Crisis Management Essay Example | Topics and Well Written Essays - 1250 words

Crisis Management - Essay Example Reputation has now become a ticket to success because it is what earns revenue. A good reputation is built when the company conducts itself in a way it is expected to. Reputation is build and maintained through communication (Coombs, 1995). The accounting theory creates assumptions, methodologies and frameworks that businesses should use when applying the financial principles (Benoit, 2000). This aids in providing information that is objective, reliable, timely, clear, consistent and comparable. It is necessary to provide this information so that the stake holders, namely trade creditors, financial creditors, employees, shareholders, trade unions, the present and the current investors, can make decisions based on that information. The information released is not only used for outsiders, but it may also be used internally in order to correct the things and decisions that are wrong. In this sense, this accounting theory informs the discussion of this paper by emphasising on the importa nce of information and communication in decision making. A crisis is that unfortunate situation that has created a threat to an organisation and its clients, and the organisations' management has to respond to the ongoing threat (Hooghiemstra, 2000). Action has to be taken otherwise the problem was not a threat to be categorised as a crisis. The structural functional systems theory provides some insight into crisis management. It emphasises information flow in an organisation through patterns called networks. It implies that companies with rich communication channels that are clear are able to handle crises better than those who do not. The diffusion innovation theory informs the theoretical framework of this study by providing and describing that innovation is disseminated and communicated only through certain channels over a period of time making consistency of essence (Benoit, 1995). The Case Context This study will examine a case where there was a crisis and how well, or otherwi se, was it handled. The case chosen is that of Toyota crisis of 2010 involving faulty accelerators and braking systems. On 29th August 2009, a police patrol officer Mark Saylor was cruising down the highway at well over 100 kph when he realised that the breaks were not working and that the accelerator was stuck in. It finally ended up crashing on another car killing four people. This was the onset of this crisis as several other accidents followed in that month up to the end of the year before the Toyota Company decided to recall all the Toyota models that had been affected by that defect (McDonald, 2010). Data It is only after a hyped media reporting that Toyota came out publicly to admit that there was a problem. This was in January 2010, and 34 drivers had already lost their lives. It was clear that Toyota was in a crisis, and it owed it to its customers and the society at large to take action. It therefore, took the high road action of recalling more than 16 million vehicles wor ldwide with 10 million of those being in the US (Bensinger, 2010). At this time, the crisis was already at an advanced stage but Toyota being a market leader in Automobile manufacturers had its image, identity and reputation at stake. The only available measure was to hold a press release in which they were to admit that there were vehicles that were manufactured at a certain period of time and had unintended accelerators and faulty breaking system (McDonald, 2010). On February 1 2010, Jim Lentz, Toyota’s CEO in America held a press release meeting on behalf of Toyota’