On April 12, 2022, a devastating mudslide covered 87 hectares of the Toyota South Africa Motors factory located in Durban, South Africa. The company’s president and chief executive officer was facing various immediate issues including mud flooding of the plant, employees stranded within the plant, growing concerns over electrical shorting and possible electrocution due to rising water levels, and the plant’s closure in response to the flooding. As a result of the flooding, the plant had to shut down for five months, which deeply impacted the entire supply chain of original equipment manufacturers and dealers who depended on Toyota South Africa Motors for their sustainability. The consequences of a prolonged plant closure could affect multiple stakeholders, including 8,000 employees and the larger South African economy. Toyota South Africa Motors contributed approximately 130,000 Toyota vehicles per year for the local market and for global export. The company’s president needed to contain the immediate crisis and work with Toyota South Africa Motors stakeholders to lead a substantial recovery from the disaster.
Toyota South Africa Motors: Flood Devastation and A Plant in Crisis (Part I)
Lisa Kinnear, Margaret Sutherland
Product #:W32218_P
Supplier:Ivey/GIBS
Discipline:Organizational Behaviour/Leadership, Sustainability
Setting:South Africa, 2022
Your Price:$9.71
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Learning Objectives
This exercise is appropriate for executive education and for advanced undergraduate and postgraduate management courses. It can be incorporated into units and courses on leadership, strategy implementation, crisis management, international business, and sustainability. The three parts of this exercise detail the importance of strategic partnerships within an operating environment, effective leadership practices in crisis management, and the importance of leadership and organizational resilience. This has become especially crucial in the volatile world of crisis events that are caused by issues such as climate change, geopolitical inequality, and socio-economic instability. This exercise also highlights the contribution of business to tackle sustainability issues, as laid out in the United Nations Global Compact’s 2020 document, SDG Ambition.
In this exercise, Toyota South Africa Motors leaders face various dilemmas and must make some decisions to recover from a crisis. Their response indicates practical grappling with organizational resilience and associated integrated financial, social, and environmental impact to their business. Specifically, after working through the exercise and assignment questions, students will be able to
- understand the role of leadership and organizational resilience in strategic management;
- understand the role of stakeholder engagement in crisis management and as a strategic imperative for organizational sustainability;
- identify the leadership competencies required to effectively manage a large scale crisis; and
- identify the principles and implementation strategies for effectively leading large scale crisis management.