Decision-Making and the Fundamental Principles of Management at Toyota - Case Study Example

STRUGGLING СОMРАNY ТОYОTА - DЕСISIОN MАKING АND THЕ FUNDАMЕNTАL РRINСIРLЕS ОF MАNАGЕMЕNT АT ТОYОTА Name Institution Date Section A: Profile of struggling company Background Toyota was founded by KIICHIRO TOYODA in 1937 due to the contribution of his father who created automobiles and had a Toyota industry under his belt. The company has it’s headquarter located in Toyota Aichi, Japan. The company is a major contributor in the global automobile industry and was ranked 13th worldwide in terms of revenue. In the motor industry, Toyota was ranked the best, coming ahead of Volkswagen and General Motors. Their annual output of over 10 million vehicles take record as the most ever produced in one year by a single company. Toyota has brands such as Toyota brand, Hino, Lexus, Scion and Ranz. Why is Toyota COMPANY struggling? Toyota has had a bad business experience in the past especially after the period in 2010 when it faced quality issues leading to recall of several vehicles and several lawsuits. Quality compromise in a company as large as Toyota going without detection and leading to recall of over 3.8 million vehicles in the United State alone is a sign of incompetence in the management system and failure by the management to give workers a good working environment where they fully feel responsible for their mistakes. According to fundamental principles of management as illustrated by Henri Fazul, there are fourteen management principles that could help accompany or organisation achieve its best. In this case of Toyota, the system might have violated the following principles: Division of work: Division of work help identify workers proper area of interest and through specialization, the efficiency and effectiveness is significantly improved. Therefore if Toyota would have had engineers specialised on safety, the self-acceleration problem should have been realised or the response would have lessen the trouble by undertaking quick research and accepting the mistake rather than play blame game card. Authority and Responsibility: Through a well enacted authority in an organization, the urgency to be responsible by the subsequent employees enhances performance since every level realizes the need of being 100% at all time. Unity of Direction: Unity of direction is achieved in an organization where everyone identifies his role and how the role contributes to the overall objective. Therefore each person gives special focus on their area of specialisation, to get the best. Remuneration: can be monetary OR none monetary and is used to motivate employees to achieve their best. Order: focused on giving the best working environment to enhance quality of service offered by the employees. Source (Vliet, 2014) Employees’ perception and organizational culture According to (Kayla, 2008) organisation culture is levels of performance developed over a long period of time by competent employees to enable them survive in external adaptation and internal company integration then passed over to the incoming new members. The organisation culture therefore carries over beliefs, values, customs, practises and tradition. Culture is developed over time and according to ("The Toyota Recall: Understanding the Real Problem", 2010) good managers have in the past used phrases like, “people working together achieve more” and, “all people are important” to create a culture where equity, unity of direction and Esprit de corps are observed. Toyota had built a culture of competence and quality delivery in the past managing to compete and win in the global market. Kalb (2016) believes Toyota was doing fine in the past and even state that Lexus, which is a brand of Toyota had an earlier victory in quality in the global market. Therefore the quality scandal might have caused Toyota losses both financial and in terms of image of the company to the buyers. Therefore the organisation culture and perception of the employees must have been wrecked by the whole ordeal. For a successful business environment with profound culture, the company and the employees need to focus on: The vision and mission clearly articulated Leadership system that walk the talk High communication and trust between employees. Good working environment that align itself with the organisation core values. Adaptability, responsiveness and talent that thrive on change Communication Large organisation like Toyota always suffers from various communication issues that may affect the overall quality of their products. Some notable causes of communication problems in an organisation are: Long chain of command leading to information deformation. Vague messages where the information is insufficient for complete understanding. Wrong media choice hence failure to capture target group. Language misunderstanding due to complexity and background Communication is a major cause of job dissatisfaction in an organisation and that can cause serious drop in quality of the products produced. Therefore if Toyota experienced problem related communication, the management should have addressed the issue through: Encourage frequent end to end communication in all directions through encouraging employees to open up. Embrace alternative communication method to the one used earlier. Reduce internal emailing Section B: Management plan recommendation Following the problem recently experienced by TOYOTA, the management need to improve at all levels and customers need to realize the change and improvement to forget the past. All the 14 aspects of fundamental principles when applied effectively will improve the management of any organisation .Therefore looking at the each fundamental principle independently, we can say that: Division of work: Through work division, the production will be efficient as every worker knows his targets. It also allows for specialisation which makes workers to focus on areas they are good at and that enhance quality. Authority: The management should exact orders that need to be followed respectfully and with responsibility. Once the employees feel the responsibility to deliver, they will automatically raise their game to meet the expected standards. Discipline: Mission and vision of a well-managed company has to advocate for good conduct and respectful interaction between workers. That will create a better working environment for excellent performance. Unity of Command: Each and every employee should only receive orders from one supervisor to allow consistency of concept and eliminate confusion. Toyota needs such line of communication to avoid confusion and make responsibility easy to trace. Subordination of individual interest to the general interest: It is ethical that the interest of the organisation take precedence before the interest of any employee and that make primary focus to be universal. Remuneration: well paid workers are more motivated to works towards achieving the company objectives than under paid workers. Toyota should ensure at all time that workers are happy and motivated to work. The degree of Centralization: Toyota being a big organisation should strive to achieve balance in decision making and that will encourage the lower technical ranking employee to communicate in case of any