OB final project

Organizational Behavior Project for Semester 2 2010 Content derive from the news article,The Star, Feb 1, 2010. Problems at Toyota, JAL etc taint Japan Inc.'s image TOKYO: Toyota is the latest Japanese corporate icon making headlines for all the wrong reasons. News of the automaker's massive vehicle recalls over faulty gas pedals in the U.S. came just days after Japan Airlines, a once proud flag carrier, filed for bankruptcy, saddled with billions in debt. Sony has lost its lead in consumer gadgets to the likes of Apple Inc. and has suffered its own quality mishaps .Honda, Japan's No. 2 automaker, is recalling 646,000 cars worldwide because of a faulty window switch. Taken together, Japan Inc.'s stellar reputation for quality has taken a hit - just as China is about to overtake it as the world's No. 2 economy and rising South Korean companies compete ever more aggressively. What went wrong with the economic giant that arose from the ashes of World War II? The problems that confront Toyota, Sony and JAL differ, but experts say their struggles have some common themes: the perils of global expansion, a tendency to embrace the status quo, and smugness bred from success or a too-big-to-fail mentality."Arrogance and some complacency came into play, driven by the idea that their ranking as No. 1 producer of quality goods wasn't at risk," said Kirby Daley, a veteran Tokyo trader who is now chief strategist at Newedge Group, a financial services firm in Hong Kong. The global economic crisis helped to expose weaknesses, he said. "There was nowhere to hide."Added to the mix for Toyota and Sony is intense competition from upstarts in South Korea, China and elsewhere in Asia."They can offer products as good as Japanese at much lower cost, even though quality of Japanese products is on the decline," said Shinichi Ichikawa, chief strategist at investment bank Credit Suisse. Some new Asian rivals, particularly in electronics, learned their techniques from Japanese operations set up around the region. Cutting costs to stay competitive while meeting growing demand, Toyota, Sony and others compromised on quality control as they tried to reach ever-larger sales targets, analysts say. Toyota adopted the practice of using the same part across a range of models - saving vast sums of money but exposing itself to the risk that even a small defect could cause global mayhem for the company. It also faced difficulties ensuring quality as its global sales expanded rapidly, reaching 8.9 million vehicles in 2008, when it displaced General Motors as the world's biggest automaker. Experts say its growth outpaced management's ability to anticipate looming problems. The result: recalls of more than 7 million vehicles in the U.S., Europe and China for problems with their accelerators and floor mats, and the suspension last week of U.S. sales and production of eight models including the Camry, America's top-selling car. It's a "terrible blow" for Toyota because its identity is so closely linked to quality and the company seemed slow to recognize the problems, said Kenneth Grossberg, a marketing professor at Waseda University who has lived in Japan for 16 years."This is the company of zero defects," he said."How could such a major fault get past them? It violates their operating principle."As far back as March 2007, Toyota started getting reports of gas pedals being slow to rise after being stepped on. Engineers fixed the problem in the Tundra pickup early in 2008, but troubles persisted in other models, eventually leading Toyota to announce massive recalls for the accelerator and floor mats that could trap the gas pedal. Grossberg said a common problem at Japanese companies is "group think" that makes it hard for an individual to raise a troublesome issue."It either falls flat and people ignore it, or it creates a problem for the individual who brings it up," he said. Sony started facing problems after it misjudged several critical market trend, it was slow to predict the switch to LCD televisions and fell behind South Korea's Samsung Electronics Co., which zoomed ahead to become a market leader. Content with the success of the Walkman, the portable music player that became a global hit in the 1980s.Sony was slow to jump into digital players. It has been hammered by Apple's iPod, as well as by cheaper gadgets and consumer electronics from other Asian competitors. With Sony's empire sprawling into finance, movies and other businesses, some analysts said the corporation was losing its focus. In 2006, it recalled nearly 10 million laptop batteries after some caught on fire. The company is still losing money even as CEO Howard Stringer wins praise for taking it back to basics. At Japan Airlines, problems had festered for decades but were repeatedly papered over because of Japan's reluctance to let major companies go under. It became the victim of its own ambitions when risky investments in foreign resorts and hotels went bad after Japan's property and stock bubble burst in the early 1990s. Bloated pension and payroll costs, as well as a network of unprofitable but politically necessary domestic routes, led to government bailouts.JAL had a good reputation for comfortable travel, but its lavish running costs had "generally been something of an industry joke," said Peter Harbison of the Sydney-based Centre for Asia Pacific Aviation. Quality, too, eventually proved problematic: A spate of safety lapses tarnished JAL's image, and its rival, All Nippon Airways Co., benefited. And while filing for bankruptcy with $25.6 billion in debt was an embarrassment, analysts expect JAL to slim