Free «New Course in Behavioral Finance» Essay Sample


Toyota has for the last two decades been in the frontline in the production of quality automobiles throughout the world with its famous legacy of doing things the ‘Toyota way’. The company has always been attracting attention due to its ability to match the expectations of the market with lots of promises to the buyer that they will have quality and trouble free car courtesy of its organizational culture. However in February 2010, the company was forced to recall over nine million cars pending congressional investigation in America alone. This has thrown the company’s quality assurance, consultants; and book publishing into confusion as it tries to unearth the cause of the problems (Fischer).

The company while pursuing growth, failed to pay attention things that it already knew as a global firm that it was not supposed to build and new product in a new industrial unit with a new employees. The problems range from susceptibility of the car to uncontrolled acceleration and balky brakes that may have possibly been caused by poor corporate and organization culture. In the USA the problems can be traced and be found to emanate from the following organizational failures: bureaucracy, overconfidence, weak management; and the fallout. Bureaucracy is directly linked to the departure of James Press in 2007 as the company’s executive and his position replaced by various Japanese executives who had little influence on the American market and they could not respond swiftly to crises (Fischer). The company due to its overconfidence has a culture of not sharing information with its employees unless they deem it ‘necessary’. Furthermore, the company experienced weak management when Akio Toyoda took over last summer and many believed he was not experienced enough for the title at that time. It is for this reason and coupled with communication fall out that Toyota could not be able to identify fast enough the problems it was facing.


For Toyota to maintain its market dominance as the global leader of supplying modern automobiles, it is necessary for it to review its organizational culture and leadership. It is very surprising for a company that has been thriving in this field for so long could easily succumb to such a level that it had call back the numerous number of cars with lots of faults.  There lie many more issues that they have to sort within themselves considering its years of engagement in the business of automobile manufacture. This company has always had a reputation to this company of swift action in mistake correction especially for the vehicle that it constructed in 1957. Problems probably started when the company engaged in haphazard expansion and establishment branches in the US market without proper coordination between them (Schein, 247).

The only way that Toyota can come back to the high level of attention to details and production of high of high quality vehicles that are fault free is through the complete overhaul of the management. There is need to have an organizational culture that delivers promises to its customers each and every time- all these areas were not an headache to Toyota. Another thing that the company will have to consider reduction of its advertisement costs which has been to be at a very high level compared to any other automotive  company like the Ford or General Motors.

Benefits of this Proposal

Understanding the problems an organization like Toyota is necessary at each time since it enables it to plan ahead of time on how to the challenges that it is bound to encounter. In any business, it is important fro one to know that the road to success is not a smooth one even if the company is the market leader. This is only possible if the organizational culture and leadership of the organization in question like Toyota is change so that it can be able to address the problems in a more professional manner. The existence of a good leadership will place Toyota in good position by having qualified and experienced managers who can be able to predict the prevailing market challenges and be able to provide the necessary solutions and remedies before the effects of the problem reach uncontrollable levels. It was pointed out earlier that on of the causes of the woes facing Toyota is the lack of experience by its Chief Executive, Akio Toyoda (Schein, 253).

As pointed out earlier, the other problem to blame for the manufacture of substandard vehicles by Toyota Motor Corporation is the establishment of various uncoordinated branches in the US market. This resulted in poor communication between the management, the employees and its suppliers. Parts were probably supplied without meeting the stipulated specifications thus and a further poor coordination of a totally new kind of employees worsened the matter. What new organizational culture and leadership promises is a congruent flow of information between the company staff, employees and suppliers. It will result in the supply of materials and proper fitting of parts and enable the organization to greatly avoid the problems of poor coordination.

Another benefit of a change of the organizational culture is the reduction of the advertisement cost that Toyota uses. It has always been pointed out that Toyota uses a lot of resources than any other motor vehicle company to promote the various models of its vehicles. This problem can however be greatly minimized if the organization manufactures quality models since the customers will automatically be attracted to them with little use of resources. This can only be possible in the presence of a new management who can handle things in a different way and who can ascertain the feasibility of any promotional tool that the company uses. The new leadership will be in a position to identify the best promotional methods which are cheap and at the same time helpful to the organization in the creating the awareness of the product.

Attaining a good organizational culture and leadership by organization is not always something accidental but rather, something that is planned for. This is achieved through high strategic involvement by the organization with clear action plans that will enable Toyota Corporation to measure the intangible assets in its employees that truly abide by company’s cultural values that will benefit the whole society of the company including the suppliers and customers. One of the best ways that Toyota can change organizational is by changing the way the employees are treated and not about the issue of hiring a consultant. While doing this, Toyota will have to realize that the benefits and effects of a good culture are always long term and stronger for a company that is internally grown (Schein 261).

In this proposal, Toyota will also be made to realize the importance the top managers their knowledge and learning with the ultimate aim of fostering good inquisitive behavior. This culture will facilitate tolerance between the conflicting ideas of the employees and facilitate the establishment of explicit form to rewarding them. This will greatly boost their morale and self esteem in the best provision of their best knowledge and skills for the betterment of the organization and the overall provision of fault-free products.

Description of the Proposal

If this proposal is approved, Toyota Corporation with the help of its global human resource managers or recruitments agencies will carry out a thorough recruitment drive which will help it to identify the best candidates to take the positions of the top management. Consideration will obviously be given to the candidates who have experience in corporate management and risk management that Toyota currently faces. In addition to this, the management will seek to find out the leadership skills of their competitors and a further training of their other employees to ensure that they are always updated about the current trends in the motor vehicle industry. In addition to this, this proposal will further ensure that Toyota Corporation reduces its advertisement cost so as to ensure that their revenue earnings are always kept at a level high that promises good profits. The company will also be able to produce quality cars and recall the other that are faulty and rectify them fast enough to sustain the consumer confidence.

Practicality of Proposal

It is a fact that Toyota is in the middle of criticism for manufacturing faulty vehicles that has resulted in a number of deaths of its customers due to probable error in design and other leadership woes. Further crises exists due to the fact that the corporation has to call back more than nine million  cars to rectify the problem of automatic acceleration, pedal problems among others. The company has also been spending a lot of money advertising vehicles that later end up being faulty. It is therefore the high time that the problems are ironed out immediately to enable it continue doing business in its exclusive ‘Toyota Way’ save to say that it is the global automobile dealer and it has enough resources to carry out the changes in its organizational culture and leadership (Fischer).


Successful global leadership in any business is a difficult journey that is not possible in the absence of qualified and experienced management. The market changes take place drastically in such a way that any producer can lose market easily due to petty mistakes that may jeopardize the live and health of consumers. It is therefore essential for any organization including Toyota to ensure that they provide fault-free product to its consumers. Thank you for you time and consideration concerning this crisis and I look forward to receiving a positive response from you.


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