In the recent past, Toyota has been grappling with the issue of recalls of its main brands in the market. Questions have been raised as to the reason for the massive recalls. What managerial failure may have contributed to this? This paper will look at the strategic implementation of controls, organizational structure and culture that may have been the cause of the massive recalls. This paper will also have a look at what Toyota may have done differently (Holstein, 2010).
The company has too much of a bureaucratic structure that has many rules and many departmental areas. Although it may not be clear how this may have affected the recall, it is evident that it made it worse. The reason is because the managers of the different departments: quality assurance, marketing the administration etc, did not want to bear the cost of accepting the liability. This accelerated the problem as the departments resorted to blame games. The company over the years has been criticized for having weak and ineffective management that has no authority. This may have been the problem that enabled the different departments to engage in blame game and fail to tackle the problem from the start (Holstein, 2010).
The company calls for meetings of board of directors to discuss implementation of strategies in the company every month. When the recall was done, the meeting was done promptly but this time round it was not an implementation and strategy meeting but blame shifting meeting. This series of meetings to apportion blame was critical to the failure of the company to look at the next step. This was made even worse by the highly integrated system that constitutes Toyota ranks. Information and strategy is passed from the lower bottom ranks upwards and before anything is done there is process that is time consuming. This bureaucracy may have served the purpose of delay leading to even more problems (Kageyama, 2010).
It is hard to define the company’s structure straightforwardly. The company is based in many countries and culture definition is wide and dependent on the location of the branches. However the company owns the culture of the parent company that is in Japan. The word Toyota was supposed to be Toyoda but the Japanese chose Toyota as it was associated with luck. The company has a history for quickly settling down any public outcry and mistakes. When it introduced the small car in the US in 1957, it was criticized for its ungainly shape and small size (Porter, 1991). Less than two years later it introduced yet another brand to compete and it did well in the market. This quick response has been the mantra for action in the company. The company is seen to have deviated from this in the latest incident and taking too long to detect and correct the problem in the braking system. Questions are rife as to how the company let all those cars in the market with that fault (Kageyama, 2010).
There is also a distinct bad picture painted in the managerial ranks. The company’s top management has always been regarded as weak. This culture may have found its way to truth evident in the fact that there was no any person in the ranks that noted and sought to correct the problem. The company has had five plants in the United States. However, sometime before the reckless revelation of massive recalls, it had embarked on an expansion strategy. This saw it open many other plants in an ambitious plan to be the biggest automaker in the world and wrestle the title from General Motors (Holstein, 2010).
The Toyota corp. is also criticized for been overconfident at times. Firstly, the company is a secretive and highly non-communicative organization (Porter, 1991). This culture may have entrenched itself to the roots of the company distributaries leading to a bad culture where communication is a big problem. When other companies such as ford corp. and General Motors brands started been highly competitive in the market, Toyota which was leading the market did not do much in its marketing so as to remain visible. But after some time the other automakers successfully were taking away a significant portion of Toyotas market share. This prompted panic in the high ranks in the company leading to poor strategizing to shore up the lost grounds. This lead to improper quality and hence the massive recalls (Holstein, 2010).
The latest CEO of the company Akio Toyoda, the grandson of the founder of the company, is said to have not been ready to take over in the company. This may have lead to poor control in the company leading to poor quality. Another dimension is that the company may have experienced even tighter controls with the entry of the new CEO and hence reacted badly to the detriment of the company. Whichever the case, it is evident that problem of control may have played major part in the recalls. There is also the problem of fallout in the top ranks. This might have been simmering for quite some time. It was revealed in the press release the company was giving. There were a series of contradictions, a sign that someone had lost control of the much needed force to enhance public relations and teamwork. Another highly notable area of control is in the technology used to install the banking system. The software that was used may have failed in the wake of the massive recalls. The question is, was it up to standard and who was supposed to be the quality assurance person in that field? This shows there was laxity in the ranks which lead to poor software and supervision of it (Holstein, 2010).
Holstein, W.J. (2010). Toyota Recall Highlights Deep Organizational Failures. Web.
Kageyama, Y. (2010). Recall Shows New Challenges For Toyota-Way Automotive Industry. New Zealand: Herald News.
Porter, M. (1991). Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press.