The Impact of Financial Crisis on Honda - Research Paper Example

The descriptive method of research is adopted. Accordingly, Creswell (1994) stated that the descriptive method of research is to gather information about the present existing condition. The emphasis is on describing rather than on judging or interpreting. The aim of descriptive research is to verify formulated hypotheses that refer to the present situation in order to elucidate it. For this study, the descriptive research method was employed in order to identify the impact of competence and sustainability in the automotive industry of Honda.

This study looks at the success that Honda Corporation has had in managing social capital in its supply chain. Using self-report surveys from 120 participants at a Honda-sponsored supplier competition, researchers find that those people who participate in the quality-teams report that they are more satisfied with their work, feel that they improved the effectiveness of their company, and continue to offer suggestions to improve their supplier's operations.Resources that are valuable especially human resources, rare, and can be exploited by the organization can produce sustained competitive advantage and earn above-average economic performance (Barney, 2001).

A lot has been written about the value of people in organizations. Huselid and Becker (1997) found that a one standard deviation improvement in an organization's human resources system could increase shareholder wealth by as much as $41,000 per employee. Barney (2001) contends that successfully managing relationships can be a source of resource-based competitive advantage. But the financial crisis has crept into the auto companies and many of the giants like Honda and Toyota are facing the crisis with severe cuts in production, sales etc.

Honda declared its shock withdrawal from Formula One of the global financial crisis, terminating an association which began in the 1960s. This has led to raising further fears over the sport's future (Source: http://www.asiaone.com).Honda Motor president Takeo Fukui made the announcement at an emotional press conference, repeatedly apologizing to fans, staff, drivers and F1 authorities. He said 2008 is Honda's last season. The Japanese carmaker will not provide its engines to any other teams (Source: http://www.asiaone.com).

"This is a complete withdrawal. The future is a blank sheet," he said. "Five years from now, I think history will show we made the right decision" (Source: http://www.asiaone.com).