B01ITMK208 INTERNATIONAL MANAGEMENT

ASSIGNMENT INSTRUCTIONS

KEY INFORMATION
Maximum Length: 2500 words
Due: Week 8. Note that late submission will attract a penalty.
Weighting: 30%
Instructions:
Read the case study provided below: ‘Out of Control’ based on J. Katz Lean times for the Toyota Way’, cited in Management, Robbins et al, Pearson Australia, 2012, p116.
Conduct a review of the company and the relevant academic literature, and report on the following areas:
a) Company performance: The Toyota company’s resources, capabilities and performance over the past three years.

b) Culture: Analyse the culture at Toyota Motor Corporation (TMC). Is the culture appropriate to a carmaker?

c) Cultural change: This company has a long commitment to quality, yet appears to have lost control of employee behaviour. What do you recommend can be done to change the culture.

Sections of the report: Title page; Executive summary; Table of contents; Introduction; Company performance; Culture; Cultural change; Conclusion; References.


MARKING CRITERIA:
Executive summary 10 marks
Company performance 25 marks
Cultural analysis 25 marks
Cultural change 25 marks
References and referencing 10 marks
Report formatting 5 marks
Total marks 100 marks


CASE STUDY
‘Out of Control’ based on J. Katz Lean times for the Toyota Way’, cited in Management, Robbins et al, Pearson Australia, 2012, p116.
With a worldwide recall of some 8 million cars and 51 deaths that US regulators say have been caused by mechanical failures in its cars, Toyota Motor Corporation faces a corporate crisis of epic proportions. What happened at the car company that had finally achieved the title of world’s largest carmaker? (It overtook General Motors in 2008.) What factors contributed to the mess it now found itself in?
At the core of Toyota’s manufacturing prowess 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 was 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 one of the ‘most aggressive overseas expansions in automotive history’ and at the same time had a laser-like unparalleled focus on cutting costs. Those four major cost-cutting and expansion initiatives severely strained the company’s organisational processes and employees. One initiative was localised manufacturing. Starting in the late 1990s, Toyota established manufacturing hubs in Asia, North America, Europe and Australia. Such an approach meant relying more on local suppliers and design teams to cater to local tastes.
Another initiative – a massive cost reduction program – was called Construction of Cost competitiveness for the 21st Century, or CCC21. Through an ongoing process of redesigning parts and working with suppliers, more than US$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 per cent share of the global car market by 2010. As of mid-2010, Toyota had an 11.7 per cent 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, apologised for the company’s actions and said: ‘We pursued growth over the speed at which we were able to develop our people and our organisation. 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 any Toyota drivers have experienced.’
So, what is Toyota doing to remedy its problems? In addition to the massive recalls around the world, 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 customer complaints, although Akio 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 its employees in quality control.