Takata Bankruptcy: Failure of Leadership or Innovation Gone Rogue?

Takata Corporation was a business-to-business firm based in Japan, whose logo once symbolized safety. In 2013, however, the company mishandled its airbag recall crisis, which was Japan’s largest automotive safety recall. The crisis led to the largest corporate bankruptcy filing of a Japanese firm and impacted Japanese banks involved in a collateral-free syndicated loan. How could the company have better managed the crisis?

This case is intended for undergraduate- and graduate-level courses on leadership, in a session on crisis management; a strategic management course, in a session on corporate bailouts; an organizational development course, in a session on crisis management; or a family business management course, in a segment on family dynamics and corporate governance.<br><br>The purpose of the case is to highlight how to effectively manage a business crisis by showing students an exemplar of a mishandled product harm crisis. Appropriate crisis management is a challenge, especially for family firms where the firm's reputation is bound to affect the family's reputation.<br><br>After working through the case and assignment questions, students will be able to<ul><li>recognize the challenges that organizational leaders face during major crisis situations;</li><li>identify the internal and external factors that contribute to a firm’s response during a product recall;</li><li>develop a crisis management plan; and</li><li>understand how corporate structure affects crisis management.</li></ul>

• crisis management, product recall