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What problem happened in Toyota? How was it solved? This essay provides answers to questions regarding Toyota problems and solutions, such as a recall.
Introduction
How can a company that has been calling the shots in the automobile market succumb to problems and criticism brought about by mistakes that could otherwise have been avoided? Why would a company release faulty cars into the market?
Well, the Japanese owned Toyota Motor Corporation has recently succumbed to severe operational malfunctions. As a result, the company has incurred a loss of consumer confidence in their products and poor sales.
This happened despite Toyota being ranked the worlds largest car manufacturer after out-pacing American owned general motors. It is noteworthy that most of the problems the company is currently undergoing could have been foreseen and avoided as they are considered human errors.
The company president, Mr. Akio Toyoda, came out and apologized for the mistakes committed by the company. However, he seemed not aware of the exact problems his company was enduring and how to solve them.
Most importantly, for Toyota to recover from the current crisis, it must address the main problems exist, ting within its management structure.
In as much as the problems faced by Toyota Motor Corporation are numerous, it is necessary to explore the most distinct which are bureaucracy, overconfidence, weak management and fall out.
Bureaucracy
It is noteworthy that problems involving bureaucracy have taken a center stage in Toyota Motors Corporation. Thus, the Japanese carmaker has been dealing with emerging problems instead of concentrating on the smooth running of the company.
There are numerous avoidable bureaucracy problems that have engulfed Toyota Motor Corporation; as a result, it has led to company criticism and reduction of sales. One of these problems involved its expansion into the United States market.
It is evident the two operating stations in the United States reported to the headquarters in Japan as different entities. Thus, in the implementation of the United States expansion program, the bureaucracy arrangement was not well structured.
Holstein further affirms that James Press, Toyotas highest-ranking U.S executive managed to establish Toyota Motor North America with its de facto headquarters in New York.
Also, he ascended in the companys management portfolio as he was appointed a member of the board of directors in Japan. This branded him the only non-Japanese in Toyotas board of directors. In an apparent turn of events, Press quit Toyota in 2007 and went ahead to join Chrysler.
As a result, he was replaced by executives from Japan who had no experience in the United States automobile market. This was the onset for Toyota problems in the U.S.
Most importantly, the departure of press disjointed the informed bridge between Toyota management in Japan and its subsidiaries in the United States. Thus, the company could not ensure a quick response in case of a crisis.
Toyota Motor Corporation has to make quick solutions to this problem to continue making profits and make customers regain trust in its products. The bureaucracy problem should be solved from a professional perspective.
Thus, the company should assign the management of the U.S market to competent and experienced individuals.
This should probably be individuals with experience in the United States motor vehicle industry and are fully aware of the challenges and requirements of the market. This solution is in line with Max Webers key characteristics of bureaucracy.
The other bureaucracy problem that surrounded the Toyota expansion program in the United States was the failure in the implementation of effective teamwork.
This came about as the 400 workers in its United States plant were assembling and distributing 250,000 parts in a day to the local centers in the United States. Hence, it was considered a team-oriented facility.
Unfortunately, it started its operation before adequate team training was completed. Thus, the management had the pressure to supply parts on time, resulting in the adoption of a traditional bureaucratic arrangement.
This arrangement was in such a way that 13 supervisors were making decisions for large work units. As a result, the regional centers were not happy as they had been promised a team-based work environment and criticized the management for not fulfilling their promise.
Guffey suggests that this problem is best solved through consideration of Max Webers characteristics of a bureaucracy which insists on job specification that constitutes obligations, detailed rights, the scope of authority and responsibilities.
Thus, Toyota has to establish a team-based working environment by putting into place the concept of job specification with consideration to obligations, detailed rights, the scope of authority and responsibilities.
This will facilitate teamwork and cooperation; thus, the workers and the local centers will be comfortable as they will be involved in the decision-making processes, in the company.
Implementation of this solution will also result in increased production and supply of the vehicle parts and their distribution in the United States regional centers.
