Was the Toyota recall an engineering problem? Definitely. But the reason it has become such a media feeding-frenzy is because of failures by the management and public relations people at Toyota. Professor Daniel Diermeier penned an excellent explanation of these failures for BusinessWeek last week.

This situation escalated because of what the company didn’t do early on—which was try to rebuild trust. And there are different aspects to that. Take transparency, for one. That it took 10 days for the president to deal with the issue and that it was originally in the hands of the U.S. head of sales sends the message that there isn’t the right level of accountability.

Toyota has to re-establish the belief among customers that quality is the most important thing for the company.

The whole article is good, I highly suggest reading it. Prof. Diermeier accurately pinpoints the problems Toyota has had, not with engineering, but with their reputation management strategies.

http://www.businessweek.com/managing/content/feb2010/ca2010029_503075.htm