Questionable Organizational and Management Practices at Toyota

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Introduction

Business entities and similar establishments are considered some of the most important entities in many societies across different regions of the world. With their aim being to maximize profits, different organizations engage in the production of various goods and services which in one way or another satisfy the needs and wants of customers. Despite the various activities performed by organization in order to make profits, it is imperative to note organizations also engage in various corporate social responsibility programs such as building schools, roads, and other infrastructure as a way of giving back to the society, their main source of income. In so doing, it is therefore clear that organizations indeed are important entities in the society. However, despite the different beneficial roles organizations have played in the society over the years, there exist various questionable management and organizational practices which organizations such as Toyota have been associated with. As a result, these organizations have faced a lot public scrutiny regarding the questionable management and organizational practices conducted.

Problem Discussion/ Review

Among the very many organizations in the world today, Toyota Motor Corporation is one world’s famous and largest automakers organization that has been faced with questionable management and organizational practices that have been criticized a lot in the public space. For a very long time, Toyota Corporation has been seen as a pinnacle of the Japanese innovation, engaging in the manufacture of industrial pioneer and quality products (Toma & Naruo, 2017). Its huge base of vehicles is well recognized for fuel efficiency, reliability, and being economic friendly. Nowadays, Toyota has attained record breaking achievement for the production and manufacture of cars with more complicated functionality and features. The growing numbers of sensors, computer chips, and wire embedded in some of Toyota’s automotives has greatly changed the automobile industry over the years. According to Eichelberger & McCartt (2016) finding, it is imperative to understand that, as more and more technology systems are embedded in these modern vehicles, it has become difficult in terms of quality control testing and as a result causing troublesome uncertainties and interferences. In regard to this, the occurrence of any small electronic problem in the complicated high technology systems or an influence as a result of environmental factors can easily cause failure of the vehicles.

However, despite being the number one organization globally in providing, economic friendly and highly reliable vehicles, Toyota leading position has shifted over the years due to some questionable organizational and management practices that have caused public uproar. The case of a highly publicized deadly accident involving a Lexus ES 350, one of Toyota’s main vehicles that claimed the lives of four individuals on 28th August 2009 in the United States triggered a public uproar on the questionable organizational and management practices at Toyota Motor Corporation (Los Angeles Times, Oct 25 2009). This accident resulted from a stuck gas pedal due to an ill-fitted floor mat which caused the vehicle to loss control causing the fatal crash. Before the occurrence of this fatal crash, quality safety and complaints problems involving some of Toyota’s vehicles had been brought in the spot light by increased investigations involving The National Highway Traffic Safety Administration (NHTSA) in the United States. In response to this issue, Toyota recalled a specific number of some of its vehicles as a form of accountability in order to remedy problems with braking acceleration pedals, and floor mats all of which were related with unintended acceleration issues. However, despite the decision to recall the vehicles, stories had already made the headlines globally. According to Camuffo & Wilhelm (2016) findings, in the United States where the incident occurred, Toyota received unprecedented attention from the media organizations, most of which published negative news on the issue, questioning the organizational and management practices, the reputation, and the quality problems in Toyota’s vehicles.

Questionable Organizational and Management Practices

Based on this case involving Toyota Motor Corporation, it is clear that negligence and ignorance of safety are some of the major questionable organizational and management practices which caused public uproar. According to Feng (2010), before the tragic accident that claimed four lives in the United States, quality safety and complaints problems involving some of Toyota’s vehicles had been brought in the spot light by NHTSA. However, instead of responding to the complaints raised, Toyota Motor Corporation ignored the issues, including evidence involving acceleration issues in some of its cars, an issue that has been in existence for almost a decade (Gorman, 2010). In addition, Toyota Motor Corporation also displayed neglect by failing to install a braking override system which it knew could prevent accidents among its customers.

Apart from negligence and ignorance of safety, denial is another major questionable organizational and management practices in the case of Toyota Motor Corporation that has been criticized a lot in the public space. According to Heller & Darling (2011), several malfunction that were identified by customers in different Toyota products, but publicly ignored by Toyota’s Management remains one of the instances that displayed management denial. For instance, in the case involving Lexus ES 350 accident which claimed the lives of four family members, Toyota American Sales organization (TMS) attributed the fault of the accident to an incompatible ill fitted floor mat, which interfered with the accelerator pedal. However, the NHTSA dismissed this finding as in accurate indicating that the major cause of the accident was related to floor pan and accelerator design (Feng, 2010). Bearing this in mind, it is clear that Toyota Motor Corporation was still in denial to acknowledge the various malfunctions with its cars and take corrective measures sooner than later.