Recently Toyota experienced a bureaucracy problem that led to the recall of automobiles around the world.
Toyota president, Akio Toyoda took two weeks before admitting that the company was undergoing a crisis, moreover in his brief to the media he seemed not aware of the problem in his company.
As a result, some analysts said that this slow response was related to Japanese work behavior and the way decisions are made in Japanese companies.
However, other analysts differed and maintained that the slow response was not related to the Japanese culture, but the consequence of a company whose cooperate bureaucracy grew too large as it made all efforts to become the worlds largest automobile manufacturer.
Analysts at the Citigroup global markets stated that Toyotas bureaucracy enlarged with time and the in-house communications slowed because it was racing up to replace general motors, as the largest automobile manufacturer in the world.
Lincoln, as a result, reveals that in solving the problem of the slow response by management to the company crisis like this one, Toyota has to establish a more elaborate unity of command.
Thus, the structure will ensure the management comes out in time and responds to any controversy surrounding the company especially one of this magnitude. It is evident that the company president came out to brief the public about the crisis but still did not know the main problem in his company.
Hence, he seemed not well briefed by the parties concerned within the company as the system of command amongst the management had no unity. In accomplishing this solution, it might lead to the taking of severe measures on the size of the bureaucracy.
Thus, streamlining of the command chain is essential with some being dropped and others being assigned more responsibility.
Overconfidence
The other problem in Toyota is overconfidence. It is noteworthy that Toyota is a secretive organization. This is because what goes on inside this organization is not easily discussed outside the company.
Also, the employees are forbidden to talk about the company procedures and strategy to any other person. The company believes it is the best and thus does not need to share information with any other organization.
An American employee once confided that working for the company with the level of secrecy involved equals working for the central intelligence agency. This is because the information is shared on a need to know basis and not any other time.
Also, it was always difficult to get information about the company from the management or employees.
It is a fact that Toyota has automobile publications, but all the information contained in the publications in general and mainly overviews. Sharing of organization ideas is essential as it facilitates the realization of the targeted goals.
For many years, Toyota was considered an underdog when compared to Ford motors and general motors; however, it recently developed secrecy in its operations when it started out doing its American rivals in worldwide sales.
At this time, Toyota motors did not need any loan or grants to develop products and marketing strategies to sell its vehicles. It is noteworthy that the company had all the resources it needed to produce and push through their products independently without outside assistance.
Most importantly, the feedback from its consumers gave the brand praise. As a result, Toyota adopted the notion that it did not need a strong public relation strategy to promote its brands.
The company contended that the response it was getting from its customers was enough to propel the sale of its products. Also, it failed to recognize that market challenges on the leading player were more as compared to other players.
Thus, the company did not prepare for the current reduction in sales and consumer complains triggered by faulty productions.
Additionally, these problems seem difficult for Toyota to solve as it does not interact with the other players to find out how they solve such problems. Overconfidence blinds an organization and makes it fail to notice its shortcomings.
It is a fact that overconfidence in Toyota motors made it fail to collect its competitors information. As a result, it is paying heavily for the current problems surrounding the companys operations.
It is evident that the moment Toyota attained the number one spot as the worlds leading automobile manufacturer it entered into a comfort zone and seized to recognize the strategies its competitors were employing.
Also, Toyota took so long to acknowledge its problems as overconfidence had engulfed its operations. The companys president Mr. Akio Toyoda came out and apologized for the current production faults which he related to overconfidence.
This problem has contributed to the downfall of many companies around the world and Toyota had a chance of learning from the example of such companies and avoid being caught in such a situation.
It is evident that Toyota overestimated its actual performance which in the end fell short of the expectation.
According to Schwartz, overconfidence is the root cause of recurring company problems as it results in laxity. In Toyota Motor Corporation, overconfidence has resulted in the decline of sales and loss of consumer trust.
