...Case Analysis Report In August 2000, Ford Motor Company and Firestone Tire Company recalled 6.5 Million ATX and AT tires that had been installed on Ford’s Explorer model SUV. At the time, it appeared as though Ford and Firestone were doing the right thing. They had found out that the tread separated on Ford Explorers in states with intense heat, such as Florida and Texas. However, it later came to light that both Ford and Firestone had known about these problems earlier than 2000 and that Ford had even had a similar recall in 9 countries the previous year. Firestone however had disagreed with the recalls prior to 2000. Many of these countries were in the Middle East where temperatures are frequently in excess of 100° Fahrenheit. The Stakeholders There are numerous stakeholders in this case some, such as Ford and Firestone by not being forthright with the consumer had a lot to gain and others such as the consumers had a lot to lose. Ford Motor Company Ford Motor Company is one of the largest stakeholders in this case. They had the most to gain from selling the Explorers and not publicizing the potential problems with Firestone tires. By issuing a recall, they would lose both money and customers if the public thought their SUVs were unsafe. My problem with Ford is that they knew that there was a problem with the Ford Explorer before it went into production. Ford engineers recognized that by using the larger P235 tire, there was a potential for more rollovers...
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...* How and why is it important for businesses to engage with the media during a crisis? What strategies are successful in external communications for business during such times? Compare & contrast two news stories which centre on a crisis for different businesses giving detailed analysis of each communications strategy. This Essay will begin by reviewing crisis definitions and message strategies. Next it will explore translation strategies used by organisations involved in a crisis to communicate with stakeholders. The essay will then consider Ford–Firestone’s tire failure crisis of 2000 as an example of poor crisis management, and contrast toy maker Mattel’s recall crisis of 2007 as an example of successful crisis management. It will first lie out the rhetorical context of each case before embarking on a detailed analysis equating the effectiveness of both firms’ external communications, and in the case of Ford-Firestone, how these might have been alternatively approached in order to avoid detrimental reputational damage. * Fink (1986, from King, 2000) defines an organisational crisis as ‘a situation that can potentially escalate in intensity, fall under close government or media scrutiny, jeopardize the current public image of the organisation or interfere with normal business operations.’ Pearson and Mitroff support this in their ‘five dimensions of a crisis’, explaining that the situation will be ‘highly visible, require immediate attention, have a surprise element...
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...Ford and Firestone Controversy Centuries ago Ford Motor Company and Firestone Company developed the perfect collaboration and built a strong and wealthy business relationship in which Firestone manufactured tires to be used on Ford’s motor vehicles. Unfortunately, this relationship came to a screeching end after a fatal crisis began around 1999 in which Ford Explorers equipped with Firestone’s Wilderness AT, radial ATX, and ATX II tires caused a series of serious fatal accidents. When the treads of these wheels peeled off the casings vehicles going at highway speeds would enter into ghastly rollover crashes. Although the root cause of the crisis that occurred remains an overall mystery, Ford Motor Company and Firestone Tire Company both act as examples of two organizations in violation of business ethics and further illustrate how ones disregard to act in compliance with ethical and lawful actions, especially in the business setting, is simply not acceptable and could lead to catastrophic consequences in the end. Ethics, which deal with personal moral principles and values, and Law, which deal with societies values and standards that are enforceable in the courts, are leading factors that play huge roles in the day-to-day business environment. According to the Ethical/Legal quadrant provided in the Marketing textbook by Kerin, both Ford and Firestone clearly fall within the unethical/illegal section, due to the fact that both displayed in their actions a blatant disregard...
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...take-over’s, down-sizing, mergers, joint ventures etc. as companies try to grow. Some companies focus on the question “what do we do to make our company grow”. “How many employees are we going to affect?” Let’s focus on my former employer Ford Motor Credit. Their thoughts back in 2003 was total quality is a way of life. This was the main strategy in order to bounce back financially, and to gain their credibility back. A. The strategic change initiative allows us to focus on four areas. a. Initiate Effort or gathering support b. Launching or agreeing on an approach c. Executing or doing what it takes d. Gaining Momentum or communicating results APPLICATION ANALYSIS: The Company of Focus in this analysis is Ford Motor Credit. There was a point and time when Ford had lost its credibility with the many Americans. There were many lawsuits against the company. There was an ongoing issue with the firestone tires that were put on each Ford SUV. The claims were that the tires blew out and caused many deadly accidents. Ford had to adhere to the lawsuits but yet still run the multibillion dollar company. How do you do that with thousands of employees? Downsize is the first thing and then reorganization. Ford cut many jobs and relocated hundreds of employees and offered early retirement for some. Our call center which housed collection personnel, payment processors, title management personnel, lost prevention, skip tracers,...
