Toyota Crisis : Management Ignorance

Total Quality Management is a process that strives for complete satisfaction internally and externally. There are two popular methods used in today’s organizations, The Toyota Production System and the Six Sigma model. Toyota created its management system over the course of three decades. It is also known as lean manufacturing, which is in regards to limiting the amount of waste produced. This is not just physical waste but includes the management of time throughout the process, for example time waiting, conveyance,

It is important that Toyota improve their communication and process of evaluating their parts because if they don’t they risk losing customers and market shares. An improved process would also give them reassures that this issue does not arise again. According to Porter (1996) “Delivering greater value allows a company to charge a higher average unit price; greater efficiency result in lower average unit cost” (p.62). Toyota needs to focus more on quality than quantity. After quality is critiqued then they can continue to grow at a lower rate. If Toyota gives their North American companies power to make decisions than it would be a huge improvement to the companies and less risk of safety issues.

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Toyota was thought to be the best quality car in the 1970s and 1980s but, due to Japanese competition, American car manufactures soon began to close the rankings gap. At the top of their game in 2010, Toyota had to stop manufacturing and order a large recall of automobiles. While leadership was probably considered great at the height of Toyota’s success, changes were obviously needed during the recall period and management needed to be as adaptable to those changing conditions. The only thing regarded as permanent in a market economy is change

During a crisis here at Totoya automotive manufacturer, our goal will be to communicate facts as quickly as possible. We will form a Crisis Response Team at our Regional location, and at all of our manufacturing and sale sites. We will strive to update information as circumstances change, to ensure the safety of the community and the continued operations of automotive manufacturing. We will be mindful of how we communicate in a crisis. Our approach will affect the global reputation of our company operations and vehicles. We realize that in a crisis, people will presume us to have more information than we may actually have. At Toyota,

The purpose of this report is to examine if the reasoning behind well-known car manufacturer, Toyota’s loss of revenue and leading market position is alone as a result of extensive product recalls following a fatal crash of a Lexus ES 350 on August 28th 2009. The journal article, “Toyota Crisis: Management Issue?” (Yuanyuan Feng 2010) provides an outline of the key factors that triggered the 2009 Toyota crisis, and explores whether the fall in the company’s returns by 19% were caused purely as a result of the recall and safety concerns, or something much deeper.

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The invention of automobiles had been dated long back in history. From that day till now, it had not only made our lives easier but also simpler. From times back then till now many big automobile companies had came into existence, some of them were successful and some were not, thus going out of market and competition. Among them, Porsche and Volkswagen Group(VW) have emerged as one of the world leaders in automobile industry. Through years of hardwork and sheer use of technology and engineering developments, both of these companies have carved a name for themselves in their respective markets. But sometimes, bad management and several areas of conflict arise between two companies that can lead to its downfall. In this case too the CEO of Porsche, just wanted to administer each and everything according to his own ways and rules, but on the other hand the CEO of Volkswagen, even after facing huge loses wanted to continue on with his strategy because he was quite confident about his strategy and clearly had a broader outlook of the scenario. Therefore, due to having different mindsets, there was a conflict between the ideas of two which led to the decline of one of them. These conflicts can be summed up in the following couple of questions:

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We will start the external analysis with the PESTEL analysis of the automotive sector followed by the Porter’s five forces analysis and we will end by having a look at the key competitors and competitor pricing.

Case Study for MGMT The Case Study “Did Toyota’s Culture Cause Its Problems?” illustrates the slow reaction to safety problems and the arrogant culture of Toyota regarding the issue of unintended acceleration (Robbins &Judge 2013). The key issues in the case study are the arrogant culture of Toyota, miscommunication, groupthink and poor human resource management. The problems in Toyota began with the recall of 10000 Laxus Cars in 2000 (Finch 2010, p 475), followed by a series of recalls for different models in 2010 (Robbins & Judge 2013). These recalls associated with the unintended acceleration gave birth to lots of questions regarding the countermeasures of Toyota towards safety and the culture of the organization.

Toyota is a key player in global automotive market. Its structure constitutes if various production plants in different locations and a very strong branding which helps it capture a major market share. Like other enterprises, Toyota has several strengths and weakness which makes it what it is now. Toyota heavily invests in Research and development which helps it come up reputable product line which is spread out throughout the world because of its strengthening global distribution network however its recent product recalling, loose grip in key geographic areas and wrong allocation of resources shows that even a strong brand like Toyota has its weaknesses.

This work is done to study the improvement of the quality in automobile industry. This chapter consists three sections named as “Problem definition”, “Objectives” and “Methodology of the study” respectively. The section 3.1 named as “Problem definition” describes the challenge or difficulty that is to be solved. The solution may be achieved after fulfilling the objective by using some sub-objectives that are described in section 3.2 named as “Objectives”. The methodology described in section 3.3 in details. This methodology has been devised keeping in mind the view of “Problem definition” and the “Objectives” that are suggested for the fulfilment of the solution for the problem.

It has been created also a gap between Image and Vision. After the crisis Toyota's relationship with its main stakeholders (suppliers, national and international customers, employees, dealers and investors) was not so strong as before, because it was loosing its reputation. The investors and the suppliers were complaining because recalling million of vehicles, and the customers were disappointed because they were not receiving what they expected.

Undoubtedly the practice of innovation and creativity has started back years ago, before the advent of globalization, through which scientists, doctors, physicians, authors and philosophers came up with innovative and creative ideas, solutions and new items etc…