Toyota Motor Corp. has grown tremendously in the last 10 years and currently boasts about $183 billion in annual sales. With relentless attention to quality, embodied in a global program called the Toyota Way, it has reached the very top ranks of automakers around the world. But after a recent series of embarrassing product recalls and the loss of its automatic “recommended” rating from Consumer Reports, Toyota is playing catch-up in the very area in which it has long prided itself—product quality. During two recent years, the company was forced to recall almost 4 million vehicles in the United States and Japan, prompting its president, Katsuaki Watanabe, to announce a “back to basics” approach for restoring Toyota’s once-enviable reputation. The tools to turn things around are already in place and have served the company well in the past. Most observers believe the company can retrieve its lock on quality by taking the right steps now.

1. Do you think Toyota is on the right track to restoring its reputation for quality? Why or why not?
2. What can you say about Toyota’s efforts to communicate about quality? Do you think it has been effective?
3. Which of Watanabe’s initiatives do you think will do more to restore quality throughout the firm—the naming of a new quality manager and establishment of a “Customer First” committee, or his “back to basics” plea to employees to focus them on their individual responsibilities for maintaining quality? Explain your answer.