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...Firestone Case Study Robert Workman Jessica Jurkowski Michael Wilding Webster University Firestone Case Study BACKGROUND In 1900 Harvey S. Firestone established The Firestone Tire and Rubber Company, the company started with 12 employees. They started out by supplying rubber tires for wagons and buggies. In the 1908 Henry Ford and Harvey Firestone formed a partnership with firestone supplying tires for the new model T this was a natural relationship because they had mutual friends. (Noggle and Palmer, 2005) Today Firestone is known as Bridgestone/Firestone after the two companies merged in 1990 for $2.6 billion. Today the company markets 8,000 different types and sizes of tires along with other products. Firestone has had a substantial history of scandals relating to tire safety In 1978 Firestone recalled 14.5 million tires—the largest tire recall at the time—after excess application of the adhesives binding the rubber and steel resulted in 500 tread separations and blowouts. The company was also fined $500,000 for concealing safety problems. ("e-businessethics.com") However in the late 90’s Firestone would be put into serious jeopardy and be threatened with going bankrupt. The Ford Motor Company was started by Henry Ford in 1903 in Dearborn, Michigan producing only a few cars a day. Ford was the first company to use assembly line production and has grown into one of the largest family run organizations in the world In 1999 Ford had a staff of 360,000 employees...
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...Case 22 Analysis Firestone and Ford; The Tire Tread Separation Tragedy 1. What are the major and minor ethical issues involved in this case? The major ethical issue is Ford and Firestone’s negligence of the technical problems. They knew that something was wrong yet they did not do anything about it and therefore ignored their consumers’ safety and health. They used a utilitarian decision model where they were looking to accomplish the greatest good for the greatest number. Another major dilemma is that Firestone did not report deaths and injuries to the government and they were very reluctant to recall their defective tires even though it was clear that they were a danger to the consumers. In addition to this, Ford failed to inform that the Ford explorer had been recalled in other countries than the US due to danger. Another key issue is that none of the companies agreed to take responsibility of their products as well as their actions. Minor issues were the fact that the companies tried to cover the news and evidence to reach the public. Firestone had an issue with how they responded and dealt with the crisis. Firestone was also very ignorant with their manufacturing property in Decatur, Illinois. They did not take necessary actions to manage it properly. We can also see a problem in the way they handled the relationship between the two companies. Instead of working it out they had a corporate divorce that resulted in major damages for the both companies as well as...
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...Ford and Firestone Case Study Safety issues involving Firestone tire tread separations specifically on Ford Explorer SUV’s and resulting vehicle rollovers were brought into the public’s view in early 1998 as a result of several tragic accidents. Tire tread separation photo, Associated Press, 2000 One accident involved a junior high school girl named Jessica LeAnn Taylor from Mexia, Texas. Jessica was a passenger in a Ford Explorer with Firestone tires, during the accident the tire peeled off and forced the vehicle to lose control and proceed to roll. This young girl died from complications caused during this accident. Another accident involved a Ford Explorer driven by Victor Rodriguez from Laredo, Texas. The Firestone tire shredded off while Victor was driving. His car flipped and Mr. Rodriguez’s 10 year old son Mark Anthony died at the crash site. On February 7, 2000, Anne Werner, a reporter at KHOU-TV, in Houston, TX, introduced Cynthia Jackson, who described how her husband of a year and a half had died and how her own legs were amputated above the knee because their Ford Explorer fitted with the original Firestone Radial ATX tires flipped after the front tire came apart1. Firestone later reprimanded Robert W. Dechrd, CEO of A.H. Bello Corporation (owners of KHOU) and Peter Diaz, President and General Manager of KHOU, for airing the story which, according to them, “contained falsehoods and misrepresentations that improperly disparage Firestone and...
