Leadership Style in Reference to Toyotas Tough Boss - Case Study Example

Evaluation and Analysis Case Study Client Inserts His/her Name Client Inserts Grade Course Client Inserts Tutor’s Name 12/05/2012 Leadership Style in Reference to Toyota’s Tough Boss (Taken from Robbins, Bergman, Stagg & Coulter 2006:600) Case Study Leadership is the act of organizing a group of people or a team in to achieving a common goal. The person in charge of this group or team is the leader who offers direction to the followers. There are different ways in which leader might choose to lead his or her followers. These different ways are known as the leadership styles. According to Dereli (2010), he described an authoritarian is a style of leadership which is also known as the autocratic. This style is used by leaders who want to make decisions alone, having total authority. Negotiation and consultation is highly discouraged by these leaders. Whatever they say is final. This leadership style is good for employees that need close supervision to perform certain tasks. Also when the leader has all the information needed for the task. In addition there are teams that are used to this type of leadership and give best results under this condition. Creative employees and team players resent this type of leadership, since they are unable to enhance processes or be part of decision making, resulting in job dissatisfaction. However this style works best in situations like in the armed forces where there is great urgency and pressure to achieve definite goals. Democratic leader this is a leader who listens to the team's ideas and studies the ideas but he or she makes the final decision. As in Dereli (2010), where it continues to state that this leadership style increases employees’ satisfaction. The leadership style also makes the employees have a sense of ownership after their input was considered when the final decision was taken. When changes arises, this type of leadership helps the team assimilate the changes better and more rapidly than other styles, knowing they were consulted and contributed to the decision making process, minimizing resistance and intolerance. A shortcoming of this leadership style is that it takes a lot of time and often difficult when it comes to decisions making Transactional is a leader who has been given power to perform certain tasks. He or she has the power reward or punish members of the team for their performance. It gives the opportunity to the manager to lead the group and the group agrees to follow his lead to accomplish a predetermined goal in exchange for something else. Power is given to the leader to evaluate, correct and train subordinates. Salaries, benefits, promotions, and praises are some of the incentives these leaders promise their subordinates for effective performance (Filip, Pascal & Pol 1997). Transformational leader aims to make team members better people by encouraging their self awareness and helping them see the bigger picture. The leader motivates his or her team to be effective and efficient. Communication is the base for goal achievement focusing the group in the final desired outcome or goal attainment. These leaders are highly visible and use chain of command to get the job done. Transformational leaders focus on the big picture, needing to be surrounded by people who take care of the details (Filip, Pascal & Pol 1997). The leader always looks for ideas that will move the organization towards reaching their vision. These leaders use their enthusiasm to gain support from the team. They work hard to get different routs which best takes them to realizing the goals of the company. These leaders are more concerns with the long term goals other than short time goal. They act as mentors where they influence good result from the team by demonstrating through their good practice (Graham n.d). According to the case study of Toyota’s tough boss, Hiroshi Okuda exhibits a lot of leadership qualities, he has a cocktail of almost all attributes of the discussed styles of leadership. Hiroshi Okuda believes in being out spoken and aggressive and he justifies this by saying that it is necessary to promote positive changes to a company. (Robbins, Bergman, Stagg and Coulter 2006:600). This is a highly an aspect of transformational style of leadership where he represents himself as hardworking and not shying away from responsibility. Hiroshi Okuda had in mind the future of Toyota Corporation when he decided to go against the employees. He took the Taiwanese offer to build a facility in their country which has proven to increase profits to the company. As a transformational leader Hiroshi Okuda factored all the problems that had lead to the company’s loss of market share to Mitsubishi and Honda. As a leader he was able to not one of the weakness. He found was that they had made a wrong decision of designing a big and expensive Toyota Corolla in 1991 which was against the Japanese taste. Okuda noted that before they were able to make this car cheap enough to be bought their competitors were doing a better job (Graham n.d). One of the strongest attribute of a transformational leader is the value of quick and effective communication in all departments in a company. This lead to the company changing their policies where earlier it took the Toyota three weeks to make a decision where a similar decision would take five minutes in for example Suzuki Motor corporation (Dereli 2010). Transformational leaders take advises from their employees Hiroshi Okuda worked with the vehicle designer. They changed the time from which a concept is developed to a vehicle from 27 months to 18 months. It is now possible make a custom vehicle in five days. Hiroshi Okuda demonstrates attributes of a transactional leader when he replaced one third of the Toyota highest ranking executives due to their inefficient performance and the same time he elevated those who were performing in their department discarding the earlier system where promotion was done according to seniority. A transactional leader believes in awarding and punishing employees now and then. This means that when an employee achieves their goals on time and extraordinary achievements deserve appraisal and