Toshiba crisis: U.S. Congress threatens sanctions for violating COCOM regulations
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This case study explores how Toshiba Corporation, a Japanese electronics company, managed the crisis caused by its subsidiary. Toshiba Machine Co. (TMC)'s illegal exporting activities to the Soviet Union. Between 1981 and 1984, TMC sold eight military sensitive machine tools to the Soviet Union. It was a violation of COCOM (Coordinating Committee on Export Controls) regulations that monitor the sales of sensitive military equipment to the Communist countries. Because the sales allegedly damaged the U.S. national security, the Congress accused TMC as well as its parent company, Toshiba, and threatened sanction to ban importing an Toshiba products. How did Toshiba identify and confront the crisis? What was the impact and the effect of tactics and strategies employed by Toshiba? The major discussions focus on Toshiba's crisis management efforts. This study is based on articles from American and Japanese newspapers and magazines as well as documents and news releases obtained from Toshiba. Furthermore, interviews with two managers of Toshiba's public communications office, one in charge of domestic and the other in charge of overseas public communications, were conducted in order to get Toshiba's insights and perspectives towards the crisis. The results of this study show some influential factors which arise from the diversity of infrastructures and characterize the public relations strategies of a Japanese company manufacturing its product in the United States. Moreover. the interdependency of the multinational corporations is clarified through the study.
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