problem. Scalar chain: The hierarchy of command has to be clear and each employee should be trained on the order of reporting to enhance consistency and organization. Order: Employees must be accorded the best working environment which is safe, clean and tidy but still have right resources to enhance success. Equity: The management has to be impartial and treat employees equally without favouritism. Stability of tenure of personnel: Excellent management of workers position and development has to be done well to give workers reason stay. Initiative: Employees should be given expression freedom and that will allow them come up with ideas that can improve the organisation. Esprit de Corps: involvement and unity among workers as they strive to achieve the goals of the company. How fundamental principle can be implemented and communicated Companies employ qualified employees in various departments to coordinate successful management of the organisation. To implement the fundamental principles, each employee has to understand they exist and why they are so important in enhancing the competent management of Toyota. Toyota therefore can organize inter-departmental training to enhance the employee understanding of the management principle, importance of quality in service delivery and the importance of communication in enhancing uniformity, quality and competence. Therefore to enhance communication at Toyota, the management need to: Encourage direct communication between manager and employees without need of a third party. Communicated information need to be spelt out without assuming that each and every person understand the concept. Job description should be written to eliminate ambiguity and give job clarification. Report preparation of employees weekly achievement Assess level of communications and by asking them to give feedbacks Source (Joseph, 2016) How fundamental principle increase employee performance The working environment dictate the quality of services the employees can offer and a good percentage of employees enhance their performance when working in a motivating environment. Since the fundamental principles enhance respect among workmates, enhance communication, create sense of responsibility, access to good remuneration and treatment equality, the employees will have a good working environment that allow them give competent service to the employers. In a another aspect, the fundamental principle allow employees to be consistent to build the desired experience in areas they feel more confident in and that coupled with the specialization concept, the employees will give their best as their talent is identified. Therefore the fundamental principles enhance communication, motivate workers, and create respect amongst workmate hence generally improve the working environment for better results. TOYOTA there needs to be proactive and competently apply the key aspects of the fundamental management principles so that workers feel motivated, workers feel part of the success, workers feel their contribution are listened to and they are respected for their contribution. Ethical principles application on fundamental principles Ethics are necessary in the business environment or an organisation to increase chances of better management and mutual respect. We have four categories of ethical principles as shown below: The principle of respect of autonomy: The principal exert the need for honesty in dealing with other and why we should be obligated to keep promises. Honesty and promises keeping enhance coordination and unity in a working environment. Therefore the principle relate well with fundamental principles such as responsibility, order, respect and Esprit de corps. The principle of beneficence: The principle encourages as to taking positive step in preventing harm through being good in our actions. Our action should reflect our intension to do good hence workers should strive to achieve the best in whatever they do. The principle of nonmaleficence: The principle encourages us to reduce harm to others especially in cases where it cannot be avoided. Workmates can reduce harm on others through different ways which basically fall within the fundamental principles such as respect, responsibility and Equity. In the setup of TOYOTA, workers can ensure they cut the harm from the third party by ensuring they are accountable for improper quality and any other failure to meet the expected standards. The principle of justice: The principle advices people to treat others equally, fairly and impartially. There are many fundamental principles that is better served in an environment where employees are treated with equality and impartiality. Fundamental Principles such as Esprit de corps, initiative, respect, responsibility, equity, order and scalar chain can only be achieved through working environment where the principle of justice is practised. Conclusion Toyota according to evidence accumulated from the reaction after the emergence of the recall scandal and various lawsuits, the problem in Toyota became clear as their response to the same only resulted to more problems. From an honest perspective, the company would have owned up and order proper research from external experts regarding the problem that caused the self-acceleration. However, the denial only rallied more people to look down on their product and that might have darkened their image. The company therefore failed to deliver proper communication to its clients and went further to run away from the troubles. Therefore to ensure that the problem experienced by Toyota is a forgotten past and they can attract more customers, the management need to follow the following recommendations. Organise inter-departmental training on communication benefits and various fundamental principles of management. Use external experts to verify and investigate quality related issues. Organise communication training for the management to improve their ability to address strong issues such as the quality issues experienced earlier competently. Higher very qualified marketing experts to re-assert the quality of service offered by Toyota to its customers. Create a working environment that enjoys equality, impartiality, initiative and proactive involvement of employees. References Joseph, C. (2016). Techniques for Improving Communication in an Organization.Smallbusiness.chron.com. Retrieved 24 March 2016, from http://smallbusiness.chron.com/techniques-improving-communication-organization-161.html Kalb, I. (2016). How Toyota's Crisis Management Failures Added To The Billion-Dollar Settlement. Business Insider. Retrieved 24 March 2016, from http://www.businessinsider.com/toyota-paying-billions-because-of-marketing-failures-2012-12 Kayla, S. (2008). Perceptions of Organizational Culture by Employee Level: A Case Study.MS Applied Psychology, 5(4), 3-34. Retrieved from http://www2.uwstout.edu/content/lib/thesis/2008/2008schnackyk.pdf The Toyota Recall: Understanding the Real Problem. (2010). Businessweek.comRetrieved 24 March 2016, from http://www.businessweek.com/managing/content/feb2010/ca2010029_503075.htm Vliet, V. (2014). 14 principles of management by Henri Fayol - ToolsHero. Toolshero.com. Retrieved 24 March 2016, from http://www.toolshero.com/management/14-principles-of-management/ Read More