8/2/2019 MBA Toyota

1/18

Introduction

1. Toyota Motor Corporation founded by Kiichiro

Toyoda in 1937

2. Employed 317,734 people worldwide

3. World's largest automobile manufacturer by sales

and production.

8/2/2019 MBA Toyota

2/18

Toyota System

1. Face Challenge

2. Kaizen (improvement)

3. Respect, and Teamwork

8/2/2019 MBA Toyota

3/18

HR. in Toyota Company

MAIN Philosophy BEHIND HR Company organization structure

Multi-function concept

Mobility of Members

Promotion policy

Social welfare:

1. health care

2. Long term disability plan

8/2/2019 MBA Toyota

4/18

Terms and conditions

Fully Committed and Thorough Human Resources

Development

Diversity and Equal Opportunities

Identification the Problem

Several mechanical failures

Damaged the automakers brand reputation

Sales to fall

8/2/2019 MBA Toyota

5/18

Cause of the problem

Production sector:

This is a result of poorly designed practices;

HR sector

weak execution on the part of the human resourcedepartment (writes Dr John Sullivan).

8/2/2019 MBA Toyota

6/18

Video

http://www.youtube.com/watch?v=81hrSnx0wbo

http://www.youtube.com/watch?v=81hrSnx0wbohttp://www.youtube.com/watch?v=81hrSnx0wbohttp://www.youtube.com/watch?v=81hrSnx0wbohttp://www.youtube.com/watch?v=81hrSnx0wbohttp://www.youtube.com/watch?v=81hrSnx0wbohttp://www.youtube.com/watch?v=81hrSnx0wbohttp://www.youtube.com/watch?v=81hrSnx0wbohttp://www.youtube.com/watch?v=81hrSnx0wbohttp://www.youtube.com/watch?v=81hrSnx0wbohttp://www.youtube.com/watch?v=81hrSnx0wbohttp://www.youtube.com/watch?v=81hrSnx0wbohttp://www.youtube.com/watch?v=81hrSnx0wbo

8/2/2019 MBA Toyota

7/18

HR processes for downfall

The 8 HR processes that contributed to Toyotas downfall:

1. Rewards and recognition;

2. Training;

3. Hiring;

4. The performance management process;

5. The corporate culture;

6. Leadership development and succession;

7. Retention;

8. Risk assessment.

8/2/2019 MBA Toyota

8/18

1. Rewards and recognition

to encourage and incent the right be saviors andto discourage the negative ones.

Its important for the reward process to incent thegathering of information about problems.

Its equally important to reward employees whoare successful in getting executives to takeimmediate action on negative information

8/2/2019 MBA Toyota

9/18

2. Training

Make sure that employees have the right skills and

capabilities to identify and handle all situations they

may encounter.

Toyota is famous for its four-step cycle:

(plan/do/check/act)

The training focus more on the last two.

Key question If Toyotas training was more effective,would the managers involved have been more successful

in convincing executives to act on the negative

information received?

8/2/2019 MBA Toyota

10/18

3. Hiring

The purpose is to bring on board top-performing

individuals with the high level of skills and capabilities.

Poorly designed recruiting and assessment

Key questions Did Toyota have a poorly designed

hiring process that allowed it to hire individuals who were

not experienced in the required constructive confrontation

technique? Were their hires poor learners that did not

change as a result of company training?

8/2/2019 MBA Toyota

11/18

4. The performance managementprocess

Periodically monitor or appraise performance, in order

to identify problem behaviors before they get out of

hand.

If the measurement system included performance

factors to measure responsiveness to negative in

formation, Toyota wouldnt be in turmoil today.

Key questionsDid Toyotas famous high level of trust

of its employees go too far without reasonable metrics,

checks, and balances?

8/2/2019 MBA Toyota

12/18

5. The corporate culture

Informally drive employee behavior so that it closely

adheres to the companys core values.

It appears that the corporate culture created leaders soconcerned with saving face and so adverse to

negative publicity.

As a result, it is the culture within the corporate officesthat need to be more closely monitored rather than

assuming that the culture was aligned...

8/2/2019 MBA Toyota

13/18

6. Leadership development andsuccession

Ensure that a sufficient number of leaders with the right

skills and decision-making.

It is likely that the leadership development and the pro

motion process both failed.

Key question Was the leadership process at Toyota so

outdated that it produced the wrong kind of lead errs with

outdated competencies, who could not successfully

operate in the rapidly changing automotive industry?

8/2/2019 MBA Toyota

14/18

7. Retention

Identify and keep top performers and individuals withmission-critical skills.

Key question Did the retention program ignore people

that brought up problems and as a result, did these

whistleblowers often leave out of frustration?

8/2/2019 MBA Toyota

15/18

8. Risk assessment

HR should have worked with corporate risk managreement at Toyota to ensure that employees werecapable of calculating the long- term actual costs ofignoring product failure information.

Key question Should HR work with risk-assessment experts and build the capability ofidentifying and quantifying the revenue impacts of big

HR errors, including a high hiring failure rate, a highturnover rate among top performers, and the cost ofkeeping a bad manager or employee?

8/2/2019 MBA Toyota

16/18

Conclusion

Toyotas problems are not the result of a singleindividual making an isolated mistake,

a companywide series of mistakes that are allrelated to each other.

So many corporate functions were involved,including: customer service, government relations,

vendor management and PR, that one cannot help but attribute the

crash of Toyota to systemic managementfailure.

8/2/2019 MBA Toyota

17/18

key lesson

Toyotas mistakes is that HR needs to

periodically test or audit each of the processesthat could allow this type of billion-dollar error

to occur.

8/2/2019 MBA Toyota

18/18

MBA