Thus, it is a problem that has to be eliminated from within the company. In solving this problem, the company should consider interacting with other market players and share ideas. Most importantly, the company should attend corporate events organized by different corporate partners.
This will eliminate the problem of secrecy within Toyota and enable it to share its problems with the corporate partners. As a result, the relationship will be mutual, and the company will eliminate overconfidence and be aware of its shortcomings way before they emerge in its operations.
Cooperate events have proved to yield positive results when it comes to solving the problem of overconfidence. Also, interaction results in the identification of weaknesses; thus appropriate measures are taken to ensure these weaknesses do not interfere with the company operations.
The other way that appropriately solves this problem is for Toyota to embark on a networking exercise and create several links with other corporate companies to broaden its opinion sources. Additionally, the company will gain more confidence in the networking structures.
McKenna affirms that a well-coordinated networking process will ensure that Toyota motor corporation maintains constant and reliable feedback on the efficiency of its products.
Thus, Toyota will realize its strengths and weaknesses; as a result, it will be easy to avoid a crisis like the one that made it recall close to 8.7 million vehicles that had mechanical faults.
Most importantly, effective and well-coordinated networking structures will act as a shield against the unexpected organizational crisis.
Toyota will have to appoint a team to monitor this process to give out warnings whenever a crisis is looming while basing on the feedback from the networked structures.
It is also essential that Toyota adapts a standard and more reliable strategy of evaluation to avoid overestimation of the companys outcome and operations. Thus, Toyota will be able to identify potential problems either in the companys products or the market setting.
In the end, appropriate measures will be taken to prevent the company from getting into a situation like the present one. Furthermore, Toyota overestimated its operations based on three main factors, i.e., the quality of its products, the response from customers and the ability of its competitors.
The company was focused on being the leading car manufacturer and forgot about the basic elements of the business.
Thus, a standard and effective evaluation strategy as Kreitner divulges are appropriate as it will enable Toyota to accurately perform an evaluation process basing on the current market condition.
As a result, the problem of overconfidence will be curbed as the actual market outcome will be portrayed. An effective evaluation strategy has been evident to enable organizations to avoid overconfidence as the weaknesses identified always keep the management on toes.
Weak management
Stahl & Grigsby depict that the problem of weak management in an organization has always been considered a recipe for disaster. Thus, it is essential to strengthening management whenever this is detected.
In recent times, Toyota has experienced numerous problems linked to weak management strategy. It is evident that Toyota for many years has been managed by a series of professionals.
Hence, it managed to attain its success and assumed the number one spot as the worlds biggest automobile manufacturer. Last summer grandson of the founder, Akio Toyoda, took over as the companys chief executive.
This prompted a mixed reaction from analysts and observers both in Japan and the United States of America. Many analysts and observers stated that Akio Toyoda was not ready to manage such a world-class company.
With consideration to the current happening at Toyota, it is clear that truly he was not ready. Analysts argued that the management of a company in the class off Toyota needs an individual who is aggressive and independent in making his decisions.
Akio, they say do not have any of these qualities as he is not aggressive in his ventures and always seek the opinion of his family while making decisions concerning the company.
When he took over the job, Akio promised the world that he would manage by walking around; thus, he would go where the problem was.
However, he contradicted this statement during the safety flap crisis, as he failed to come out promptly and explain to the world the cause of the problem and how Toyota motor was going to solve it.
Promptness in response was what any manager in his shoes would have done. Instead, he chose to travel to Switzerland and attend the annual gathering of world leaders. Furthermore, he delegated the management of the predicament to the head of Toyota motor sales, James E. Lenz III.
This resulted in the criticism of his style of management with some analyst suggesting that he was supposed to be the one dealing with that crisis directly.
As the icon of the company, Toyoda had the responsibility of coming out boldly and accept responsibility for the crisis while revealing the next step to be taken by the company.
The problem of weak management is also being portrayed in Toyota because the Japanese company has not yet gotten to the root cause of the problem. Similarly, the management seems to be covering up the mistakes made by its employees.
