Production Processes Selection

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Toyota created a huge complex issue by trading value, customer trust, and quality in order to expand globally and cut costs. Toyota’s focus was increasing profit but unfortunately they lost their value and family culture due to their recall crisis.

How effectively has the company managed the tension between global standardization and local responsiveness? Have the company's value chain activities been managed effectively?

I believe their leadership team was so disconnected from the U.S market that they believed the management system they had was doing their job. Managing from abroad in a global market is more complex than they thought. For 15 years, the nonfamily management aggressively drove Toyota’s growth in the U.S. and various overseas manufacturing companies (Greto, Schotter, & Teasargen, 2010). Toyota’s leadership team disregarded the culture and ethical standards in the U.S. and was incapable of implementing a good ethical management process that fits the culture of the company.

Toyota’s trade-offs were sacrificing quality and customer’s safety for their dynamic expansion and cost reduction. They might built a strong reputation in the Japanese market for their cars but they scarified quality in other countries.

In 1937, Toyota was established as an independent company focusing on truck production for the Japanese Army during WWII (Greto et al, 2010). Toyota built a tight connection with suppliers and Japanese companies that when they wanted to expand globally they had to deal with vendors they were not familiar with. They were not prepared for this dynamic change that hurt them more than it was successful. In addition, they did not exceptional engineering team that audited such vendors which opened the doors for poor quality products.

Very important other companies should learn from Toyota’s unfortunate experience is not to sacrifices principles for your core values and always treat your customer as priority.

References

Greto, M., Schotter, A., & Teagarden, M. (2010). Toyota: The accelerator crisis [Case No. A09-10-0011]. Glendale, AZ: Thunderbird School of Global Management

Porter, M. E. (1996). What is strategy? Harvard Business Review, 74(6), 61–78

Russell, R. S., & Taylor, B. W. (2014). Operations and supply chain management (8th ed.). Hoboken, NJ: Wiley.