CHAPTER 2 | UNDERSTANDING MANAGEMENT'S CONTEXT 65 culture? How is the culture maintained? If you don’t what the company is doing that reflects its commitment belong to a student organization, talk to another student to this culture. who does and evaluate it using the same questions. In your own words, write down three things you Steve’s and Mary’s suggested re
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  CHAPTER 2 | UNDERSTANDING MANAGEMENT'S CONTEXT 65 CASE APPLICATION Out of Control W ith a worldwide recall of some 8 million cars and 51 deaths that U.S. regulators say have been caused bymechanical failures in its cars, Toyota Motor Corporationfaces a corporate crisis of epic proportions. 58 What happened atthe car company that had finally achieved the title of world’s largestcar maker? (It overtook General Motors in 2008.) What factors con-tributed to the mess it now found itself in? At the core of Toyota’s manufacturing prowess is the ToyotaProduction System (TPS), which has long been touted and reveredas a model of corporate efficiency and quality. Four managementprinciples (the 4P model) were at the core of TPS and guidedemployees: problem solving, people and partners, process, andphilosophy. The idea behind these principles was that “Good Think-ing Means Good Product.” Taiichi Ohno, a long-time Toyota executive, iswidely credited as the innovative genius behind TPS. During the 1950s,Ohno, along with a small core of other Toyota executives, developed sev-eral principles of car-making efficiency that became what is now known aslean manufacturing and just-in-time inventory management. “Ohno’s ideasnot only changed the auto industry, they changed late-twentieth-centurymanufacturing.” At the very core of these concepts were attention to detailand a “noble frugality.” However, over the years, it appears that Toyota’s executives slowly lost the “purity” of thatapproach as the once-strong commitment to quality embedded in Toyota’s corporate culture became lost in itsaggressive moves to grow market share and achieve productivity gains.From about 1995 to 2009, Toyota embarked on the “most aggressive overseas expansions in automotivehistory” and at the same time had a laser-like unparalleled focus on cutting costs. Four major cost-cutting andexpansion initiatives severely strained organizational processes and employees. One initiative was localized Toyota Motor Company PresidentAkio Toyoda, grandson of the com-pany’s founder, bows in apology dur-ing a press conference where heannounced a global vehicle recall.Toyoda’s gesture of bowing is theJapanese way of publicly expressingremorse as an act of contrition to re-store faith in the company’s brands. culture? How is the culture maintained? If you don’t belong to a student organization, talk to another studentwho does and evaluate it using the same questions.  Steve’s and Mary’s suggested readings: G. Barna,  Master Leaders (Barna Books), 2009; Terrence E. Dealand Allan A. Kennedy, Corporate Culture: The Ritesand Rituals of Corporate Life (Perseus Books Group,2000); Edgar H. Schein, The Corporate CultureSurvival Guide (Jossey-Bass, 1999); and Kim S.Cameron and Robert E. Quinn,  Diagnosing and Changing Organizational Culture (Jossey-Bass, 2005).  Find one example of a company that represents eachofthe current issues in organizational culture. Describewhat the company is doing that reflects its commitmentto this culture.  In your own words, write down three things youlearned in this chapter about being a good manager.  Self-knowledge can be a powerful learning tool. and complete any of theseself-assessment exercises: What’s the Right Organiza-tional Culture for Me? How Well Do I Respond toTurbulent Change? Am I Experiencing Work/FamilyConflict? Using the results of your assessments,identify personal strengths and weaknesses. What willyou doto reinforce your strengths and improve your weaknesses?  manufacturing. Starting in the late 1990s, Toyota established manufacturing hubs in Asia, North America, andEurope. 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 21stCentury, or CCC21. It was amassive 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 ofCCC21. Under this program, more savings were achieved by making the entire development process cheaperand by further cutting parts and production costs. And finally, the Global 15 initiative was a master global planfor attaining a 15 percent share of the global car market by 2010. As of mid-2010, Toyota had an 11.7 percentshare of the worldwide car market. However, this “combination of high-speed global growth and ambitious costcuts led to the quality lapses that tarnished the once-mighty brand.” Toyota’s president, Akio Toyoda apologizedfor the company’s actions and said, “We pursued growth over the speed at which we were able to develop ourpeople and our organization. I regret that this has resulted in the safety issues described in the recalls we facetoday, 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 the massive recall, the company’s presidentsays that it is setting up a system to respond more quickly to complaints. In fact, the automaker has promisedto 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 alsoholding twice-yearly global quality meetings and more frequent regional quality meetings. And finally, the com-pany is re-committing itself to better training employees in quality control. Discussion Questions 1. Using Exhibit 2-5and the information from the case, describe the culture at Toyota MotorCorporation. Why do you think this type of culture might be important to a car maker? 2. How do you think a long-standing culture that had such a strong commitment to qualitylost its ability to influence employee behaviors and actions? What lesson can be learnedabout organizational culture from this? 3. 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.) 4. What could other organizations learn from Toyota’s experiences about the importance oforganizational culture? 66 PART ONE | INTRODUCTION TO MANAGEMENT CASE APPLICATION E ven when times are good, the department store industry is one of the toughest industries to compete in.Like many of its competitors, Kohl’s Corporation struggles to find a way to continue its successes evenwhen faced with a drastically changed external environment. 59 Based in Menomonee Falls, Wisconsin,Kohl’s has more than 1,050 discount department stores in 49 states. The company has aggressively moved intothe western and southern United States, although nearly a quarter of its stores are located in the Midwest. In2010, the company had revenues of over $17.1 billion and profits of $991 million. One analyst has describedKohl’s as “the best-positioned department store in this economy and one of the leading retailers with respect toinventory management, technological innovation, and merchandising and marketing execution.” However, tocontinue its successes, it’s important that Kohl’s understand its external environment.The retail shopping environment has changed. Customers became disenchanted with the shopping experi-ence at many retail establishments. Long checkout lines, missing or vague product information, out-of-stockproducts, incorrect price tags, and scarce and often unknowledgeable sales staff made the shopping Dressing Up


Apr 16, 2018
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