product control. The trial panel found that Hai - an employee at TGP received and appropriated money from guests, which was understandable that he intentionally violated the company's regulations on cash management activities. Moreover, all relevant documents were written and signed by Hai, without the seal or signature of the company's leaders. Therefore, the trial panel considered that there were not enough grounds to request TGP to compensate customers for damages. Instead of that, TGP agency was just only required to overcome shortcomings in the operation process. On one hand, the last word at the trial of Hai is his apology to the victims. He also required TGP to be responsible for compensating the amount of more than 400 million VND that Hai had paid to that agency. In contrast, the representative of TGP still insisted that the fault did not belong to them. It could be seen clearly, TGP was also at fault in that situation due to the lack of skills in human resource management and the laxity in the way controlling products. After the end of the case, as it was mentioned above, customers’ trust in TGP was not completely stabilized. However, the fact that TGP leaders expressed their desire to support a part of the damage to resolve the customer's trust, without an apology, was unlikely to bring the expected 16

results. Thus, that decision of not apologizing customers for mistakes of TGP was not considered as a powerful solution in business communication.

Figure 2.3 Article about the response of Toyota Giai Phong 5. Suggestion In the second situation, we concluded some suggestion for TGP in outward communications with the public, specifically the customers:

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Firstly, in this case, Toyota should take action as soon as possible, which makes customers feel the company is on the customer's side. In fact, the late response puts the customers in the situation that they have the tendency to think that Toyota would deny all the responsibility. Consequently, they have to sue Toyota just because of the failure in Toyota’s way of communication. Meanwhile, prompt actions in this situation could not only relieve the anger of the customers but also gain back the trust from them. However, in some special situations, the decision is too hard to make promptly, hence, the communication is delayed many times. It is necessary to give the customers the specific deadline with the promise to answer their questions on time will totally gain customer trust. In the second place, customers are always looking for direct responses rather than general ones. Hence, the advice for Toyota in such situations is that before giving out any announcement to the audiences, they should make sure that every single of their words is straight to the point. Double checking is highly recommended, so that the answer is exactly what customers need, and it cannot be misled.

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IV. Lessons The two cases that occurred among the Vietnamese branches of Toyota bring about two valuable lessons for any further potentially communication problems for not only Toyota but also other corporations, which are:  Whenever a communication crisis happens, the cooperation must act consistently among all levels of employees. The image of any company mostly depends on what it tells and shows to the public. Therefore, all managers and their employees should be unified about their sayings.  Communication problems, especially those related to customers, should be taken with prompt and comprehensive actions. When it comes to customer service, speed is among the most crucial factors that build the customers' loyalty. Hence, make sure to be clear and precise in every response to ...