Takata Organizational Design

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With regards to the declining nature of Takata they seem to find themselves operating between the “Crisis” stage and the “Faulty” stage. This paper will attempt to assert that it is possible to be stuck between both. Takata is, as mentioned previously, stuck with an approximate 2.1 billion dollar bill (not including future legal ramifications and loss of good will) from the recalls. To say they’re not in crisis would be a vast understatement however the issue present is how do we determine, once a company takes action, they pass from “Faulty” to “Crisis”? Takata has admitted their product is faulty and have taken at this stage the necessary. The issue is that their product has been serviced into 33.8 million automobiles being recalled and as such they will suffer crisis and panic even as they are working to remedy the issue. It is a certain fact, this paper asserts, that Takata must rewrite history if it is to recover by assuring its quality standards improve dramatically to regain both manufacturer trust and customer trust. Many are questioning if Takata will fall to the “Dissolution” stage however, as of now, their sheer size, cash flows and provisions have kept them floating it is “looking thing” and likely the only thing that will keep them afloat is the fact bankruptcy won’t pay back the auto industry (Tahara, 2015). However Takata has shifted, rather defensively, into as stated earlier a 33.8 million vehicle recall as a response.

With regards to the past one can assert they have stepped through multiple thresholds leading them to their current bloated and floating state. They had originally been through what is considered the “Blinded” stage. Mostly caused by what can be at best considered internal negligence on the part of producing a dangerous and faulty product and at worse willful incompetence. When the company first shifted into the airbag industry Juichiro Takada, son of the company’s founder, rightly said “If anything happens to the airbags, Takata will go bankrupt” later stating they should not venture across such a “dangerous bridge” (Moyer, 2015) the market however was a cash cow yet they’ve struggled with quality since the adoption of the new product line and the repercussions have been witnessed and Juichiro Takada’s warning seems to be bearing some clairvoyance as Takada’s struggles enlarged. It is the case, and this paper will argue, that through the eyes of profit they sacrificed quality and were subsequently blinded from the oncoming disaster.

Following reports of injuries and deaths the company fell into the “Inaction” stage of organizational design. It is likely internally there was little doubt they had malfunctions in their airbags with reports as early as 2001 of faulty airbags given to the N.H.T.S.A. yet externally they denied as late as 2015. (Tabuchi, Ivory, 2015) This inaction since rumors and warnings began showing seemingly occurred for over a decade and begs the real question that if they had of acted in 2004 when, as asserted by The New York Times, would have been blindsided and financially shell shocked so dramatically?

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3.2 Competitive Strategy

According to Takata they operate around three mission statements.

- Developing innovative products and providing superior quality and services to achieve total customer satisfaction

(Takata, 2015)

- Respecting various personalities and cultures to keep associates highly motivated to pursue common goals

- Being an active member of the community and contributing to a better society.

There was no indication of a future set of goals within their annual report. There has been a large focus on stabilizing the companies imagine.

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(Takata, 2015)

Whether they can achieve this is up in the air however but the majority of their losses and setbacks have been realized. As with regards to this information and that located on their annual shareholder 2015 review this paper believes they operate under a differentiation strategy since they offer a specialized set of products to a competitive market.

3.3 External Environment

For Takata since they operate with a range of items considered necessities in automobiles, such as airbags and seatbelts, they must continually strive for excellence since their items can be the difference between life and death. For this reason the market is highly lucrative as it parallels the automotive industry and as such they must continually scan the environment for external shifts for instance in policies and regulations (specifically safety related) but to a lesser extent in general. For the fact they operate in the automotive industry this paper believes Takata to have a high level of uncertainty.

3.3.1 Political Forces

It’s no secret that modern societies have placed a heavy emphasis over the past 50 years on automobile safety. This directly relates to Takata’s mainstay products. As such Takata must at all times, as a company operating globally on four continents, be mindful of policy changes and regulations. For instance after the current scandal regarding Takata Japan has put in regulations banning the ammonium nitrate propellant found in Takata’s airbags. (Automotive News, 2015). These changes have recently come into effect and Takata must take strides to mitigate damages.

As mentioned earlier internationally due N.H.T.S.A. has fined Takata a record 70 Million USD. This further presents a notion that but for their actions when the faulty airbags were being looked into would such fines placed by a governmental body have occurred and if they had been more mindful of the potential regulatory blow-back would they have acted so negligently? These are the questions Takata must tackle internally moving forward as their viewed under ever more scrutiny for the years to come with regards to the deep and heavily regulated automotive safety market. (Weidenbaum, 1999)

This all being said however political forces can be seen as a positive with regards to safety equipment manufacturers such as Takata since many government regulations mandate the products they (or competitors) make be inside of every car made. Thus not only do regulations and penalties act as a liability but they also act as an asset for the company and as such should be taken with equal measure when