Toyota Case Essay

1195 words - 5 pages

Based on strategic, structural and cultural challenges, discuss the drivers of Toyota’s accelerator crisis. Why was Toyota facing a recall crisis?
Toyota was facing the accelerator recall crisis because the company and its management became more focused on growth and less concerned with the TPS principles the company had adhered to for much of its existence. Lean operations with a focus on the bottom line and a very lackadaisical support system in North American oversight as well as deficient TPS training proved to be a cultural disadvantage to a highly centralized Toyota management team (Gretto, Schotter & Teagarden, 2010).

How well are Toyota’s management, employees and external ...view middle of the document...

Toyota’s management should have accepted full responsibility immediately and repaired the issues as fast as possible to assure that both customer and quality was protected (Gretto, Schotter & Teagarden, 2010).
What should Mr. Akio Toyota. Toyota’s president, do now to restore Toyota’s reputation and position Toyota for sustainable competitive advantage?
Mr. Toyota should return the company to its previous management philosophy, TPS, and decentralize the management system to allow both training and knowledge sharing throughout Toyota’s foreign subsidiaries, especially their U.S operations. This will allow local managers outside of the corporate home office to interact with top executives and enable them to make decisions proactively instead of reactively. This will negate both the cultural lag that froze U.S. management and alleviate pressure from top managers having to deal with problems after they’ve already become serious (Gretto, Schotter & Teagarden, 2010).
Has the company lost sight of its long-term philosophy, a key principle behind the Toyota Way?
Toyota’s long-term philosophy consisted of both a family run organization and a philosophy system, TPS, that concentrated on both customer satisfaction and quality before all else, neither of which were being adhered to as the accelerator crisis began to take its toll in 2010. Toyota in 1995 moved away from family management and as a result of a weak market share, began a several year growth goal of profit first. In order to reach these goals management would have to sacrifice quality in the long run, which eventually led to problems such as the sludge and accelerator recalls. Exacerbating the situation further was the centralization of information and cultural disparity that ignored the need for both formal training in TPS and a decentralized system for information collection, sharing and review (Gretto, Schotter & Teagarden, 2010).

How many dimensions of quality defined in Chapter 2 of the textbook are not properly addressed in Toyota?
The dimensions of quality not addressed are as follows:
Performance: The basic operating characteristics of a product.
Both the sludge issue and the accelerator problem caused significant performance issues; with the sludge problem causing complete engine shutdown and requiring replacement with the accelerator causing crashes. Both instances required mass recalls and were well within warranty expiration dates.
Reliability: The probability that a product will operate properly within an expected time frame.
On several occasion Toyota faced reliability problems with both engine slugging and accelerator issues. Both instances caused a mass recall only after Toyota downplayed the problem and caved in to major consumer pressure. The sludge issue would cause engine seizure within the first...

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