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...manufacturers have had controversies involving the use of their tires. Firestone had their controversy with the Ford Motor Company, while Michelin had their controversy in the racing world. Each manufacturer had legal battles, but only Michelin realized the fault in the company tires and deemed them unsafe for use. Automobiles have long since been a major part of our society and for the vast majority of the world. The automobile might be one of the greatest inventions ever, but what is the most important feature of the automobile that is actually in contact with the ground? The answer is simple, the tires. The tires that we think of today are pneumatic tires, meaning that air is enclosed in the void area between the inside of the tire and the wheel, thus reducing vibration and increasing traction. The first pneumatic tires were used on bicycles, not on cars, but that same technology would come to be a major part of the automotive industry. Since their early uses, there have been safety concerns for tires. This prompted many tests ensure the safety of the product. There are countless numbers of tire manufacturers. For example, alphabetically there is Avon, Bridgestone, Dunlop, Firestone, Goodyear, and Michelin, just to name a few. Two of those manufacturers, Firestone and Michelin, have both had major controversies surrounding the use of their tires. Firestones controversy was with the Ford Motor Company in the everyday world, while Michelins was in the Formula...
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...On August 9, 2000, Bridgestone/Firestone Inc. announced it would recall more than 6.5 million tires, most of which had been mounted as original equipment on Ford Motor Co. Explorers and other Ford light trucks. Bridgestone/Firestone had become the subject of an intense federal investigation of 46 deaths and more than 300 incidents where Firestone tires allegedly shredded on the highway. The Firestone tires affected were 15-inch Radial ATX and Radial ATX II tires produced in North America and certain Wilderness AT tires manufactured at the firm's Decatur, Illinois, plant. This tire recall was the second biggest in history, behind only Firestone's recall of 14.5 million radial tires in 1978. The 1978 tire recall financially crippled the company for years to come and the August 2000 recall threatened to do the same. Consumers, the federal government, and the press wanted to know: Why didn't Ford and Firestone recognize this problem sooner? Let us look at the series of events surrounding the tire recall and the role of information management. 1988---Financially weakened from its 1978 tire recall, Firestone agreed to be acquired by Bridgestone Tires, a Japanese firm. To increase its sales, Firestone became a supplier of tires for Ford Motors' new sport-utility vehicle (SUV), the Explorer. March 11, 1999---In response to a Ford concern about tire separations on the Explorer, Bridgestone/Firestone (Firestone) sent a confidential memo to Ford claiming that less than 0.1 percent of...
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...Pre-Analysis: A. Perspective: 1. Describe the perspective of the author(s) of the case study and the possible biases that might result from that perspective: The author, Archie B. Carroll is professor at University of Georgia. He may neither work for any company nor be a significant decision-maker in a company. Therefore, he analysis and perspective may different from perspective of important decision-makers. Since he is a professor, he may not know much about car and tire and the difference impact of different tires on different car. He may be a loyal customer of Ford, so he may bias toward Ford and give favorable information and perspective for Ford. 2. My perspective as the analyst: Ford is one of my favorite brands because of its bold image. Therefore, I may be more interested in favorable facts and deny negative numbers of Ford. I don’t know much about automobiles, so I may not understand the consequences of tire tread separation when driving. B. State what you are bracketing: They would do bad things to lower the costs of tire which led to tire tread separation. They would have blamed each other and their customers for their own fault. They would keep all customers’ complaint and lawsuit private from public. They would continue to use low quality tires. II. The Situation : A. List the facts relevant to the issue(s) identified: • The first lawsuit against Firestone was in 1991. • Lori Lazarus was trapped in her car and rescued later because...
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...Running head: Total Recall the firestone company recall of tires Total Recall The Firestone Company’s Recall of Tires Seth Jackson Current Trends in Electronic Management ABSTRACT This paper discusses the recall of Firestone Tires in the United States .and the relative complicity of Firestone, Ford Motor Company and its consumers. Because of Firestone’s knowledge of the tire defects and lack of action, fatal and critical accidents resulted from tires used on the Ford Explorer. Firestone chose, instead, to blame Ford and its consumers for the tires defects. INTRODUCTION In 1906, Henry Ford purchased 8,000 tires from Harvey Firestone, who began producing tires at a small factory in Akron, Ohio in 1900. The sale initiated a long, growing relationship between two eventual leaders in their respective industries. In a matter of just a few short months in 2000, a very robust business-to-business relationship, 100 years in the making, had been destroyed by a lack of communication, poor quality management, and the disregard of consumer concern were the rules surrounding ethics used in the ethical decision made from Ford or Firestone? How did the recall affect how everyone viewed and interpreted the entire tire manufactures? These are just a few of the questions we will discuss throughout this paper. Webster Online defines ethics as the discipline dealing with what is good and bad and with moral duty and what really stands out is the idea how one company...
