Controlling is an important management function which is necessary in all aspects and levels of the organisation. The controls are applied to the organisation functions such as planning, design, employee performance, organising, and putting up structures that ensures significant growth. Lack of control in an organisation leads to financial losses and costly delays. Globalisation has brought about challenges of management issues and price competitive advantages. It helps to maintain flexibility with changes in a demanding global market which is paramount for a company to be successful (Hope & Bunce 2011).
Toyota is well-established Japanese car manufacturer, who are known for good quality vehicles. Recently they have had quality control problems and until recently they had to recall millions of cars manufactured in the years 2009-2010 ranging from Camrys, Avalons, Corollas and Priuses. The recall of vehicles came when Toyota had just been crowned as the best and the biggest world’s carmaker in 2010 and this dented their image and reputation among its customers. The problems that caused the vehicles to be recalled were (Pangarkar, 2012);
– Sticking accelerator which occurred when drivers pressed the accelerator under certain humidity and temperatures which is believed might have caused death cases in America. This caused Toyota over $2 million in lawsuits and losses because this caused the American not to have trust in the motor vehicle safety and quality.
– User error where the customers were not given adequate instructions, for example in case of an emergency how to stop the engine in a few seconds, and how to handle vehicle dashboards even though users never reviewed it, it was NHTSA who did investigations and raised the alarm.
– Floor mats were un-approved because they were too thick to lie on the floor thus causing the pedal not to return to its original position. The accelerator was also caught under the thick mats causing multiple car crashes and accidents
The company built plants in other parts of the world to avoid fluctuating exchange rates and this weighed heavily on the company because of costs required to run the company such as employee salaries, electricity. This caused a loss of control in the company because the companies did not keep their production rate above 70 per cent which is recommended for the company to be in profit and the company found it difficult to keep up with the current changes in the market.
According to Hope, J., & Bunce, P. (2011) Toyota has been made vulnerable because of the following factors;
– Lack of an organisational structure in the company has caused the organisation to be less responsive to decision making and taking action plan where it is recommended.
– The Japanese Yen has been weak over time while global demand is increasing significantly.
– Senior management who are slow in decision making in deciding which model of vehicles are to be cut and the programs to be implemented to keep the company in profit.
– Continued reliance on home production has further aggregated the company’s woes.
– The company had taken many years to build its motor plants so that they could concentrate on building new models such as the top Toyota Brass but in actual sense there were no buyers to buy vehicles produced by a new plant because they had not been in the market in a considerable period of time.
– Japanese car sales have been falling over the years due to the global market slowing down.
In the recent years the Toyota Company has been undertaking cost cutting to avoid huge losses through saving more and keeping a restraint on overspending the company’s main income stream. This has forced it to create a committee on Emergency Profit Improvement to help in saving $1. 4 billion dollars for the company. The company has laid off workers on temporary terms, and permanent staff in Britain and the United States. Member of Staffs have been encouraged to save on running costs such electricity by opting for stairs instead of taking elevators (Pangarkar, 2012). According to the Japanese media report the company is planning to cut on production costs by 40 per cent which is equivalent to about 450, 000 vehicles.
In conclusion successful goal achievement of a large organisation like Toyota requires excellent people management and to put an organisational structure so that controlling the organisation resources is more manageable. The management must assess their capabilities in production, procurement, design, manufacturing, human resources, engineering, cost and quality so that they can concentrate on their weakness and enhance their strong points in order to identify problems affecting the company and satisfy customer needs which is paramount for the organisation success. It needs to keep its production plant levels more than 80 per cent in order to be able to be in constant competition with rival companies (Pangarkar, 2012). Since the company has a solid balance sheet and considerable resources the company can withstand their economic crisis that they are currently experiencing and go into profit again. In comparison with their major competitors they are well placed in the global market.
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Hope, J., & Bunce, P. (2011). The leader’s dilemma how to build an empowered and adaptive
organization without losing control. San Francisco: Jossey-Bass.
Pangarkar, N. (2012). High performance companies successful strategies from the world’s top
achievers. Singapore: John Wiley & Sons (Asia).