Case Study: Out of Control With a worldwide recall of some 8 million cars and 51 deaths that U.S. regulators say have been caused by mechanical failures in its cars, Toyota Motor Corporation faces a corporate crisis of epic proportions.58 What happened at the car company that had finally achieved the title of world’s largest car maker? (It overtook General Motors in 2008.) What factors contributed to the mess it now found itself in? At the core of Toyota’s manufacturing process is the Toyota Production System (TPS), which has long been touted and revered as a model of corporate efficiency and quality. Four management principles (the 4P model) were at the core of TPS and guided employees: problem solving, people and partners, process, and philosophy. The idea behind these principles was that “Good Thinking Means Good Product.” Taiichi Ohno, a long-time Toyota executive, is widely credited as the innovative genius behind TPS. During the 1950s, Ohno, along with a small core of other Toyota executives, developed several principles of car-making efficiency that became what is now known as lean manufacturing and just-in-time inventory management. “Ohno’s ideas not only changed the auto industry, they changed late-twentieth-century manufacturing.” At the very core of these concepts were attention to detail and a “noble frugality.” However, over the years, it appears that Toyota’s executives slowly lost the “purity” of that approach as the once-strong commitment to quality embedded in Toyota’s corporate culture became lost in its aggressive moves to grow market share and achieve productivity gains. From about 1995 to 2009, Toyota embarked on the “most aggressive overseas expansions in automotive history” and at the same time had a laser-like unparalleled focus on cutting costs. Four major cost-cutting and expansion initiatives severely strained organizational processes and employees. One initiative was localized manufacturing. Starting in the late 1990s, Toyota established manufacturing hubs in Asia, North America, and Europe. Such an approach meant relying more on local suppliers and design teams to tailor cars to local tastes. Another initiative was called Construction of Cost Competitiveness for the 21st Century, or CCC21. It was a massive cost reduction program. Through an ongoing process of redesigning parts and working with suppliers, more than $10 billion of savings were achieved. The Value Innovation initiative was a more ambitious version of CCC21. Under this program, more savings were achieved by making the entire development process cheaper and by further cutting parts and production costs. And finally, the Global 15 initiative was a master global plan for attaining a 15 percent share of the global car market by 2010. As of mid- 2010, Toyota had an 11.7 percent share of the worldwide car market. However, this “combination of high-speed global growth and ambitious cost cuts led to the quality lapses that tarnished the once-mighty brand.” Toyota’s president, Akio Toyoda apologized for the company’s actions and said. “ we pursed growth over the speed at which we were able to develop our people and our organization. I regret that this has resulted in the safety issues described in the recalls we face today and I am deeply sorry for any accidents that Toyota drivers have experienced.” So what is Toyota doing to remedy its problems> in addition to massive recall, the company’s president says that it is setting up a system to respond more quickly to complaints. In fact, the automaker has promised to give regional executives a bigger role in issuing recalls based on local consumer complaints, although Mr. Toyoda says that the final decisions regarding recalls will continue to be made in Japan. The company is also holding twice-yearly global quality meetings and more frequent regional quality meetings. And finally, the company is re-committing itself to better training employees in quality control. Q1: Describe the culture of Toyota Motor Corporation. Why do you think this type of culture might be important to a car maker? Q2: How do you think a long-standing culture that had such a strong commitment to quality lost its ability to influence employee behaviors and actions? What lesson can be learned about organizational culture from this? Q3: Do you think it was important for MR. Toyoda to apologize for the company’s decisions? Why? (Think in terms of the company’s stakeholders.) Q4: what could other organizations learn from Toyota’s experiences about the importance of organizational culture?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
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Case Study: Out of Control
With a worldwide recall of some 8 million cars and 51 deaths that U.S. regulators say have been caused by mechanical failures in its cars, Toyota Motor Corporation faces a corporate crisis of epic proportions.58 What happened at the car company that had finally achieved the title of world’s largest car maker? (It overtook General Motors in 2008.) What factors contributed to the mess it now found itself in? At the core of Toyota’s manufacturing process is the Toyota Production System (TPS), which has long been touted and revered as a model of corporate efficiency and quality. Four management principles (the 4P model) were at the core of TPS and guided employees: problem solving, people and partners, process, and philosophy. The idea behind these principles was that “Good Thinking Means Good Product.” Taiichi Ohno, a long-time Toyota executive, is widely credited as the innovative genius behind TPS. During the 1950s, Ohno, along with a small core of other Toyota executives, developed several principles of car-making efficiency that became what is now known as lean manufacturing and just-in-time inventory management. “Ohno’s ideas not only changed the auto industry, they changed late-twentieth-century manufacturing.” At the very core of these concepts were attention to detail and a “noble frugality.” However, over the years, it appears that Toyota’s executives slowly lost the “purity” of that approach as the once-strong commitment to quality embedded in Toyota’s corporate culture became lost in its aggressive moves to grow market share and achieve productivity gains.
From about 1995 to 2009, Toyota embarked on the “most aggressive overseas expansions in automotive history” and at the same time had a laser-like unparalleled focus on cutting costs. Four major cost-cutting and expansion initiatives severely strained organizational processes and employees. One initiative was localized manufacturing. Starting in the late 1990s, Toyota established manufacturing hubs in Asia, North America, and Europe. Such an approach meant relying more on local suppliers and design teams to tailor cars to local tastes. Another initiative was called Construction of Cost Competitiveness for the 21st Century, or CCC21. It was a massive cost reduction program. Through an ongoing process of redesigning parts and working with suppliers, more than $10 billion of savings were achieved. The Value Innovation initiative was a more ambitious version of CCC21. Under this program, more savings were achieved by making the entire development process cheaper and by further cutting parts and production costs. And finally, the Global 15 initiative was a master global plan for attaining a 15 percent share of the global car market by 2010. As of mid- 2010, Toyota had an 11.7 percent share of the worldwide car market. However, this “combination of high-speed global growth and ambitious cost cuts led to the quality lapses that tarnished the once-mighty brand.” Toyota’s president, Akio Toyoda apologized for the company’s actions and said. “ we pursed growth over the speed at which we were able to develop our people and our organization. I regret that this has resulted in the safety issues described in the recalls we face today and I am deeply sorry for any accidents that Toyota drivers have experienced.”
So what is Toyota doing to remedy its problems> in addition to massive recall, the company’s president says that it is setting up a system to respond more quickly to complaints. In fact, the automaker has promised to give regional executives a bigger role in issuing recalls based on local consumer complaints, although Mr. Toyoda says that the final decisions regarding recalls will continue to be made in Japan. The company is also holding twice-yearly global quality meetings and more frequent regional quality meetings. And finally, the company is re-committing itself to better training employees in quality control.
Q1: Describe the culture of Toyota Motor Corporation. Why do you think this type of culture might be important to a car maker?
Q2: How do you think a long-standing culture that had such a strong commitment to quality lost its ability to influence employee behaviors and actions? What lesson can be learned about organizational culture from this?
Q3: Do you think it was important for MR. Toyoda to apologize for the company’s decisions? Why? (Think in terms of the company’s stakeholders.)
Q4: what could other organizations learn from Toyota’s experiences about the importance of organizational culture?
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