A response on the “ My Years with General Motors” and “ The Toyota Way”
A Response On the “ My Years with General Motors” And “ The Toyota Way”
General Motors (GM) is a company with a history of more than one hundred years. The company has witnessed two world wars and the most prosperous period of auto industry in the United States. It had once become the world’s largest auto corporation through engaging in numerous mergers, acquisitions and many other ways. Its development is the greatest history of the American automobile industry. However, in the 2003, Toyota with 8. 13 billion dollar profit seized the GM’s first throne (Liker, 2004, p. 4). Furthermore, GM faced a crisis of bankruptcy in the year 1999. However, Toyota’s good time did not take very long; it performance reduced drastically soon after climbing to the peak. This incident affected the Toyota’s business considerably as it suffered a crisis of confidence in the world. In contrast, this incident gave GM a valuable opportunity enabling it make a nice turnaround. GM and Toyota are completely different in terms of corporate culture, management style, production and marketing strategies. There exists no absolute standard for measuring which of the two companies is better than other. In reference to the facts presented above, the paper provides a decisive analysis of the books My Years with General Motors and the Toyota way to provide a critical insight of the basic arguments raised in the books and reflect on their implication and rationality.
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In the book My Years with General Motors, Sloan points out that The General Motors type of organization includes coordination of policies, and decentralized of administration (Sloan 1990). This idea is excellent as evident in the GM’s successful performance. China provides a good example of the applicability of this strategy, as it has utilized this model in governing Hong Kong. China still maintains its original idea of capitalist system and free lifestyle. In consequence, the country has recorded attractive economic growth rate that it currently ranks as one of the fasted growing economies in the world. Its economic status and freedom has presented a positive trend over decades.
Furthermore, Hong Kong presently presents a stable and vibrant economy following the effect of China to the country. It is worthwhile noting that Asian financial crisis posed serious challenges to the Hong Kong economy. Fortunately, China supported them fully in overcoming the situation in terms of capital. Essentially, China purchased the devalued HK dollar thus, rescuing Hong Kong from the storm. GM is the corporation, which has established through mergers and acquisitions. In this context, it has multiple brands under their company. The idea of coordinated policy and decentralized administration is highly applicable in the businesses of the GM’s nature. This is because the strategy fosters autonomy of the company’s sub-branches thus enhancing decision-making. This is a strategic approach that has enabled the company adopt quickly and respond accordingly to the changing market demands. In consideration that GM has multiple brands, the company would face serious managerial challenges especially in terms of decision-making if each of its entity reported to the company’s headquarter. This is because a strategy that is effective in one brand or location may fail to be effective when applied to another brand. This means adopting a decentralized model offers the company a chance of providing tailored services as each brand assumes the strategy that best suits it business environment and clientele.
In the book The Toyota Way, Liker argues that short lead times and flexible production lines results to higher quality, better customer responsiveness, better productivity, and better utilization of equipment and space (Liker, 2004, p. 8). This is a rational observation considering the fact that the modern market is highly flexible and dynamic. Initially, quick lead times and flexible production lines ensure that the company maintains fashionable goods and services in the market. In this respect, the model ensures that the company sails along with the prevailing trends. The strategy also enhances the utilization of the equipments and space since it offers the company an opportunity of clearing outdated equipments to adopt the most modern technologies.
Points of Disagreement
The book My Years with General Motors identifies decentralization as the most strategic way of running companies that have numerous branches; however, this is a misinformed position because the strategy may fail to be work effectively in some cases. This idea should not be adopted universally as the book proposes. It is apparent that centralization of some of the company’s operations would result to increased quality and productivity in some instances.
Similarly, the author of the book The Toyota Way makes a wrong assumption by minimizing the role of technology in defining success of a company. Liker proposes the basics for enhancing management of a company (Liker, 2004). It is however worthwhile noting that although the principles defined in the book are highly relevant, the author fail to account for modern changing market in which technology presents as a strategic driving factor. In essence, the book fails to account for an effective approach of adjusting to the changing conditions.
Compare and Contrast
A comparison of the GM and Toyota can be understood in the companies’ philosophy and management models. In reference to the My Years with General Motor, it is apparent that GM emphasizes the idea of increasing market share and revenue, instead of establishing positive net cash flow. Focusing in this model is detrimental since the practice is characterized with low degrees of flexibilities. For example, the financial crisis that led to the downfall of the GM motors is argued to have been prompted by focus on this philosophy. In contrast, The Toyota Way indicates that Toyota assumes a market focus philosophy (Liker, 2004). This philosophy is highly effective since it fosters flexibility and customer’s satisfaction.
Furthermore, My Years with General Motor indicates that, the GM’s model focuses on strategic leadership and management. In contrast, The Toyota Way business model emphasizes the ideas of strategic production and continuous modification of products to ensure that they remain relevant in the market (Liker, 2004). The idea of strategic leadership and management is of great relevance since it is through leadership and management that business is able to identify innovative strategies that it can employ to outweigh its competitors. Similarly, strategic production ensures that the company is trading in the right products, which can compete successfully in the market.
New Questions Sparked
Reading these books prompts various questions. Initially, these books make one question whether some of theoretical management philosophies are applicable in the practical ground. One also questions if specific management and operational strategies may be effective only under specific or defined environments.
The books, The Toyota way and My Years with General Motors are classical pieces for management. The books highlight important concepts that managers can utilize in improving their management skills. Importantly, these books present their ideas in a strategic manner that provokes the reader into thinking. Although these books assume a different approach in presenting their arguments, both authors have explored successfully the ideas of manufacturing and knowledge management practices. These books are therefore recommended for individuals who need to develop their managerial skills.
Liker, Jeffrey (2004). The Toyota way. New York: McGraw-Hill ISBN 0-07-139231-9.
Sloan, A. P. (1990). My years with general motors. New York: Doubleday Dell ISBN 0- 385-04235-3.