Paper info: The Ford Explorer - Firestone Tires Crisis: a Rules Theory Analysis of Relationships
The Ford Explorer - Firestone Tires Crisis: a Rules Theory Analysis of Relationships
Macquarie Graduate School of Management
University of Otago
Place of Publication
The paper was published at the 23rd IMP-conference in Manchester, UK in 2007.
In the late 1990’s and early 2000’s several accidents were reported of Ford Explorers equipped with Firestone tires rolling over as a consequence of tires’ failures. By the end of 2000 the death toll was estimated at more than 250, and some 3,000 incidents had been associated with ‘defective’ Firestone tires mounted on Ford Explorers. These problems were frequently encountered in Saudi Arabia and Venezuela but also occurred in mid-western US. The US reports triggered a crisis for the two companies.The magnitude and complexity of the problem was such that neither Ford nor Firestone could provide an acceptable explanation. Both companies denied responsibility and did not react as customers might have expected but instead chose to blame each other. The approach taken by Ford and Firestone to the management of the crisis not only severely damaged their century-old relationship but also enabled other parties to exploit this opportunity for commercial gain. Consequences included destroying both companies’ bottom line and, of course, damage to brand reputation.We analyse the episode using Rules Theory. This models the episode and the companies’ interactions as if the parties were applying sets of rules. Two types of rule account for their interaction – rules of meaning and rules of action. Rules of meaning enable each party to make sense of the other’s acts and rules of action guide each company’s response based on the meaning given to the other’s previous act, as well as on previous experiences and future expectations. Rules Theory recognises that both Ford and Firestone are embedded in extended networks which both influence and are influenced by this episode. In our study of the Ford–Firestone crisis we first portray the business-to-business dyadic relationship before the roll-over incidents. Then we represent the network setting by identifying additional parties that became involved, and finally we analyse the parties’ acts as if rules of meaning and action were guiding interaction throughout the evolution of the episode. We are able to portray changes to structural attributes of the dyadic relationship as a consequence of the crisis, which also lead the reconfiguration of the network.We put forward a number of practical and methodological implications of our study.