Management and Leadership at Toyota Motor Corporation Nancy Mitchell-Edwards MGT/330 January 17, 2010 Walter Goodwyn Management and Leadership at Toyota Motor Corporation Toyota Motor Corporation (TMC) is one of the leading automobile manufacturers in the world. The name itself inspires trust in the brand and for many people around the world, purchasing a vehicle manufactured by Toyota is also a sound investment. In 1933 Toyoda Automatic Loom Works, Ltd established the Automobile Department. In 1935 the first A1 prototype passenger car and the G1 truck were made at Hinode Motors and in 1937 Toyota Motor Co. Ltd was launched (Company, 2011).
These are the facts, but to understand the culture of Toyota, one must first have a modicum of understanding the culture in which its founder was born and in which the company itself evolved. One cannot look at Toyota from a Western point of view and understand the culture developed from an Eastern point of view. This essay is written to explain the differences in management and leadership at Toyota, to identify the roles and responsibilities of each, to evaluate the effect of globalization, and to propose approaches for organizational managers and leaders to create and maintain a healthy organizational culture.
The Difference Between Management and Leadership Management For a person to be an effective administrator for a business, he or she must be skilled in management and be able to accomplish organizational goals. A manager is someone who can work with people and with resources to complete business objectives A good manager must adapt to changing circumstances, is flexible in his or her approach to solutions, and applies the primary principles of management to the task at hand.
These principles include the four functions of management: planning, organizing, leading, and controlling (Bateman & Snell, 2009). These four features of management are central to the operation of any business, and Toyota is no exception. In fact, the very foundation of management at Toyota is based in “Meikiki. ” This means simply foresight and discernment and Toyota as well as other Japanese businesses are deeply entrenched in this philosophy.
Other concepts are changing the basis of competition continually, use multiple sources of competitive advantage, organizing to achieve new levels of agility, sophisticated collaboration by working with suppliers and customers to bring the business to new heights, and become a learning company by changing practices but holding to principles (de Bono & Heller, 2008). Toyota is a people-based management system; Taiichi Ohno was the person who realized “production depended on people, not just machines” and with that concept in mind Toyota allows its workforce to stop the production line if one sees a problem.
This perception is alien to American culture whether it is in manufacturing or banking because business in America is still primarily top-down. Many businesses follow Toyota’s management model (de Bono & Heller, 2006). According to the article “Blame Toyota’s Disaster on Japanese Corporate Culture (2010), Jeff Kingston believes the reason Toyota took so long to acknowledge a possible problem with the accelerator on some of its vehicles is caused by the corporate culture in place.
The belief is possible design problems were not adequately disclosed to management because it is difficult in Japanese culture to tell the boss what he or she does not want to hear. However, according to Murray (2010), the sticking gas pedal was an unforeseeable issue and design issues occasionally in auto manufacturing. Leadership These skills; however, do not make a person a leader. What does make a person a leader is the ability to inspire another person and to light the fire of imagination within him or her as the leader shares a vision for the future of an organization.
A leader also treats an employee ethically, fairly, and with respect. A leader promotes personal development, and clears the path for the employee’s success (Bateman & Snell, 2009). An activity of influencing another to complete objectives does not have to come from the top-down. Anyone can be a leader. A team member or a boss and according to Bateman and Snell (2009) the greater the following, the greater the influence. Toyota’s leadership model is based in teamwork, collaboration, and consensus. A leader at Toyota exists to serve the organization not the other way around.
Because this is the culture of Toyota a leader is let go quickly if his or her limitations or flaws imperil the organization in some way. The organization, customers, and employees always come first. In Western culture this has not been the case recently with the number of failed businesses caused by corrupt and incompetent leaders. Roles and Responsibilities of Organizational Managers and Leaders Managers and leaders play significant roles and have huge responsibilities in creating and maintaining a healthy organizational culture. The role of an organizational manager or leader is to focus on fundamentals, what is a priority, and what works.
Managers or leaders are also responsible for the focus on long-term issues, and the future of the organization. Managers and leaders are the barometer of the business. What he or she promotes becomes policy. If a manager or a leader promotes a dishonest practice, it becomes policy. If a manager or a leader promotes an unethical practice, it becomes policy. The reverse is also true, if a manager or leader promote honesty, ethical practices, customer service, respect, etc. then that behavior becomes policy. Unethical practices and criminal behavior trickle downwards just as behavior that is ethical and in integrity do.
The key role that each has is engendering an atmosphere of trust, honesty, integrity, innovation, collaboration, cooperation, teamwork, and good stewardship of resources (Bateman & Snell, 2009). The organizational culture of Toyota stresses continual improvement and the role of management and leadership is to model this behavior. The “Toyota Way” is toward lean production, but globally Toyota may be too provincial and not as open as Western businesses are and that may be why it took so long to admit fault with the accelerator problem (Ozawa, 2010). Globalization and Management
Therefore, the organizational culture of Toyota is drastically different from the organizational culture of Western businesses and the public relations catastrophe caught this normally staid, unassuming organization by complete surprise. According to Ozawa (2010), the company “lacked a real feeling” about what was occurring and it “failed to sense” what the consequences would be for its foreign markets. Ozawa (2010) goes on to say this crisis showed Toyota had trouble negotiating the “publicity landscape” because it was not accustomed to aggressive media and consumer groups.
