The Research On Product Quality Crisis Management Of Transnational Corporations In China

Product quality crises of transnational corporations have erupted frequently in recentyeas. These crises not only caused different physical and mental damages to customerswhich reduced the customer satisfaction and brand loyalty, but also cut down thecorporations’ market share and sales which greatly weakened enterprise competitiveness.Based on the theories and researches of crisis management and quality crises, the thesiscarries on a further research on product quality crisis management of transnationalcorporations from macro and micro aspects according to case study, comparison analysisand game theory.The main reasons which caused this recalling event of Toyota Motor Corporationincluded: unreasonable position of management philosophy, egregious pursuit ofreducing cost and insufficient capability to dealing with crises. The recalling event notonly brought severely losses to Toyota Motor Corporation itself, but also made the wholeautomobile and manufacturing industry in Japan overshadowed. The thesis alsoelaborated the particularities of transnational corporations’ product quality crisescomprehensively, which covered the negative and positive sides. On one hand, theinfluence of’ crises would be wider and deeper than domestic enterprises andtransnational corporations need to face with different social background and environment.On the other hand, abundant capital, advanced technology and strong ability of resourceallocation were the powerful supports for transnational corporations to deal with thecrises. On these bases, the thesis built the game model to analyze the behavior selectionmechanism between transnational corporations and supervision departments ofgovernment. In the static game model with complete information, both sides could onlyarrive at the mixed strategy of Nash Equilibrium. In the evolutionary game model, bothsides could arrive at a relatively stable state after repeated bouts: departments ofgovernment supervised the transnational corporations with a certain probability,transnational corporations dealt with product quality crises with probability close to1.Through the analysis of three parts above, the thesis gives some suggestions to dealwith product quality crises for transnational corporations from multinational corporationsinternal, the relationship between multinational corporations and governments and therelationship between multinational corporations and consumers respectively. Firstly,transnational corporations should establish reasonable management philosophy, controlproduct quality strictly, set up a management system of product quality crisis and deal with crises actively. Secondly, multinational corporations should familiar with the laws,regulations, standards and human environments on product quality. Thirdly, multinationalcorporations should familiar with consumers’ preferences and protect the lawful rightsand interests of consumers.