International Culture- Toyota’s Woes, Research Paper Example

Toyota cars have been synonymous with quality and performance for so long now that it is impossible to imagine that an automobile company whose vehicles can still be seen on obscure roads in the remotest parts of the world is in trouble. The zealous work of the post World War II Japanese citizens, stung by the huge shock of the atomic bombardments brought them into a reckoning comparable to the best in the world in terms of engineering design, economy and perfection in the automobile sector. There relentless hard work and marketing genius which promoted fuel efficient but luxurious as well as powerful cars soon took the world’s fancy which sounded the death knell for the American car industry.

Although Toyota cars were not known for quality in the 60s, their improvements in design and fuel efficiency gradually made them leap forward after the 1980s until they overtook America’s largest car maker, General Motors as late as in the year 2008 as the world’s biggest car maker (www.economist.com). Originally manufactured in Japan only, Toyota gradually spread its tentacles worldwide with the opening of manufacturing facilities in the United States and later in China and Europe which enabled them to garner a better market share (Dizikes, 2010). This allowed for producing more cars and catering to third world countries as well which assisted Toyota in extending its sales worldwide. In fact, this single factor might be responsible for the present crisis Toyota finds itself in. American, European and Asian workers might not have been able to follow the thorough and meticulous work attitude of the Japanese worker which sometimes develops only in a mono cultural setting due to the consistency in values and lifestyles. In precision engineering, a single mistake can transform into a major crisis.

Although whole of the world is embroiled in a recession presently and this can be expected to affect the automobile sector too, which is evident in the deplorable state of General Motors of the United States at present. Toyota’s newfound problem though is unique in nature as it has been forced to recall many of its models due to one technical snag or the other. The latest one is the sudden and unexplained acceleration of its cars which has lead to many fatal accidents (latimes.com). This has forced Toyota to recall almost 43.3 million cars and trucks worldwide. This has affected business in all the major markets which include the United States, Europe and China.

New problems involving the engineering of modern cars are even more complicated in today’s world as cars are becoming increasingly complicated due to the over reliance on automation and extra facilities such as automatic computer controlled fuel injection systems, hybrid cars with dual fuel options, cruise control, power steering and disc brakes which multiply the chances of component failure (Dizikes, 2010). Stiff competition from emerging car makers like the Korean Hyundai, Kia and the reorientation of the European giants like Fiat, Mercedes and BMW who are foraying into the economy segment has also affected Toyota’s market in which once it held a monopoly.

In its eagerness to become the biggest carmaker in the world, the Toyota Corporation overlooked the current dismal financial scenario of the world, which in combination with the rising fuel crisis as an after effect of the Gulf War has made a car difficult to afford for the common man who is opting for public transportation and car pools in order to conserve financial resources. Riding on decades of success, Toyota’s share suddenly plummeted by 17 percent in the first week of November 2008 which was its biggest decline in 18 years (Demerjian, 2008). Toyota’s own heavy investment into its infrastructure was attributed to this sudden decline by a J.P. Morgan Securities analyst, Takaki Nakasishi (Demerjian, 2008). This in combination with Toyota’s resolution not to downsize its staff has further complicated the situation for Toyota, according to the analyst.

Although Toyota maintained its leadership position in the last few decades, it was never comfortable with it as it always felt threatened of being displaced by other automobile giants such as the General Motors and numerous hitherto unknown Chinese companies throughout its reign (Dizikes, 2010). The author believes that this paranoia is a culture within the Toyota Corporation which has stayed with it for good. Another cultural aspect within the Toyota organizational setup which was initially beneficial has proved detrimental according to the author. He believes that the ‘intimate mentoring-apprenticeship model’ that the company nurtured for so long failed due to the sheer increase in the size of its organizational setup.

Nevertheless, despite the hiccup which Toyota is experiencing at present, the company possesses the resilience and the financial resources to put itself back on track. Backed with the prowess of its qualified engineers, extensive infrastructure and the Japanese never-say die attitude the company is clawing its way back to success once again. With modern organizational maneuvers’ and reorientation it can retain its number one spot in the automobile sector as the nearest rival General Motors is in really bad shape at present. The top managers in Toyota Corporation were smart enough and already aware of the problems they might face in adverse circumstances and made adequate provisions to sustain the corporation through the lean periods (Dizikes, 2010). Competition from other companies such as Honda and other Japanese, Korean and Chinese brands has spurred the management to develop models which are more economical and in tune with the present economic scenario, at the same time maintaining the exacting standards it has developed for itself. Despite advice by some analysts to reorganize its management by involving more outsiders to bring fresh ideas into its organizational setup, the management is sticking to its guns and hierarchical pattern of organization which had worked so well in the recent past. 

Works Cited

Demerjian, D., Detroit Is Tanking, But Toyota’s in Trouble, Too, 2008, online article accessed March 1, 2010 at: http://www.wired.com/autopia/2008/11/gm-and-ford-may/

Dizikes, P., 3 Questions: Steven Spear on Toyota’s troubles, 2010, online article accessed March 1, 2010 at: http://web.mit.edu/newsoffice/2010/3q-spear.html

Toyota Accelerating into trouble, online article accessed March 1, 2010 at: http://www.economist.com/opinion/displaystory.cfm?story_id=15498249

Toyota’s troubles accelerate, Editorial, accessed Feb. 28, 2010 at: http://articles.latimes.com/2010/jan/29/opinion/la-ed-toyota29-2010jan29