down and emerge healthier. Toyota, too, will bounce back, they say. " said Martin Schulz, an economist at Fujitsu Research Institute."But they will get this quality problem under control."In Japan, reaction to Toyota news has been more muted because the recall doesn't affect models in the domestic market. Japanese are proud of Toyota's leading role on the roads, including its move into hybrid and other green vehicles. So far, the automaker's sterling reputation is holding up at home, partly because Japanese often assume that Japan-made products are better than those made abroad. Toyota's Japanese models use a different parts supplier than CTS Corp., the American parts maker rushing to fix the faulty gas pedals. Still, the blaze of bad publicity has struck at the idea of Japan as a technology powerhouse where companies can be world leaders despite the nation's deeper problems of an aging population, mounting debt and anemic economic growth. Toyota must take "urgent measures" to regain consumers' confidence, the Yomiuri newspaper said in an editorial Sunday."For other Japanese automakers and manufacturers, it's not somebody else's problem. They should keep in mind that safety and quality make the foundation of public trust in the Japanese way of manufacturing." - AP In Japan, Toyota, Sony, and JAL (Japan Airlines) have facing different kind of problem that occured in their company. The causes that has made those problems arise between these companies are similar, that is the perils of global expansion, a tendency to embrace the status quo, and smugness bred from success or a too-big-to-fail mentality. They think that their ranking as No.1 producer of quality goods wasn’t at risk. Toyota started to find out the report about gas pedals being slow to rise after being stepped on at March 2007. They fixed the problem pickup early in 2008 but troubles persisted in the accelerator and floor mats that could trap the gas pedal. Grossberg, a marketing professor said “group think” also a problem for Japan companies that people ignore it, or it creates a problem for the individual who bring it up make an individual hard to raise a troublesome issue. Sony started had the problems after misjudged several critical market trends. It was slow to jump into digital players when the portable music player (Walkman) became a global hit in the 1980s. Sony lost its lead in consumer gadgets to the likes of Apple Inc. and has suffered its own quality mishaps. In 2006, it recalled nearly 10 million laptop batteries after some caught on fire. On action to solve the problem face by Toyota, it has recalls of more than 7 million vehicles in the U.S., Europe and China for problems with their accelerators and floor mats, and the suspension last week of U.S. sales and production of eight models including the Camry, America's top-selling car. The impact of the action is a "terrible blow" for Toyota because its identity is so closely linked to quality and the company seemed slow to recognize the problems. For Sony, although the CEO success taking it back to basics but the company still losing money. JAL became problem when risky investments in foreign resorts and hotels went bad in the early 1990s. Problem had festered but were repeatedly papered over because Japan’s reluctance to let major companies go down. On action, JAL try to slim down its debt and emerge healthier to avoid filing for bankruptcy. According to the article, there were some contents that can be relate to the relevant topics in the OB course. In the article, Grossberg has said that the common problem at Japanese companies is the "group think" that makes it hard for an individual to raise a troublesome issue. This relate to the Groupthink in Group Dynamics and Teamwork topic. “It either falls flat and people ignore it, or it creates a problem for the individual who brings it up," he said. So this relate to the Brainstorming in Group Decision Making Technique as a way to avoid groupthink from happens. The other related topic is Organizational or Corporate Culture that is how the Japan companies see themselves as arrogance, and have a “too-big to fail mentality” which at the end lead them into disruption and recession. Kirby Daley, veteran Tokyo trader who is now chief strategist at Newedge Group, a financial services firm in Hong Kong, said that the global economic crisis is another factor that expose to weakness of Toyota, Sony and Japan Airlines (JAL). This relate to Responding to Globalization in the OB topics. It means a company must be able to cope with temporariness, like globalization. The same goes to what happen in Sony, as they misjudged of what happens in the global market trends. Victory will go to the organization that maintain their flexibility, and continually improve their quality. Like what happen in Japan airlines, they neglect the quality aspect, as a spate of safety lapses has tarnished their image. The same goes to Toyota, who has neglect its quality and safety aspect, by recalls of more than 7 million vehicles in the U.S., Europe and China for problems with their accelerators and floor mats. This can relate to Improving Quality and Productivity in Challenges and Opportunities for OB. Based on the action taken by Toyota in the article, they has recalls more than 7 million vehicles in the U.S, Europe and China for problems with their accelerators and floor mates, and the suspension of U.S sales and production of eight models, these can lead to related topics in OB that is Decision-Making Process. Like what Toyota has did, it has make decision to do recall as action for the problem that has happen. The other