MIT Sloan Management Review

to have been Toyota’s initial intention, and that passiv-ity and hunkering down made matters worse. Once a crisis breaks, affected companies have to come clean. There is no way around that. After much wavering in the beginning, Toyota finally seriously tried to come clean, and it combined this strategy with a “polish the halo” response. Due to the belated and initially botched response to the crisis, however, Toyota will have a hard time regaining its lost reputation.

Despite all the criticism, Toyota has a great advantage: It had built a favorable reputation and strong customer-brand identification before the crisis hit. Therefore, if the crisis is managed well going forward and, importantly, the technical fixes for the cars prove effective, Toyota has a good chance of recovering from the crisis. A survey conducted in February/March of 2010 compared the feelings of Toyota car owners about Toyota’s handling of this crisis with the feelings of owners of other makes of vehicles. Toyota owners, the survey showed, believed more strongly that Toyota appropriately handled issues with respect to the brake pedal recall; they were more likely to say they believed that this incident is an outlier. Also, Toyota owners did not believe they would be less likely to buy a Toyota vehicle in the future because of this incident, and they considered Toyota to be one of the most reliable automotive brands. 14

As this article has made clear, when facing a crisis, companies have a number of response strategies to choose from. It is essential that companies gauge the customers’ perception of the crisis correctly. As some of the examples in this article show, there often is a difference between how management sees a crisis and how its customers see it. Once the characteristics of a crisis are identified (e.g., its validity, its severity, identification of affected customers), a response strategy can be chosen. However, since crises are complex and dynamic, this framework is not a cookie-cutter solution, but a starting point to help companies ask the right questions and come up with effective communications to reduce damage to the brand.

Gita V. Johar is Meyer Feldberg Professor of Business at Columbia University’s Graduate School of Business. Matthias M. Birk is a consultant in a leading strategy consulting firm. Sabine A. Einwiller is a professor of corporate communication at Johannes Gutenberg University Mainz in Germany. Comment on this article or contact the authors at smrfeedback@mit.edu.

1. M. Maynard, “House Panel Says Toyota Misled Public on Safety,” New York Times, Monday, Feb. 22, 2010, sec. B, p. 5.

2. “Toyota Victim Recounts ‘Near Death’ Trip,” Feb. 23, 2010, www.cbsnews.com.

3. G.V. Johar, “Intended and Unintended Effects of Corrective Advertising on Beliefs and Evaluations: An Exploratory Analysis,” Journal of Consumer Psychology 5, no. 3 (1996): 209-230. 4. A. Roggeveen and G.V. Johar, “Perceived Source Variability Versus Recognition: Testing Competing Explanations for the Truth Effect,” Journal of Consumer Psychology 12, no. 2 (2002): 81-91. 5. S.A. Einwiller and M.A. Kamins, “Rumor Has It: The Moderating Effect of Identification on Rumor Impact and the Effectiveness of Rumor Refutation,” Journal of Applied Social Psychology 38, no. 9 (September 2008): 2248-2272. 6. S. Fournier, “Consumers and Their Brands: Developing Relationship Theory in Consumer Research,” Journal of Consumer Research 24, no. 4 (March 1998): 343–373. 7. R. Ahluwalia, R.E. Burnkrant and H.R. Unnava, “ Consumer Response to Negative Publicity: The Moderating Role of Commitment,” Journal of Marketing Research 37, no. 2 (May 2000): 203-214. 8. S.A. Einwiller, A. Fedorikhin, A.R. Johnson and M.A. Kamins, “Enough Is Enough! When Identification No Longer Prevents Negative Corporate Associations,” Journal of the Academy of Marketing Science 34, no. 2 (spring 2006): 185-194. 9. J. Sengupta and G.V. Johar, “Effects of Inconsistent Attribute Information on the Predictive Value of Product Attributes: Toward a Resolution of Opposing Perspectives,” Journal of Consumer Research 29, no. 1 (June 2002): 39-56. 10. S. Einwiller and G.V. Johar, “Preventing Damage from Accusations — The Case of WalMart” (presentation at the 36th Annual European Marketing Academy Conference, Reykjavik, Iceland, May 22-25, 2007). 11. G.V. Johar, J. Sengupta and J.L. Aaker, “Two Roads to Updating Brand Personality Impressions: Trait Versus Evaluative Inferencing,” Journal of Marketing Research 42, no. 4 (November 2005): 458-469. 12. W. T. Coombs, “Impact of Past Crises on Current Crisis Communications: Insights from Situational Crisis Communication Theory,” Journal of Business Communication 41, no. 3 (July 2004): 265-289. 13. Einwiller, “Preventing Damage from Accusations.” 14. V. Mittal, R. Sambandam and U.M. Dholakia, “Does Media Coverage of Toyota Recalls Reflect Reality?” Harvard Business Review blog, Mar. 9, 2010, http://blogs.hbr.org.