- 01/12/2012
- Posted by: essay
- Category: Free essays
Toyota Motors, one of the most respected corporations, known in the world for its quality and reliability, faced in 2010 a number of claims and recalls related to quality of the cars and their safety. During two weeks in February 2010 about 8 million cars worldwide were recalled (Shirouzu, 2010), and as a result, Toyota sales have decreased, as well as its credit rating and quality expectations. Current President of Toyota, Akio Toyoda, claimed that these incidents and lowered quality were the result of the company’s excessive growth strategy and direction towards greater revenues at the expense of quality and reliability.
Akio Toyoda was appointed President of the company in June 2009 (Shirouzu, 2010). Before that time, a chain of non-family leaders has governed the company, and Mr. Toyoda states that their expansive strategy and ambitious aim to reach 15% of market share by 2015 (Shirouzu, 2010) has led the company to current scandalous situation concerning quality. The aim of this essay is to analyze how the strategic implementation factors such as structure, controls and culture have contributed to current scandalous situation of Toyota Motors.
First of all, it is necessary to analyze economic state of the car market and competitive environment. It is necessary to take into account the overall state of economical recession, which has affected Japanese economy among others. At the same time, positions of the competitors have improved concerning quality issues – percent of recalls for Volvo and Lexus have decreased (Liker & Hoseus, 2007), while their ratings have risen.
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It is also reported that many Asian companies using the Japanese-like working style have experienced troubles with quality, losses due to increased competition and decline in sales. Thus, one of the roots of the problem lies in organizational culture and rapidly changing economical conditions.
In my opinion, the main trouble is integrated into organizational structure of Japanese companies, with their mostly mechanistic form and collaborative corporate culture. These strategies have worked more than efficiently for the situation of developing economy and space for market growth (both nationally and worldwide). The “Japanese economic wonder”, in my opinion, was based on the relative stability of Japanese economy, growing demand and purchasing capacity for cars worldwide gave space for growth, together with moderate competition in this industry. However, currently competitive pressure and the need to reduce costs due to recession have led to inefficiency of purely mechanistic structure as well as collaborative corporate culture. Also, I believe that collaborative culture in its pure form has one significant disadvantage which is intolerable nowadays – the information is not publicly disclosed in this type of culture (Aronson, 2010), and public relations are one-sided. Nowadays, when the mass media spread the news in several hours, such policy is inadmissible for corporations willing to work outside Japan.
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