Toyota had an air of detachment about its responsibility; however, the lack of communication on Toyota’s part was cultural differences not detachment. Communication was just the last thing Toyota management thought of. Toyota has a presence in more than 25 countries, and the “Toyota Code of Conduct,” and the seven “Guiding Principles” direct the activity of this organization. Following are the seven principles that guide Toyota’s way on the global scene (Toyota, 2006): ? “Honor the language and spirit of the law of every nation and undertake open and fair corporate activities to be a good corporate citizen of the world” (Toyota, 2006). “Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in the communities” (Toyota, 2006). ?“Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities” (Toyota, 2006). ” ? “Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide” (Toyota, 2006). ?“Foster a corporate culture that enhances individual creativity and teamwork value while honoring mutual trust and respect between labor and management” (Toyota, 2006). “Pursue growth in harmony with the global community through innovative management” (Toyota, 2006). ?“Work with business partners in research and creation to achieve stable, long-term growth and mutual benefits while keeping ourselves open to new partnerships” (Toyota, 2006). These seven principles guide the corporate philosophy of Toyota and also direct the global responsibility that Toyota has as a well-known global manufacturer. The Code of Conduct states and the corporate belief is that all activities are connected and each person should be aware of that link whether it is in the United States or Pakistan.
Each division has a responsibility to all other divisions. Providing safe vehicles is Toyota’s challenge and primary mission as well as building environmentally and people friendly transportation. The goal is to develop and build products from the point of view of the consumer and not just from the bottom line. Last, Toyota strives for worldwide trust as they continue to work in a global marketplace. Toyota is a successful global presence and management and employees are guided by the principles and the code of conduct created for a global presence.
Toyota has close relationships with society and its stakeholders and honors that relationship by acting as a “good corporate citizen. ” Toyota is trusted by the communities they serve and Toyota contributes to those communities. Toyota has a strong belief and track-record of philanthropy. The activities are aimed at easing societal challenges and concerns. The goal as a global enterprise is to create a sustainable society from the far-reaching perspective of the future. Toyota is a responsible global presence and can successfully manage the different divisions within the organization.
Strategies Toyota Motor Corporation would do well to create a strategy to respond more rapidly to adverse situations and issues that can come up from time to time in any organization. Part of Toyota’s success is based in how it overcomes challenges. In this case communication is the key to consumer confidence in Toyota vehicles. This strategy will go a long ways to re-establish Toyotas top place in the automobile manufacturing industry. Toyota needs to pull itself into the 21st Century. Toyota would do well to study the cultures it proposes to work with.
Western culture is inherently more outspoken and expects instantaneous responses to problems. When that does not happen, it turns on who it considers to be its enemy. In this case, Toyota. Toyota’s main business strategy is to produce an excellent vehicle that holds its value and is safe. Merging with Tesla Motors to produce an all-electric vehicle would be a brilliant move and way to show the world that it is an environmentally conscious organization. That aligns with Toyota’s Code of Conduct and also would align with the concepts of sophisticated collaboration, and using multiple sources of competitive advantage.
An all-electric vehicle would be unique and would differentiate this organization from other car manufacturers not as advanced or as socially conscious. A Toyota all-electric vehicle would have the craftsmanship, design, and reliability that Toyotas are known for and be socially responsible. In conclusion, Toyota is an amazing organization and despite recent bad press remains one of the greatest success stories of the last century. The slow response to the accelerator crisis was not because of detachment or disdain, but because of the cultural norms of the business.
The culture that created Toyota to be the global giant it is also created the atmosphere that could have brought it down. Toyota has taken steps to remedy this gap so it does not happen again. Other car manufacturers and businesses should take a lesson from Toyota because out of all the large car manufacturers in the world, Toyota stands out as a beacon of propriety, reliability, respectability, and poise. In fact, the world could take a lesson from the “Toyota Way. ” References Anonymous. (2010). Blame Toyota’s Disaster On Japanese Corporate Culture. Retrieved January 12, 2010 from http://www. businessinsider. om/blame-toyotas-disaster-on-japanese-corporate-culture-2010-2 Bateman, T. S. & Snell, S. A. (2009). Management: Leading & collaborating in a competitive world (8th ed. ). Boston, MA: McGraw-Hill Irwin. Company. (2011). Toyota Motor Corporation. Retrieved January 12, 2011 from http://www. toyota-global. com/company/ de Bono, E. & Heller, R. (2006). Leadership Style: Success through the management of teamwork. Retrieved January 12, 2010 from http://www. thinkingmanagers. com/management/leadership-style. php de Bono, E. & Heller, R. (2008). Japanese Management: Business strategy lessons for the West.
Retrieved January 14, 2011 from http://www. thinkingmanagers. com/management/japanese-management. php Murray, C. J. (2010). Toyota’s Problem Was Unforeseeable. Retrieved January 12, 2011 from http://www. designnews. com/article/446480-Toyota_s_Problem_Was_Unforeseeable. php Nilson, J. (2006). Toyota Motor Corporation. Retrieved January 14, 2011 from http://searchwarp. com/swa51648. htm Ozawa, H. (2010). Toyota Crisis Throws Spotlight on Japan’s Corporate Culture. Retrieved January 12, 2011 from http://www. industryweek. com/articles/toyota_crisis_throws_spotlight_on_japans