related OB topics to the articles is Change in Organizations. One of it is the Japan Airlines, who decline to let major companies goes under them, thus means it was reluctant to change. The same thing goes to Sony, who failed to have innovation in the organizations as it has lost its lead in consumer gadgets to the likes of Apple Inc. and has suffered its own quality mishaps. Based on the above article problems faced by top leading companies in Japan such as Toyota, Sony and Japan Airlines, there were some comment and critiques that can be made. Toyota has recalls of more than 7 million vehicles in the U.S., Europe and China for mechanical problem is a very shameful act as it reflect back the company gigantic status as a quality car manufacturer all over the world. This action not only will affect the company itself, also to relevant ties with other countries, and consumer all over the world. It has been stated in the article, that Toyota seem slow to recognize the problem, and only take act at the end of the day, after receive so many complaints and reports from the U.S. This show that the company don’t listen to their customer and this fault should be blame and criticize worldwide. Besides, these companies should overlook on their production’s quality and get to know either it really satisfied the customer needs or not. It does not make sense when the product cost is high but the quality is bad compare to lower cost product. Customers don’t mind to spend their money on good products which have good quality and use it for long term. For example, in the statement of just as China is about to overtake it as the world’s No.2 economy and rising South Korean companies compete ever more aggressively. This shows that because of the Japan’s product quality decrease many customers switches their choice to China made products and their economy increasing rapidly. To improve this situation, Japan made products should increase their quality in production to meet growing demand and also at reasonable cost. Improving in production qualities requires on employees skill. Without knowledgeable and skilled employees or can say engineers they can’t identify their mistakes and of course can’t make any improvement in products. For example, Toyota recalls back their vehicles in U.S to repair accelerators and floor mats. This may requires expert mechanical engineers to find the major mistakes and improve it as soon as possible. Not only that but then an employee in the organisation should be fit by characters. That means they should be able to move with the latest changes without giving any internal or external problems in organisation. When an employee can’t commit fully in the organisation, this can cause to bad production or not good quality products. Finally, Toyota, Sony and Japan Airlines should need improvement in groupthink method as this method won’t be effective to conclude better decision or solution at the end of the part. If the group consist of lower group members than it will be effective but then when it consists of larger group members it will be messy with many voices arise at the same time. Upper level management should look forward to better group decision making techniques such as brainstorming, nominal group techniques and etc. This can comes up with better ideas and solution for all those problems. There were implications on the action taken by Toyota, as it can give impact on the diplomatic ties between Japan and the United States, as United States has received reports linking to safety defects in Toyota cars and trucks over the past decade. The customers in the United States might have lost their trust and confidence in using the company’s products anymore. For the citizen of Japan, who were once proud of Toyota’s leading role on the roads, might also has lose trust and respects to the company’s leaders. The implication of this action also include the untrustworthy and corruption might has occurred among the Toyota and U.S safety regulators, who was actually responsible to the safety and quality of the cars and trucks before they were being stamped and confined to move on the roads. For Sony, the action taken by CEO Howard Stringer who recently announce to taking Sony back to basics, but still made the company losing money, will only being mocked and critique by their gadget consumers, and this can be seen widely in the tech blogs. Information and critiques that spread out by bloggers might has as well influence the mind setting of others internet users, which can spread a “mind-setting” that Sony products are not innovative enough compared to others.For Japan Airlines, the implication on their action that filing for bankruptcy basically shows that nothing is too big to fail. Besides, JAL's workforce face the prospect of losing their jobs, which can also impact the company reputation on national and worldwide. The action also give implication for the investors after JAL has a turn around plan by the government but the investors believe they are still likely to lose most of their money. It also be an indicator that the nation has not take total care of a company, and let badly-run companies fail. REFERENCES 1. Organization Behavior, James G Hunt, Texas University, 9th Edition 2005 2. Tabiat organisasi, Ungku Norulakmar Ungku Ahmad, Ebi Shahrin Suleiman, Prentice Hall, 2003 3. Essentials of Organizational Behavior, Stephen P. Robbins, Timothy A. Judge, Pearson, 2010 4. http://news.bbc.co.uk/2/hi/8466997.stm 5. http://news.cnet.com/8301-31021_3-10447511-260.html 6.http://biz.thestar.com.my/news/story.asp?file=/2010/2/25/business/20100225115413&sec=business