Reasons for the Questionable Organizational and Management Practices

The Need to be a Global Leader in the Automotive Industry

One of the major reasons for questionable organizational and management practices in Toyota Motor Corporation is the urge to become the leading company in the automobile industry. Executives of a company like Toyota deciding to establish control by expand the automobile industry towards becoming the world’s number one automobile organization, is one sudden and bold move that could lead to the change of company’s goals and result to certain risks as well. Pressure and expectations of high growth of the company, could result to the abandoning of the company’s old ways which were steady and slow growth of the company, which for the longest time have enabled the company to make quality cars and grow in the market. The company’s desire of being number one worldwide, stretch its supply base, and resources making it so difficult for the company to focus on good quality cars that satisfy customer needs and have less malfunctions. Therefore, in an effort to establish control in the automobile industry and become the leading organization, Toyota Motor Corporation engages in the production of more vehicles ignoring safety issues which in turn result to various malfunctions that cause economic losses in terms of diminishing vehicles value and most importantly loss of lives as in the case involving the Lexus ES 350 which claimed the lives of four individuals.

Pressure to Increase Market Share and Gain Competitive Advantage

For many organizations around the world today, the desire to establish control by being the leader in the industry is one of the major reasons behind questionable organizational and management practices. Apart from establishing control, the desire by Toyota Motor Corporation to become a leading company in the automobile industry can also be a result of the shareholder theory. According to Tse (2011), the shareholders theory argues that the company’s main responsibility is to ensure that there are maximum returns to the shareholders. By engaging in the production and distribution of more vehicles in the market in effort to maximize shareholders income, organization such as Toyota Motor Corporation may be carried away by this idea and instead produce malfunctioning and ignorant safety issues vehicle in a hurry to attain and satisfy shareholders needs. As a result, this leads to some questionable organizational and management practices that have been criticized a lot in the public space.

Complacency

Apart from desire to become the leading automobile company, in the automobile industry, complacency is another major reason that has resulted to the questionable organizational and management practice in Toyota Motor Corporation which has caused a lot of public uproar (Cole, 2011). The invention of Toyota Production System was one of the very successful achievements accomplished at Toyota. This system accomplished some of the biggest achievements something that made Toyota Motor Corporation forget the need to worry about being vigilant with their product manufacturing processes. This system established control for Toyota Motor Corporation over its manufacturing processes and as a result limiting on site supervision. Toyota Motor Corporation felt that it had control over all is manufacturing processes and in so doing limited its vigilance with their manufacturing processes. This however resulted to some of the major issues such as quality problems which in one way or another led to questionable organizational and management practices within Toyota Motor Corporation.

Leadership

Leadership decision making is another major reason that resulted to the questionable organizational and management practice in Toyota. Toyota Motor Corporation is one of the many organizations that are guided by their own established philosophies. In the case of Toyota “Genchi Genbutsu” philosophy (Go to the source to get the facts) became hard to follow due to numerous management levels between the problems and the decision maker. Due to this, manufacturing processes were happening all over the world. The corporate headquarters located in Japan continued making decisions from a distance instead of adopting inputs from the local sources. As a result, this contributed to a lot of confusion thus resulting to improper functioning which lead to the production of malfunctioning vehicles. In regard to this, it is therefore clear that the lack of control in Toyota Motor Corporation also resulted to some of the major issues in production.

Pressure to be a Cost Leader

Pressure resulting from cost reduction is another major element behind the questionable organizational and management practice in Toyota. Many automobile manufacturers located in various parts of the world including Toyota Motor Corporation all have cost reduction pressures. Cole (2011) indicates that in an effort to establish control over cost, Toyota started purchasing locally manufactured products to their bases of operations instead of bringing this equipment from Japan. In so doing this resulted to more complexities and more suppliers in the Toyota system. This added more stain to Toyota Motor Corporation engineering teams leading to the production of poor quality malfunctioning vehicles. Bearing this in mind, it is therefore clear that, Toyota Motor Corporation pressure to control the cost of production may have resulted to various cut back which instead resulted production of poor malfunction vehicles that ignored safety issues. In addition, pressure to reduce the production cost may also occur as an effort by the management to maximize the shareholders incomes and satisfy the shareholder theory. In so doing, this results to the creation of malfunctioning vehicles.

Conclusion

In conclusion, the role of business entities in the global societies cannot be ignored. They are regarded as one of the key pillar of any society because of the benefits they yield to the overall growth of an economy and a society. Despite this, various organization such as Toyota Motor Corporation, one of the world’s leading automobile manufacturers have been identified with questionable organizational and management practices that have faced criticism for the public domain over the years. For instance, negligence, ignorance, and denial remain to be some of the common questionable organizational and management practices that Toyota Motor Corporation has faced over the year. These are negative externalities that have poor consequences on societies and other stakeholders. With this in mind, it is important to note that these issues are as a result of various reasons such as the desire to establish leadership control in the automobile industry, as well as the desire to control costs in order to minimize the shareholders incomes. By entertaining these practices, Toyota Motor Corporation has been faced with various challenging issues such as customer complaints on the quality of their products.

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