Reference no: EM131322229

Even though its name sounds decidedly Western, Bridgestone Corporation, one of the world's largest tire manufacturers, is a Japanese company through and through. To boost its market share globally and in the vital U.S. market, in 1988 Bridgestone purchased Firestone, a major U.S. tire company. At the time Bridgestone's Japanese leaders persuaded Firestone's CEO, John Nevin, to stay on and run the operation. Nevin's leadership style was blunt and straightforward, with little time wasted on subtleties. He also was wired into the local Nashville community where Firestone is headquartered. For instance, he was active in local civic organizations, served on several local boards, and regularly played golf with other movers and shakers. Senior managers at Bridgestone felt that his local contacts were very important and would add continuing value to the firm.

Nevin and his new bosses soon realized, however, that his leadership style did not fit the profile of what Japanese leaders are expected to do. His brash and often confrontational mannerisms quickly wore thin with his new colleagues because in Japan leaders are expected to be polite and reserved even though both sides seemed to make an honest effort to adjust. Nevin left the firm by mutual agreement in 1989 and was replaced by a Japanese executive from the home office. In 1993 this individual was rotated back to Japan and the position was assumed by Masatoshi Ono, a quiet and reserved Japanese executive who had been groomed by Bridgestone for a senior management position. Indeed, Ono was the prototypic Japanese executive-he kept to himself, made few contacts, and spent most of his time secluded in the home Bridgestone purchased on his behalf in an exclusive Nashville neighborhood.

For the rest of the decade Ono's quiet and reserved style worked wonders at Firestone. The firm began to gradually increase its market share year in and year out, primarily by becoming the major supplier to another increasingly popular business, Ford Motor Company. By the end of the 1990s Bridgestone/Firestone had become the third largest tire company in the world, trailing only Goodyear and Michelin. In 2000, however, disaster struck. Reports began to surface that many Firestone tires had a fundamental manufacturing defect, which could cause the tires to come apart under certain high-speed road conditions. The problem was especially acute for the Firestone Wilderness tires, which came as standard equipment on the Ford Explorer, the world's most popular sports utility vehicle. Within a matter of weeks Firestone and Ford were collaborating on one of the largest product recall programs in history.

Fixing the tire problem was only the beginning. Almost as soon as the recall started, reports began to surface that managers at Firestone apparently had known about the manufacturing problem for years but had chosen to do nothing about it. These allegations prompted a firestorm of outrage and recriminations; the press severely criticized the firm, consumer groups howled in outrage, and there was even a Congressional investigation. Throughout the ordeal, Ono remained stoic. He never appeared to get angry, depressed, or frustrated. He also did not apologize for the company's actions or accept any corporate responsibility for what had happened (other than recalling and replacing the defective tires). Jacques Nasser, his counterpart at Ford, took a decidedly different approach-he assumed personal responsibility for Ford's part of the recall, met regularly with the media, and was always careful to outline what Ford was doing to head off future problems.

Ono's behavior was in keeping with Japanese norms. Leaders in Japan are expected to remain calm, stay behind the scenes, and maintain a low profile. U.S. observers, however, only saw indifference and a lack of involvement, and for these Ono was roundly criticized. Finally, in October 2000 he took a step that is common in Japan but rare in the United States-he resigned from his position, symbolically accepting responsibility for his company's mistakes. He quietly left Nashville and few people even knew about it.

Bridgestone meanwhile had begun to recognize the magnitude of the public relations nightmare facing Firestone. Rather than dispatch another senior Japanese leader (who likely would have fallen prey to the same criticisms that had bedeviled Ono), the firm appointed a senior American-born Firestone executive, John Lampe, to take over. Lampe, who better understood what the U.S. public expected of a corporation in crisis, immediately held a news conference in which he apologized on behalf of the company and pledged to get the problems fixed as soon as possible.

Question 1. What went wrong? Imagine that it is a few years ago, before there was any trouble, and you are hired to design a crisis management system for Bridgestone in the U.S.What would you design and (equally important) how would you sell it to (explain it to) Japanese management?