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It's Not Just Toyota. Do Asian And Chinese Companies Generally Not Know PR?

By Dan Harris and Steve Dickinson

PR guru David Wolf of Silicon Hutong just did a great post, enititled, "It Is Not Just Toyota," in which he lambastes Asian (including Chinese) companies for not properly preparing for or handling crisis. Wolf starts out by commenting on a Wall Street Journal article that sees Toyota's mishandling of its quality recall as "just one more example" of another "otherwise outstanding Japanese" company turning into a "headlight-bedazzled deer in the face of crisis." The Wall Street Journal article sees something in "the Japanese corporate culture that causes companies in crisis to go into communications paralysis. The real story behind the Toyota recall is that even this most admired of Japanese companies is utterly incompetent when it comes to the fundamentals of strategic corporate communications" Wolf sees this "non compus corparatus" problem as "endemic throughout Asia." "For all of their commercial, production, and engineering prowess, most of Asia's great companies share this giant blind-spot." Wolf sees the problem as stemming from big Asian companies no longer being able to keep their problems out of the spotlight

Twenty years ago, even ten, the severity of this problem might have been ignored. Protected by pliant local media all too ready to play down issues in deference to advertising dollars and coddled by governments at home and in countries where Asian firms set up large manufacturing bases, the specter of backlash was modest. But in a world ruled by the radical transparency of the Internet, even the slightest stain on one's corporate laundry becomes a red flag for the world to see. And it is not just bloggers and tweeters driving this change, it is also a media desperate to sustain their relevance in the new information environment, and a nascent but growing anti-corporate, anti-globalization movement seeking to prove that corporations are, by design, malignant social actors.

Wolf then tells of his experience with Asian companies trying to deal with a public relations crisis and he is not impressed:

In over a dozen years in the communications business in Asia, I have encountered all manner of companies, startup to MNC, new and old, American, European, Japanese, Korean, Chinese, Singaporean, Australian. In all that time I have never had cause to discard my initial impression of Asian firms as almost utterly incapable of anything but the most planned, scripted, stilted and disconnected communications, suited for an age long past, and incapable of protecting themselves when the wolves come howling. This must change, and it will, because the crises will not go away. Even after we stop reading about Melamine Milk, Lead-Laced Toys, Rotten Drywall, Tainted Dogfood and similar examples of Asian corporate moral failure, China's companies will discover that even enterprises with the best of reputations and purest of intentions can become overnight targets of a global foaming-spittle lynch mob.

He then assesses blame where it must go, which is right to the top:

It is time to stop seeing corporate communications as PR, to stop seeing PR as the "press wrangling" function of marketing, and to stop choosing earnest and attractive but otherwise incompetent individuals to take charge of a company's reputation. But let's make this clear: the fault here does not lie in the under-staffed, under-funded, under-appreciated PR departments stashed in back offices around the region. The problem goes all the way to the top. Poor corporate communications bespeaks inattentive or incompetent corporate leadership. Until Asia's CEOs and managing directors start paying some careful attention to this problem, we are going to watch an embarrassing procession of our best firms self-immolate. After all of the effort to create world-class Asian companies, what a pathetic waste that would be.

Okay, I agree with all that, but are Western companies really any better? My sense (and it is just a sense as I do not have nearly Wolf's wealth of experience) is that some do and some don't and those that do are fairly limited to the larger companies that are used to dealing with a really professional in house public relations staff or using top flight outside public relations consultants. I say this because I have seen my fair share of really successful small and mid-sized American companies (including clients) get pretty much annihilated due to what I perceived as their unwillingness to get on top of a bad situation early and recognize that it was no time to go it alone. I am going to have to be pretty circumspect here, but my sense is that many business owners who started their own companies become of the view that something like public relations in a crisis is something they are going to handle on their own and they do, to disastrous effect. I think the business owner believes either that no outsider can know the business well enough to help or simply that bringing in a public relations/crisis management person will simply be too expensive. I just don't see this blindness to crisis as a peculiarly Asian issue, but again, maybe I just have not seen enough of this up close to really know. What do you know?

Full post as published by China Law Blog on February 10, 2010 (boomark / email).