Since the revelation of the safety flap, no one in Toyota has been held responsible. It is evident that in Toyota the management structure results in poor communication amongst the employees.
As a result, the company activities are marred by errors and blunders that no one is ready to take responsibility for; thus, managers and employees are not held responsible.
Additionally, the management brings out a culture that stifles individualism. This is because; the company does not share its proceedings with other companies. They believe sharing of such information will give its competitors an upper hand against it.
Toyota has been known to have invented the asking of the five whys. Thus, in case of any problem in the company, the five whys were used to get to the root cause of the problem.
In solving the problem of weak management in any organization, it entails undertaking severe measures that might target individuals. However, a good recovery program results in improvement.
For the case of Toyota, the management model should be restructured in a way that facilitates easy flow of communication. A good communication channel will improve the relations within and outside the company.
It is evident that the present Toyota management structure has resulted in poor communication among the existing departments. Toyota Motor Corporation has to adopt a team-oriented working environment that will ensure the workers contribute to each task to improve working relations.
As a result, the management and employees will be held accountable for each task assigned. It is noteworthy that the lack of accountability was blamed for a slow response to the safety flap crisis.
The president had no one to brief him on the happenings as every employee seemed to distance himself from the problem. It is argued that weak management in Toyota Motor Corporation has eliminated the possibility of collective responsibility among the employees and management.
Thus, a well-facilitated communication channel will enhance collective responsibility and accountability.
Weak management can be curbed when the president of Toyota Motor Corporation Mr. Akio Toyoda leads from the front in times of company crisis. Thus, such an act will instill consumer confidence in him and Toyota products.
It was so unfortunate that, during the recent safety flap crisis in the company, Mr. Toyoda decided to delegate the duties of dealing with the crisis to the head of sales.
As the company president, it is his responsibility to ensure he briefs the clients and potential customers on the happenings at Toyota Motor Corporation.
Stahl & Grigsby insist that the aggressiveness of any company CEO during a crisis is evident as the only tool that best ensures damage control. Weak management as a result of laxity by the head of the company at times is best solved by the replacement of the top management.
Thus, for Toyota to curb the problem of weak management the top company executives including the president Mr. Toyoda, should be fired and their place was taken by other qualified individuals.
Toyota Motor Corporation has to consider professionalism when appointing the company executives. It was noted that Toyota appointed Mr. Akio Toyoda as the company president because he had family ties with the founder of the company.
Thus, they failed to consider the qualifications that come with the position of the company president as Mr. Toyoda is a qualified banker and a rally enthusiast but does not pose any management qualification.
In solving this problem, the company must replace Mr. Toyoda with a more qualified individual with experience in the management of a world-class company in the status of Toyota Motor Corporation. The company must avoid involving family ties in the running of the company.
Furthermore, it has also been noticed that Toyotas board of directors and other high ranking executives in the company are mostly Japanese. This, as a result, has contributed to the presence of weak management in the company, as unqualified Japanese individuals are appointed as executives.
Although the company is entitled to the provision of employment opportunities to the home population, it must consider adopting a global outlook by the inclusion of non-Japanese in the company board of directors and executives who are more qualified to manage the company.
The fallout
Cusumano divulges that Toyota problem-solving mechanism seems to have broken down this is about the recent set of crisis that has engulfed the Japanese car manufacturer.
During the recent safety flap crisis, the company announced that the floor mats were faulty then after some time it said it was the gas pedal. The gas pedals were supplied from an Indiana company. Thus Toyota claimed that the only U.S made vehicles were faulty.
However, this version of Toyota did not hold up as a Lexus manufactured in Japan bearing the same mechanical fault was involved in an accident, in California. As a result, Toyota described it as a software problem.
At the moment, the company has stated that the problem is related to faulty software used in breaking and acceleration vehicle operations.
