Business - Management Theory: Toyota Term Paper

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Likewise, Lynn points out that, "Japan's recent economic problems may have far more to do with its financial and bureaucratic systems than its managerial systems." According to Everett and Strach, "Japan experienced a decade of zero growth in the 1990s and slumped into recession," but, "The global dynamism and success of Canon, Hoya, Honda, Toyota, TDK, Rohm and Sony, known as the 'seven samurai,' contrasted with the quagmire of the Japanese economy." The company's leadership is clearly forward-thinking as well with its emphasis on R&D into production hybrid models.

Collaborative (about relationships)

Collaboration among the various business segments, as well as the managers within these units, has been a distinction at Toyota over the years, based in large part on the need to maximize scarce resources. Furthermore, the company's leadership has historically recognized when collaboration and cooperation with its major competitors can be in its best interests; for instance, the success NUMMI, the Toyota-GM joint venture, has been the focus of attention for both journalists and academicians alike. In addition, the company ensures close collaboration among its various vendors and subcontractors: "Toyota requires their subcontractors to engage in compulsory process benchmarking activities in which trade secrets are exchanged among members of the outsourcer cadre so that they can collectively improve their effectiveness in service to the organization."

Action (about change)

According to Mintzberg, "Change is fine, and important, but the object of management development is learning. Our belief is that third-generation management development must extend the learning of the classroom well into the organization. We call that 'teaching impact.'" The benefits of promoting a learning organization have not been lost on the managers at Toyota because product development is a particularly critical function within the automobile manufacturing industry. According to Bounfour, the superiority of the Japanese is based in large part on their ceaseless ability to place new products in the market. In fact, the research required to develop a new automobile model was approximately three times less for Japanese companies than for their large generalist Western counterparts; furthermore, the average duration of development for the same Japanese manufacturers is approximately 30 per cent less than their Western competitors.

IV. Conclusions and Recommendations.

Conclusions. Although it is hard to argue with the company's stellar successes in recent years, it is also clear that every organization can be improved and Toyota is no exception. As Smith and Thompson emphasize, the new approaches to management that have emerged in recent years based on theories of lean production promotes the superiority of Japanese production, particularly as developed by Toyota and through the experience of Western transplants, but ignores some important market realities and are based on potentially untenable assumptions.

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For example, as Baker and Maddux point out, "Lean thinking grew out of the efforts of Toyota to remove waste from its production, supply, and distribution processes. While applied primarily in manufacturing settings, its focus is on enhancing value delivered to customers in any competitive setting through removal of waste in time, cost, resources, and space. Successful implementation of lean thinking assumes a significant level of process management expertise."

While it would seem clear that the company enjoys this level of expertise today, it remains unclear whether the same techniques will allow Toyota to successfully overcome the new challenges facing auto manufacturers today. For example, Toyota today is at the top of a large network of suppliers that are comprised primarily of small- to medium-sized enterprises (SMEs) and is well positioned to exploit its leadership position by forcing its vendors and subcontractors to conform to its management practices, and this practice allows Toyota to achieve these streamlined procedures without compensating these enterprise for their additional costs. Notwithstanding the potential economic benefits that may accrue to a long-term relationship with an enormous multinational such as Toyota, to the extent that Western enterprises are compelled to transform their management practices in the short-term to comply with these unfunded corporate mandates may be the extent to which they decide the price is simply too high. In fact, some SMEs may bankrupt themselves in an attempt to comply with such corporate mandates from large multinational corporations. Furthermore, the company's emphasis on profitability may adversely affect its ability to attract and retain loyal workers; in fact, in the past, Toyota has been compelled to solve its periodic labor shortage problems by building training centers just for this purpose.

Recommendations. Based on the foregoing strengths and weaknesses, the company could benefit from taking the following initiatives, particularly in its North American market:

Reassess its policy of forcing SMEs to comply with various management practices and information technology initiatives without compensating them;

Examine some contingency management approaches that do not rely so heavily on existing practices to increase flexibility in the event of unforeseen downturns in the economy or fundamental shifts in the social contract.

Increase its research into hydrogen-based propulsion systems beyond their existing hybrid model that represents interim technology only and may be obsolete before it can become profitable......

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