Toyota Creative Accounting
Now we’ll turn our attention to examine Toyota’s defensive and assertive impression management strategies and their impact on stakeholders by investigating the pictorial techniques before and after the recall incident. Pictorial IM technique is used by businesses to create a certain impression through specific illustration of graphs, pictures and/or images. For example, when a company presents a more eye catching of their dividend per share in the financial report to stress it towards the readers or potential investors.
We are able to see how this technique is used by Toyota before and after the incident. The picture shows Toyota’s financial report in 2008 (before) and 2010 (after). Without even reading the report, you could already see a major difference in the presentation of their financial report. Before the recall, Toyota stressed their net revenue, net income, operating income and dividend per share by presenting in a bigger font and more ‘eye catching’ to create a better financial impression to readers or investors. However, after the recall crisis, Toyota’s income has significantly declined and has not used a bigger font for their income to not make it too obvious to readers.
Companies also use narrative Impression Management technique to create a certain impression. Narrative Impression Management technique is the use of selective language to manipulate impressions through the presentation and content of information. Managers can use specific techniques in an attempt to influence third party impressions. For example, they may select to disclosure the most favorable information from within the whole range of available data. In this way, manager can discuss the most favorable change in performance.
Toyota has also used several narrative IM techniques to manipulate impressions. Firstly, in the president’s message after the recall, Toyota conveyed the recall crisis in a very technical language. The president, Akio Toyoda,