Driving for Success- case study

What a difference the passage of time makes. Toyota Motor Corporations first U.S. import in the late 1950s flopped miserably.1 That carthe Toyopet Crownoverheated, vibrated when it went over 60 miles per hour, and looked ridiculous. Despite that dreadful product launch in the all-important U.S. car market, Toyota has vastly improved its business over the years. Evaluations of Toyotas work methods and processes consistently conclude that the companys successes are due to a well-coordinated mix of functional strategies. The company leaves nothing to chance. Four management principles (the 4P model) guide employees: problem solving, people and partners, process, and philosophy. The idea behind these principles is that Good Thinking Means Good Product. And thats where the scien- tific processa significant part of Toyotas culture plays a role. The scientific process is based on the idea that any change requires a rigorous problem- solving process with a detailed assessment of the current state of affairs and a plan for improvement. This approach is so ingrained at Toyota that the system actually inspires workers and managers to engage in the kinds of experimentation that are the hallmarks of an innovative organization. For instance, at Toyotas new Miyagi factory, cars are positioned side-by-side on the assembly line, instead of the tip-to-tail approach used in most car factories. This made the assembly line 35 percent shorter, reducing installation costs and increasing productivity by not forcing workers to walk as far between cars. In addition, the Miyagi plant uses raised platforms instead of dangling car chassis from above as is the norm. These were 50 percent cheaper to install and allowed for lower ceilings in the factory, thus reducing heating and cooling costs. Then, the actual assembly line itself uses quiet friction rollers to move along pallets carrying cars rather than the noisy chain-pulled conveyor belts found in most car plants. All of these ideas reflect Toyotas current phi- losophy of retooling for production with simpler, slimmer and more compact equipment. While Toyota has always been strong in the production area, its other functional strategies also are solid. The company recognizes how important marketing research is. The companys human resource (HR) strategies empha- size education and training, especially as cars became more complex. In research and development (R&D), Toyota is a master. For instance, when Toyota wanted to find a way to make a custom car in five days (something unheard of in the car industry), it relied on R&D to help make that happen. The last couple of years, however, have been challenges for Toyota. It struggled with quality recalls and with extreme natural disasters as the earthquake and tsunami led to critical parts shortages. Although it had been number one in worldwide sales (it surpassed General Motors in 2008), these challenges, as well as the global economic crisis, pushed Toyota out of that top spot. The U.S. car companies have made solid improvements, giving Toyota a run for its money. Yes, competition is alive and well!

Discussion Questions

1. What do you think are the keys to Toyotas success?

2. Do you think production or marketing would be most important to Toyota? Support your choice.

3. Is strategy coordination important to Toyota? Explain.

4. Go to the companys Web site [www.toyota-global.com]. Identify and describe two examples of functional strategies you find there