In Japanese culture, making an apology is considered a significant social skill, but no matter how well-chosen the words are or how low the bow is, it might not be enough to survive the tough world of business.
If a company fails to properly explain how it plans to improve after making a mistake, it could further damage its image rather than repair its reputation.
The recent problems rocking Japan’s food industry — alleged cockroaches in instant noodles, vinyl and teeth in fast food — have only highlighted poor crisis management in a country known for tirelessly promoting a clean and efficient image overseas, corporate management experts said.
“What customers want to see (at a news conference) is not big guys of a reputable company bowing their heads in front of the public. They want to hear how they plan to improve safety of their products,” said Mitsunobu Ando, a consultant on corporate social responsibility.
The Wednesday news conference held in Tokyo by McDonald’s Japan was supposed to allay customer concerns about vinyl found in chicken nuggets and a tooth that appeared in its french fries. Instead, it turned into a typical example of poor crisis management, Ando said.
He said McDonald’s major mistake was that it failed to demonstrate transparency, a widely accepted aspect of corporate social responsibility.
“No announcement of constructive plans to improve their food safety, no apology from the top official, no revelation of the number of undisclosed cases, and no explanation of what was happening inside the company . . . these don’t satisfy customers,” Ando said.
At the conference, McDonald’s Co. (Japan) Senior Vice President Hidehito Hishinuma and McDonald’s Holdings Co. (Japan) Senior Vice President Takehiko Aoki said the decision not to publicize some of the “isolated cases” was justified because it judged them unlikely to occur in other outlets.
The cases include one from last August that was not announced until Wednesday, in which a human tooth was discovered in an order of french fries purchased in Osaka. The executives said the company considered the case closed in September because it apologized to the customer without discovering how the tooth got there.
McDonald’s Holdings Japan CEO Sarah Casanova did not appear at the conference as she was overseas. Neither did Eiko Harada, McDonald’s Holdings’ chairman.
Tatsumi Tanaka, CEO of risk management consultancy Risk Hedge Corp., said this was a critical mistake.
“This may send a message to customers and victims that the company does not take these incidents seriously and that they are not big enough for the president to explain publicly, or for its employees take it so seriously,” he said.
Ando also said Casanova should have shown up at the conference, even if it meant delaying or rescheduling it, especially at a time when it is trying to recover from last year’s chicken nuggets scandal, which was caused by out-of-date chicken supplied by Chinese food processing company Shanghai Husi Food Co.
“Risk management may not prevent incidents from happening 100 percent of the time, since some unintentional cases may be unavoidable and some cases may occur maliciously,” Tanaka said. “But companies can make 100 percent efforts in crisis management after an incident . . . by explaining specifically how they will prevent a recurrence.”
Yet Tanaka said McDonald’s Japan is not the only one to blame. Some companies tend to repeat their mistakes because they are unaware of how the emergence of social media has helped shift power from companies to customers.
Instant noodle manufacturer Maruka Foods Corp. has similarly been accused of bad corporate management: When a Twitter user posted a photo of an apparent cockroach in Peyoung instant noodles, the company asked that the image be deleted.
“Customer reports on social media may be a valuable whistle-blowing tool for the public to know if they are true, because they can prevent others from becoming victims,” Tanaka said. “Companies that regard those claims as troublesome may not be able to survive,” he added.