Also, it is not clear how long Toyota will take to formulate the problem, as they already suggested that it will not be quick. Safety measures have thus been established to control this problem but not to eliminate it.
The company president is said to have compounded the crisis facing his organization. Additionally, he failed to address the problem adequately when he appeared for the press briefing.
Everything seems to have fallen apart as his proposal to form a quality committee and welcome experts opinion from outside the company was not well presented.
Previously, Toyota was known for quickly correcting mistakes, as evident when it introduced its first car model in the U.S market and got laughed out but came back with an improved model. Also, its Lexus model has given big names like Mercedes, Cadillac, and BMW a run for their money.
At the moment, the company faces lawsuits filed by victims or family of victims involved in accidents while driving faulty Toyota automobiles. Moreover, the company faces scrutiny from various legal organizations and governments especially in the United States of America.
Most importantly, Toyota is on the spot, and it is not clear when it will come out of the problem.
In solving this problem, Toyota needs a complete makeover from management to workers. The main factor that led to fall out in Toyota is its inefficient Human Resource department.
This problem is solved through the structuring of the human resource department to improve the working conditions. Thus, the company should consider rewarding employees in a way to appreciate their efforts.
Most importantly, it has to recognize the employees who facilitate quick action in case of a looming crisis.
To avoid the currently occurring faults in their vehicles, Toyota must implement a training program, for employees to enable them to acquire the necessary skills and capabilities to solve the challenges they might encounter in their workplace.
These employees should be able to avoid ignorance of external safety information.
It is noteworthy that Toyota needs to implement an effective recruitment strategy to bring on board individuals with a high level of skills and capabilities to tackle the present crisis professionally.
Also, solving this problem involves establishing a performance management process that will enhance frequent monitoring of performance and, as a result, help identify problems before they get out of hand.
It is also essential that Toyota develops a corporate culture that will make the employees identify themselves with the company. Hence, they will be committed to the company resulting in an excellent production.
The leaders should undergo a development and succession program; as a result, they will learn and gain experience to navigate the company through the rapidly growing automobile industry.
Most importantly, the success of Toyota after recovery from the present crisis will depend on the established risk management strategy.
An effective strategy will enable it to forge forward through identification and to solve or avoiding risks involved in both management and production processes.
Conclusion
The problems Toyota is facing currently are not as a result of an individuals isolated mistake, but a collective company mistakes linked to one another. A number of the companys corporate functions were involved. Thus, the crisis in Toyota was as a result of a failure in its system of management.
Most importantly, the lesson the other market players should learn is that a good management and production process requires frequent evaluation of performance. This helps in the prevention of crisis caused by avoidable billion-dollar errors.
Bibliography
Cusumano, Michael. Staying Power: Six Enduring Principles for Managing Strategy and Innovation in an Uncertain World (Lessons from Toyota, MicrosoftIntel, Apple, Google, and More). New York, NY: Oxford University Press, 2010..
Guffey, Mary. Business communication: process & product. Ohio, OH: Cengage Learning, 2008.
Holstein, William. Toyota recall highlights deep organizational failures. BNET, 2010. Web.
Kreitner, Robert. Management. Massachusetts, MA. Cengage Learning, 2008.
Lincoln, Edward. Arthritic Japan: the slow pace of economic reform. Washington D.C: Brookings Institution Press, 2001.
McKenna, Eugene. Business psychology and organizational behavior. Philadelphia, PA: Psychology Press Ltd, 2000.
Schwartz, David. Encyclopedia of knowledge management. Philadelphia, PA: Idea Group Inc (IGI), 2006.
Stahl, Michael, Grigsby, David. Strategic management: total quality and global competition. Massachusetts, MA: Wiley-Blackwell, 1997.
Sullivan, John. A think piece: how HR caused Toyota to crash. Recruit fest, 2010.
Swamidass, Paul. Encyclopedia of production and manufacturing management. Massachusetts, MA: Kluwer academic publishers, 2000.
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