Strategic Management. Strategy Implementation
Strategic Management: Strategy Implementation
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Introduction
Toyota is one of the largest motor manufacturing companies in the world. It manufactures a variety of vehicles to meet the needs of its large client base around the world. These vehicles have also become popular brand names around the world. Having been a player in the automobile industry for quite some time the company has acquired a number of basic strengths that have made it successful in the industry. In addition the company prides itself in the possession of effective product line and very innovative staff. Despite it strength and countless stories of success, the company has also experienced numerous setbacks and problems that need to be handled carefully to ensure continued success for the company. Some of the problems originated for external factors such as the worldwide financial and economic crises which affected many industries around the world. However, some of the debacle originate from within and threaten the management of the company. For instance the present debacle in which the company’s top executives traded blame over the performance of the company will certainly bring about negative influence to the long-term performance of the firm. The company’s strategic management is certainly at the center of this row and may nee to be streamlined or get support from the company’s executive in order to end the raw and ensure continued success. Toyota’s poor handling of strategic implementation factors: the structure, culture, and controls played a significant role in the recent production of faulty cares and the debacle that divide the executives.
Structure
When Toyota adopted its global expansion strategy it sought to decentralize its manufacturing to have manufacture in other countries or target market such is Europe, chain and US. Although the headquarters remained in Japan and major decision were made in Japan with a board of 29 Japanese making all the decisions. All the American executives in America and other executives in other countries are tightly under control of Japanese overseers. This increasing made the structure totally centralized handle the decentralized high production targets and still sustain high quality standard for its automobiles. The Toyota Production System (TPS) greatly benefited in its organization structure and was based on principles of “just-in-time” production. Supplies and raw materials were delivered to the assembling units exactly when they are needed (Saylor.org, n.d.). This ensured that there was no room for slack resources and ensured high levels of efficiency. With TPS employee have the power to stop a manufacturing line when the notice problem. The expansion that was embraced by the company in the late 90s undermined TPS as well as the organization structure. Resources were strained across the assembling points and slowed the response time to quality issues. According to Saylor.org (n.d.) it took a “confrontation by the United States Transportation secretary Ray LaHood for Toyota to admit that some vehicles already circulating in the market has manufacture problems and started recalling the vehicle.” Still, the executive would not take responsibility for the problems that occurred and started trading blames. The CEO, Akio Toyoda, latter admitted flaw in quality stating, “Quite frankly, I fear the pace at which we have grown may have been too quick.”
Culture
Alongside it structure was a strong corporate and company culture that ensured that Toyota had long ensured that the company sustained production quality and affordable automobiles and solved its issues amicably. The company has a culture of continuous quality improvement which ensured that the company continually improved the quality of the cars it manufactured for its customers (Feng, 2011). This culture was envied by many in the industry worldwide. As a group the company’s executives argued, the company push for increased production made the company sacrifice quality for quantity (Shirouzuinside, 2010). The Toyota Production System (TPS) had simple and essay decision making process that ensured those involved in production could make decisions and act on them immediately. The expansion and decentralization of the company however was not accompanied with decentralization of decision making. The culture of making decision onsite was dealt away with and information had to be relayed to the management for the management make decision and relay them back to those on the site to act on them. For instance, no American executive would recall faulty vehicles without authority form the senior management board in Japan. The leadership culture also faced strong challenges as non founding family executives and executive from the founding family started competing for the leadership negatively affecting its strong corporate culture. The struggle between the executives saw them trade blames over the faulty vehicle that were recalled rather than coming up with a strategy to clean the companies reputations (Kingston, 2010).
Controls
Amidst the hast to achieve strategic goals in production and a leadership position in automobile industry worldwide, the company the company hit a wrong footing in its control approaches. The management adopted cost reduction and sales generation as joint control in realizing its objectives. To reduce coast Toyota use a team of engineers to crate design that ensure that the few parts and cheep material are used to make cars, thus materials and supplier parts were sourced from cheap providers. There was little effort to improve old-styled quality controls in manufacture and design as they became outdated and out of place in the 21st century (Matai, 2010). Certainly there is a conflict between the new and the old world, a conflict that the extreme quantity oriented ambitious strategic plan fail to take into account. It is thus not surprising that Toyota, a company whose initial market base and popularity came from provision of quality automobiles found itself puzzled and having to recall over 1.8 million cars for manufacture errors. The problems reported on floor mats and accelerator pedals were computer-aided design errors in supplier parts while the braking problems were a product of software glitches. All these were a product of inability of the quality control system in an overstretched production to monitor critical component such proper development of computer aided designing, proper man-machine interface, critical software development and testing, ensuring that innovation is risk-free, interpreting warning signs and managing crisis properly. In sum, the strategic development filed to provide mechanisms for monitoring the quality of production under increased volume of output, leaving room for faulty vehicle to find their way to the market a negatively affecting the quality reputation the company had (Matai, 2010).
Case assignment lessons
Strategic management process is a critical component in success of a company. Crating strategic plans and implementing them must take into account the long established traditions of the company such as the organization structure, culture and controls. The management has the responsibilities to ensure that the strategic plans are attuned with these three components. If there is need to change the structure, culture or controls the changes should uphold to core values of the company. For instance, changes at Toyota should have upheld the lean and continuous quality improvement culture, onsite decision making culture, and strong controls over the quality of the vehicles made.
Conclusion
Toyota is on of the most successful automobile manufactures in the world. In 1995 Toyota came up with an ambitious 10 year expansion strategy followed by a 15 year strategy aimed at making the company the largest car maker in the world. The strategy was successful at first but lead to reduced quality of the cars made. Non family related executive sought to alienate family related executives and with the rise of Akio Toyoda into the chairman position increased the tension between the two groups (Shirouzuinside, 2010). The coincided with the emergence of the failures strategic plans the emphasis quantity and profits over quality. Toyotas strategic plan yielded the negative results due to being out of touch with the company’s culture, structure and controls.
References
Feng, Y. (2011). Toyota Crisis: Management Ignorance. Master’s Dissertation in Management of Innovation and Business Development, 15 ECT.
Kingston, J. (2010). A Crisis Made in Japan. Retrieved from http://online.wsj.com/article/SB10001424052748704533204575047370633234414.html
Matai, D. K. (2010). What Undermines Global Leadership Suddenly? Real Crisis Management Lessons from Toyota. Retrieved from http://www.mi2g.com/cgi/mi2g/frameset.php?pageid=http%3A//www.mi2g.com/cgi/mi2g/press/150210.php
Saylor.org. (n.d.). Organizational Structure and Change. Retrieved from http://www.saylor.org/site/wp-content/uploads/2011/06/BUS208-5.4.pdf
Shirouzuinside, N. (2010). Toyota, Executives Trade Blame over Debacle. Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10001424052702303395904575157452266613406.html