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...5 4. Effective Management of information………….…………..…6&7 4. Communication Strategy………………………………..…...…8&9 5. Effective Crisis Management…………………………….………10 6. Public Relations steps…………………………………….………11 7. Product Recall…………………………………………………….12 8. Ikea Questionnaire………………………………………………...13 9. Conclusion…………………………………………………….…..14 10. Bibliography……………………………………………………...15 11. Appendices………………………………………………………...16 Introduction This report aims to investigate that public relations is an important business function to an organization. The research will examine public relations as an essential function of crisis management. The purpose of this report is to investigate that major organizations such as Johnson and Johnson, Ford and Firestone and IKEA, would use the corrective public relations strategies, to have a positive outcome on a crisis situation. The author will examine the different public relation strategies each company used to handle their individual crisis. In examining these strategies the report will analyze the impact these strategies had on the crisis. Executive Summary The report provides a study of the crisis...
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...Business Ethics Week 4 By Dawn Saffold Gary Gentry- Instructor Organizational Behavior Ford, Firestone/Bridgestone top corporate managers were convicted and found guilty of criminal negligence. A company in Decatur, IL was responsible for building defective tires that were used on Ford Explore Utility Vehicles. People were injured and in most occasions death occurred. The President and chairmen was, William C. Ford Jr., Jacques Nasser, Masatoshi Ono, and John Lampe. These men were responsible for the injuries and even went so far as to make an apology to the families of the victims that they did not mean. 6.5 million Tires were recalled back and 119 deaths and more than 500 injuries were caused by the defective tires and there was not a move made to remove them from the vehicles (Neidenberg, M. (2000, November 9). These men had no remorse for their actions; they deliberately allowed tires to be put on vehicles that caused death and injury to many customers. People in this economy trust the Ford, Firestone/Bridgestone companies to give them quality cars and quality tires. Firestone/Bridgestone admitted that their tires were no good after they were recalled. The two companies ended up fighting with each other, trying to blame each other for the damage because neither of them wanted to take the blame. Eventually the two companies parted ways, when it is clear that both of them are in fault (Neidenberg, M. (2000, November 9). The credibility of each company was highly questioned...
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...Minimizing Tort and Regulatory Risk In this essay I will explain how regulatory risks may be identified and managed through preventive, detective, and corrective measures for such torts as negligence, product liability and defamation. For most businesses such torts are better handled before they happen. Companies make sure many issues are addressed in the company policy and regulations manuals when new employees are hired as well as in training sessions for topics such as sexual harassment and safety. For a Company such as Firestone Tires and Rubber for example, one type of negligence could be Negligent Hiring. If an employee in a supervisory position verbally abuses another or in an extreme case, assaults another employee with a tire iron used in the performance of his duties, the victim could claim negligent hiring on the part of the company where they both were employed. This could be the case if the aggressive supervisor has had a history of this type of behavior at a previous place of employment. This begs us to ask the question: Has the company made enough effort to fulfill its obligation of providing a safe working environment for its employees? As it was touched on before there are measures that can be taken before something like this happens. For one, the hiring manager could have followed up on references to possibly find out if the candidate for employment has had a history of violence in the workplace, or perhaps public criminal records...
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...14: Stockholder Rights and Corporate Governance Inland Bank; Cisco (Niihka) Inland Bank and Cisco case assignments (Niihka) Class Two Owners continued Living Richly (text, pg. 236); Adelphia (Niihka) Adelphia case assignment (Niihka) Week of Sept 7 Class One Labor Day – NO CLASS ClassTwo Forms of business; Intro to Business Processes “Forms of business” excerpt (Niihka); Ciao Baby Pesto case (Niihka) Baby Pesto case due Week of Sep 14 Class One Customers as stakeholders Text Ch 15: Consumer Protection Read Guns Excerpt Odwalla case due Class Two Read Chapter 3 Timberland case due Week of Sept 21 Class One Suppliers as stakeholders “Intro to Supply Chain Management,” excerpt from Handfield (Niihka) Class Two Suppliers cases Beech Nut (Niihka); Ford and Firestone (Niihka) Ford and Firestone case assignment (Niihka) Week of Sep 28 Class One First Exam Class Two The community as stakeholder Text Chapter 18 Corporate Philanthropy vs. Corporate Social Responsibility; Corporate Philanthropy and the Arts (text) Corporate Philanthropy and the Arts case assignment (Niihka) Week of Oct 5 Class One Employees as stakeholders Text Ch 16: Employees and the Corporation Text Ch 17: Managing a Diverse Workforce Class Two Employees continued Dukes vs. Wal-Mart Stores No Smoking Allowed case assignment (Niihka) Week of Oct 12 Class One What is Context? Why is it important to...
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