Saving Face

Corporations, like people, are all about maintaining a good public image. They want to be seen as reliable, trustworthy, and even generous. Our impressions of these companies influence what products we buy and what brands garner our loyalty. Establishing a positive reputation in the market takes a very long time, yet  these hard won images can be dismantled instantly. Can companies bounce back from bad publicity to regain their former reputation? Toyota stockholders are anxiously waiting to find out.

Problems with the floor-mats in several Toyota models occurred in 2007 and 2009, and in early January of 2010 the company began to recall millions of vehicles for faulty accelerator and brake pedals. Recalling and repairing vehicles as well as dealing with impending lawsuits represents a huge financial blow to the company.

Additionally, Toyota must deal with the damage to the company’s reputation that will likely influence profits well into the future. Customers loyal to the brand may reconsider purchasing a Toyota because its reputation as a maker of efficient, reliable, and safe vehicles has been threatened.  The connection between good corporate image and profit is undeniable (Roberts & Dowling, 2002). Research suggests that restoring consumer trust after negative publicity involves a calculated use of informational, affective and  functional strategies to influence attitudes about corporate competence, benevolence, and integrity. Affective initiatives were shown to be more effective in repairing corporate image with regard to benevolence and integrity while informational strategies were more effective for attitudes about competence (Xie & Peng, 2009). Toyota still has the opportunity to rebuild their image and retain customer loyalty. According to a report by the Financial Post yesterday Toyota customers have not jumped ship yet. Resolving the recall issues and recovering from them depends not only on financial reparations but also on restoring the positive image that made them so successful in the first place.

Roberts & Dowling (2002)

Xie & Peng ( 2009)

After recall, Toyota customers not buying from anyone

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