rewarding. They also believe that when an employee dose not works to the expected expectation they deserve punishment either demotion or a disciplinary action is carried out (Dereli 2010). Okuda’s leadership qualities are exhibited more when he attacks the Finance Ministry of Japan for trying to destroy the car industry when they drove up the value of yen. This brought about the writing off of the bad loans amounting to billions of Dollars by the Japanese banks. As transformational leader Okuda fight for the right of the car industry from external forces in this case the Japanese finance ministry. Transitional leadership style motivates followers by targeting on their own self interests. These leaders use reward in exchange for a well done job and consequently punishment when an employee does not meet their agreed targets. Contingent reward is a behaviour found in transactional leaders as cited by Covey (2007). A leader explains the job that is needed to be done in addition the leader uses incentives and reward to motivate the worker in achieving expected goals. Hiroshi Okuda dose not exhibit much of this character apart from when he laid off all those employees who were not performing in their department and promoted those who were working hard. To some extend the employees who were left hard no choice other than working hard because their job depended on their hard word which could result to a promotion. In contrast if they did not work as expected of them they risked being fired by the new boss. (Graham n.d), indicates that transactional leadership style has a down side in long run. Most workers are not comfortable working under presser hence often quit their jobs. Others are only there for the reward they do not have the interest of the company at heart. As a result the company will lose good employee. Transformational leader are said to focus more on the team performance as a whole by encouraging team members to think for themselves. They target on making their members concentrate on the future of the company rather than short term goals (BTEC n.d). Covey (2007), includes some of the components of a transformational leader as having charisma in other words, having idealized influence where the leader behaves in an admirably. Follower area inclined to admire this leader hence the leader has an easier time leading them. In the case sturdy Okuda is not afraid to speak his mind earning him the position of the president of the Toyota Corporation and later the chairman of the board. Intellectual stimulation is a trait of a transformational leader where the leader solicits ideas from his or her followers and is not afraid of taking risks. Okuda took a major risk when successfully lobbied for the facility established in Taiwan. This move had been highly condemned by the other employees as a move that would affect company negatively. However Okuda was able to see it through and was successful (Graham n.d). Covey (2007) continues to cite that a transformational leader gives individual consideration. This means that this leader values all the input of all employees. They respect and celebrate individual contributions to the team. Hiroshi Okuda appreciated the input of the companies’ designers while he was seeking a solution in reducing the time a concept takes to materialize If a company is in crisis radical changes are very important. In most cases a company finds itself in crises. This is attributed by many factors including poor decision making over a period of time. Some of these crises include losing market share to the company competitors like the case of Toyota where they had lost their market share in Japan to Mitsubishi and Honda in the early 1995. The company had lost most of their customer after the production of the big and expensive Toyota corolla in 1991. This was purely a result of poor leadership who were not able to understand what their customers wanted from them (Graham n.d). After changes were made in the leadership the company was able to regain back its market share. After was named the president of the company he managed to revive the company back to life. Hiroshi Okuda managed to achieve this through his aggressiveness and courage. He brought in new ideas and new approaches to how the company was conducting its business. He is said to have gone in contrast with the company’s promotion system which was done due to seniority and laid down a third of the executives in the company and promoted those who deserved due to their performance in a span of 18 months. The case study proves that radical changes are very important in rescuing a company in crisis. Leaders are the pillars of a company. When a company is not performing to its expectation it means that there the governing body of the company is not doing its job effectively hence radical changes in its leadership are highly recommended like in the case of Toyota (Debra & Meyerson 2001). Debra and Meyerson (2001), advices on a more genital approach to effectively bring about changes to an organization. She states that radical change in an organization can damage ones career and might not meet the required long term effect that is required. In the case of Hiroshi Okuda his radical changes and aggressive demand for change cost him his job. In 1999 he was removed as the president of Toyota Corporation after he targeted the founding family of this company and offending them in the process. List of References BTEC, [n.d]. Unit 2 Leadership and teamwork in the public services [Online] National Public Services Student Book Sample Material. Available at: [Accessed 11th May 2012] Covey, S., 2007. TheTransformationalLeadershipReport [Online]: Published at: Available at: [Accessed on 11th May 2012] Debra, E., and Meyerson, 2001. [n.d]. Radical change the quiet way [internet]: Harvard Business Review available at: [Accessed on 11th May 2012]. Dereli, M., 2010. Leadership Styles. Saarbrücken: VDM Verlag. Filip, L., Pascal, V.G., and Pol, C., 1997. European Journal of Work and Organizational Psychology. [Online]. Belgium: Psychology Press Ltd. Available at: [Accessed 11th May 2012] Graham, S., [n.d]. Leadership Style [Online]: University of Technology Sydney.Available at: [Accessed on 11th May 2012] Read More