Rice U. expert: Takata ‘facing a crisis that may prove difficult to overcome’

EXPERT ALERT

David Ruth
713-348-6327
david@rice.edu

Jeff Falk
713-348-6775
jfalk@rice.edu 

Rice U. expert: Takata ‘facing a crisis that may prove difficult to overcome’

HOUSTON – (March 3, 2016) – According to the National Highway Traffic Safety Administration, 28 million vehicles from 14 auto manufacturers have been involved in recalls due to Takata’s defective air bags.

Credit: shutterstock.com/Rice University

Anastasiya Zavyalova, assistant professor of strategic management at Rice University’s Jones Graduate School of Business, said three characteristics of the recalls contributed to this situation becoming a nightmare for Takata. She is available to discuss the company’s crisis management woes with the media.

Zavyalova, whose research focuses on reputation management, explained the three characteristics:

* Severity of the consequences. “The consequences suffered by drivers and passengers of the vehicles with defective airbags are severe: 10 deaths and over 100 injuries. And, as many studies suggest, the more severe the consequences, the higher the market and customer penalties imposed on the company.”

* Inability to identify the cause of the problem. “Years after the first recall involving Takata airbags, the company still has ‘little clue as to which cars used its defective inflators, or even what the root cause was.’ Without conducting an internal investigation and identifying the cause of the problem, the company cannot assure its buyers (for example, auto manufacturers) that it has dealt with the issue. Such inability to address the key safety issues may have led to withdrawal by its key customers, including Honda and Toyota.”

* Pattern of unethical decisions. “Perhaps, the most important characteristic of the scandal is how Takata tackled the warning signs. A report by the Senate Committee on Commerce, Science and Transportation suggests that the company had been aware of the defects, ignored warnings by its employees and ‘manipulated test data’ to appear compliant with safety standards. As such, the scandal was not a result of one bad decision, but a consequence of a ‘pattern of deceit at Takata that continued long after the severity of the airbag defect came to light.’”

Bloomberg Business has reported that Takata’s key customers are switching their business to Autoliv Inc., Daicel Corp. and Nippon Kayaku Co., and Zavyalova said Takata is facing a crisis that may prove difficult to overcome. “Because of the severe consequences associated with the defective airbags, the company’s inability to pinpoint the underlying cause of the problem and the revelation of its unethical decision-making throughout the process, Takata may be facing a long road to recovery,” she said.

To schedule an interview with Zavyalova, contact Jeff Falk, associate director of national media relations at Rice, at jfalk@rice.edu or 713-348-6775.

Rice University has a VideoLink ReadyCam TV interview studio. ReadyCam is capable of transmitting broadcast-quality standard-definition and high-definition video directly to all news media organizations around the world 24/7.

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Follow the Jones Graduate School of Business on Twitter @RiceMBA.

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Related materials:

Zavyalova bio: http://business.rice.edu/Anastasiya_Zavyalova.

Jones Graduate School of Business: http://business.rice.edu.

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