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An Analysis of Toyota Case Study Word Count 1,132

In cooperation of business recently, innovation has been significant increasingly in

business management that led many organisations are facing with the change. Stoltzfus et

al. (2011) stated that to manage the change effectively, organisations have to recognise the

influence of change both in external factors and internal factors in order to cope with the

change promptly and not be provide mismanagement (Judge and Douglas, 2009). In case

that Toyota had recalled their cars up to 9 million worldwide, Toyota has turned out to be

the interesting case study of this era that reflects on their mismanagement (Huq, 2010).

The reputation of Toyota gets the impact from the recall series plus, the lately response to

the problems and the big amount of fine, market margin and the perceiving of customer on

safety have given the severe impact on Toyota (Heller and Darling, 2011)

This essay aims to analyse what the major causes behind the problems of Toyota faced

basing on the article by Taylor III (2010). The author applies the relevant theories of

change management to support the argument in this essay. The recommendations for

Toyota are also provided appropriately in order to suggest Toyota to avoid this problem

from its management in the future.

According to Kim (2010), one of the important failed factors is that Toyota had set the very

high goal for their growth in global market even through its previous market had already

vary large; thus, it resulted in the big gap on their management, operation and

implementation. As regarded to the theory of Nadler and Tushman called congruence

model (1997), these became their outputs to control and sustain all the cost, price and

product quality to stay in complete, which were more difficult to do so (Burnes, 2009).

Corner (2010) described that the mistake of Toyota came from the work production

approach that the company has always developed; however, when it was expanded to

global the organisational culture which was the invisible direction, it was not able to

cover to control in all countries with different cultures. Therefore, this made the Strategic

Operations of Toyota unable to remain the completeness in the world class level and seem

to be unsuccessful in its managing change (Burnes, 2009).

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As indicated by Burnes and Jackson (2011), flexible management is possibly significant

for organisations to be success in management of never-ended changing happening in their

environment. Therefore, Toyota should have to build more flexibility in its operation both

in parent company and subsidiaries. According to the case study by Taylor III (2010), the

next point of mistake is that Toyota could not separate to select the proper global strategy,

which is the Global Sourcing, or to hire the company to produce some parts and send for

sharing to use worldwide. Only the wish to economize the cost, it could not take control as

expected but worse was to apply the standard parts with various sizes of car to cut off the

cost instead of using specific parts for each model. This made the floor mats, pedal

entrapment, and other machinery parts became the unexpected big problems (Corner,

2010).

Anon (2010) indicated that beside the production structure, there are some organisational

culture conflicts of Toyota that lead to problems. As insisted by Nadler and Tushman

(1997), the reliability between mechanisms and patterns of rewards should be in high level,

otherwise poor performance, confusion and frustration may result as the wrong signals that

sent by organisation. Therefore, as Toyota continued to focus on the external strategic

goal by thinking that the organisational cultures that they possess was the holy bible that

could be applied to every employee in everywhere. This resulted on the chronic

organisational problems. Too much confident in the firm quality and the close

organisational culture as well as the hierarchism of the management cause the late on

listening. Japanese CEOs never surrendered the iron grip they arranged over the operations

both in Japan and abroad, they also continuously made the entire significant decisions in

Japan. It can be said that instead of globalizing, Toyota colonized (Taylor III, 2010).

According to Kaida (2008), the world in the age of information technology that all the

countries in the world can link rapidly, the several of cultures from each and the scope of

implementation are widely opened thus; organisations are required to have the effective

change management. In case of Toyota, the expansion of power and authority from the

mother country to the subsidiaries should be properly divided to make a better standard, to

bring out more equality and to improve the process and make the quicker decisions. Toyota

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has centralized the important decision in Tokyo so; the implementation in foreign countries

will be late and too slow for the local problems. Though in the big country like U.S. that

possesses the high sale rate, it also cannot make its own decisions.

As stated by Taylor III (2010), U.S. operations have been blocked by Toyota in Japan inorder to prevent them being excessively powerful; Toyota in Japan used the antique rule of

separate and overcome. Toyota operations were separately kept in a functional structure

with the intention of forcing each to report back to Japan, more willingly than arrange

around a single headquarters, similar to its main business rivals; Honda and Nissan. The

cars that sale in U.S. market were designed and selected from Japan, but the fact is that

U.S. shall have the right to choose and decide as it must know and understand better than

Japan about the demand in the market. Moreover, the solutions to problems always have to

wait for the CEO from Japan. And this made the previous solution of Toyota come out so

late and not up to date with the events. The Japanese and American units obviously become

visible to be a not-well fit due to their cultural and temperament. Before decisions can be

done, the Japanese requires intensive documentation, whereas the Americans have a

tendency to be more annoyed and instinctive (Taylor III, 2010).

As mentioned by Paton et al. (2008), in order to managing change effectively,

organisations have to concern on communication and interaction in the operation.

According to Heller and Darling (2011), Toyota leaders must give important to the

communication aspect since to communicate with the groups that important for both

internal and external such as, beside the Marketing Communication, the relationship

building with the shareholders or other public and their employees itself shall be done to 1)

communicate and make understanding about the policy direction and companys strategic

that change according to the new stream to get to know in all level and every organisational

areas, and 2) communicate and solve the crisis that take place and may result as high

impact that rapidly create damages in the short period of time.

Reference

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Anon. (2010). The impact of cultural conflicts on organisations the Toyota case.

[online]. Available from: [Accessed on November 4,2011].

Burnes, B. (2009).Managing change. New York: Pearson Education.

Burnes, B. and Jackson P. (2011). Success and Failure in Organisational Change: An

Exploration of the Role of Values,Journal of change management, Vol. 11. No. 2, pp.133-162.

Corner, M. (2010). Toyota Recall: Five Critical Lessons. [online]. Available from:

[Accessed on November 3, 2011].

Heller, V.L. and Darling, J.R. (2011). Toyota in crisis: denial and mismanagement, Journal

of Business strategy. Vol. 32, No. 5, pp. 4-13.

Huq, H. (2010). Toyota recall update: dealers face full lots, anxious customers [online].

Available from: [Accessed on November 4, 2011].

Judge, W. and Douglas, T. (2009). Organisational change capacity: the systematic

development of a scale,Journal of Organisational Change Management. Vol. 22 Iss: 6,pp.635 649.

Kaida, N. (2008) Spreading the Toyota Way worldwide,Economy, Culture & History

Japan Spotlight, Vol. 27, No. 2, pp. 20-1.

Kim, C.R. (2010). ANALYSIS - Toyota recall debacle highlights dangers of being No.1.

[online]. Available from: [Accessed on November 3, 2011].

Nadler, D. and Tushman, M. (1997). Competing by design: The power of organizational

architecture. New york: Oxford University Press.

Paton, R.A., Paton, R. and McCalman, J. (2008). Change management: A Guild to

Effective Implementation. SAGE Publications, UK.

Stoltzfus, K., Stohl, C. and Seibold, D.R. (2011). Managing organisational change:

paradoxical problems, solutions, and consequences,Journal of Organisational ChangeManagement. Vol. 24 Iss: 3, pp.349 367.

Taylor III, A. (2010) How Toyota Losts Its Way,Fortune, Vol. 162, No. 2, pp. 108-118.

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