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MGT 312 MID-TERM EXAMINATION (100 POINTS)

DUE DATE: THURSDAY, JULY 15

PLEASE NOTE THAT YOU MUST COMPLETE TASK 1 & TASK 2

Task 1 : Please read the attached Toyota Struggles With Organizational Structure case and answer the 5 discussion questions in your own words. (Tip : Read Chapter 7 on Organizational Structure and Change)

Task 2 : Please read the attached Empowering Employees article and write up

your key insights. ( 1-2 Pages Maximum).

i.e What do you now you know which you weren’t aware of before you read this Empoering Employees article.

Dr Babu Subbaraman 1

Task 1 : Case in Point: Toyota Struggles With Organizational Structure

Figure 7.3

https://2012books.lardbucket.org/books/management-principles-v1.1/section_11/1cc407da2856179e91d5da74e383bf9d.jpg

Source: Photograph courtesy of Toyota Motor Sales, USA, Inc.

Toyota Motor Corporation (TYO: 7203) has often been referred to as the gold standard of the automotive industry. In the first quarter of 2007, Toyota (NYSE: TM) overtook General Motors Corporation in sales for the first time as the top automotive manufacturer in the world. Toyota reached success in part because of its exceptional reputation for quality and customer care. Despite the global recession and the tough economic times that American auto companies such as General Motors and Chrysler faced in 2009, Toyota enjoyed profits of $16.7 billion and sales growth of 6% that year. However, late 2009 and early 2010 witnessed Toyota’s recall of 8 million vehicles due to unintended acceleration. How could this happen to a company known for quality and structured to solve problems as soon as they arise? To examine this further, one has to understand about the Toyota Production System (TPS).

TPS is built on the principles of “just-in-time” production. In other words, raw materials and supplies are delivered to the assembly line exactly at the time they are to be used. This system has little room for slack resources, emphasizes the importance of efficiency on the part of employees, and minimizes wasted resources. TPS gives power to the employees on the front lines. Assembly line workers are empowered to pull a cord and stop the manufacturing line when they see a problem.

However, during the 1990s, Toyota began to experience rapid growth and expansion. With this success, the organization became more defensive and protective of information. Expansion strained resources across the organization and slowed response time. Toyota’s CEO, Akio Toyoda, the grandson of its founder, has conceded, “Quite frankly, I fear the pace at which we have grown may have been too quick.”

Vehicle recalls are not new to Toyota; after defects were found in the company’s Lexus model in 1989, Toyota created teams to solve the issues quickly, and in some cases the company went to customers’ homes to collect the cars. The question on many people’s minds is, how could a company whose success was built on its reputation for quality have had such failures? What is all the more puzzling is that brake problems in vehicles became apparent in 2009, but only after being confronted by United States transportation secretary Ray LaHood did Toyota begin issuing recalls in the United States. And during the early months of the crisis, Toyota’s top leaders were all but missing from public sight.

The organizational structure of Toyota may give us some insight into the handling of this crisis and ideas for the most effective way for Toyota to move forward. A conflict such as this has the ability to paralyze productivity but if dealt with constructively and effectively, can present opportunities for learning and improvement. Companies such as Toyota that have a rigid corporate culture and a hierarchy of seniority are at risk of reacting to external threats slowly. It is not uncommon that individuals feel reluctant to pass bad news up the chain within a family company such as Toyota. Toyota’s board of directors is composed of 29 Japanese men, all of whom are Toyota insiders. As a result of its centralized power structure, authority is not generally delegated within the company; all U.S. executives are assigned a Japanese boss to mentor them, and no Toyota executive in the United States is authorized to issue a recall. Most information flow is one-way, back to Japan where decisions are made.

Will Toyota turn its recall into an opportunity for increased participation for its international manufacturers? Will decentralization and increased transparency occur? Only time will tell.

Case written by Berrin Erdogan, Carlene Reynolds, and Talya Bauer to accompany Carpenter, M., Bauer, T., & Erdogan, B. (2009). Principles of management (1st ed.). New York: Flat World Knowledge. Based on information from Accelerating into trouble. (2010, February 11). Economist. Retrieved March 8, 2010, from http://www.economist.com/opinion/displaystory.cfm?story_id=15498249 ; Dickson, D. (2010, February 10). Toyota’s bumps began with race for growth. Washington Times, p. 1; Maynard, M., Tabuchi, H., Bradsher, K., & Parris, M. (2010, February 7). Toyota has pattern of slow response on safety issues. New York Times, p. 1; Simon, B. (2010, February 24). LaHood voices concerns over Toyota culture. Financial Times. Retrieved March 10, 2010, from http://www.ft.com/cms/s/0/11708d7c-20d7-11df-b920-00144feab49a.html ; Werhane, P., & Moriarty, B. (2009). Moral imagination and management decision making. Business Roundtable Institute for Corporate Ethics. Retrieved April 30, 2010, from http://www.corporate-ethics.org/pdf/moral_imagination.pdf ; Atlman, A. (2010, February 24). Congress puts Toyota (and Toyoda) in the hot seat. Time. Retrieved March 11, 2010, from http://www.time.com/time/nation/article/0,8599,1967654,00.html .

Discussion Questions

1. What changes in the organizing facet of the P-O-L-C framework might you make at Toyota to prevent future mishaps like the massive recalls related to brake and accelerator failures?

2. Do you think Toyota’s organizational structure and norms are explicitly formalized in rules, or do the norms seem to be more inherent in the culture of the organization?

3. What are the pros and cons of Toyota’s structure?

4. What elements of business would you suggest remain the same and what elements might need revising?

5. What are the most important elements of Toyota’s organizational structure?

TASK 2 : Please read the Empowering Employees article and write up your key insights. ( 1-2 Pages)

i.e What do you now you know which you weren’t aware of before you read this Empowering Employees article.

EMPOWERING EMLOYEES

PHILIP R. LINDSAY, RESOURCE AND ORGANISATIONAL DEVELOPMENT MANAGER, DELOITTE, HASKINS AND SELLS, LONDON.THIS REAL LIFE ORGANISATIONAL DEVELOPMENT PROJECT IN AN

INTERNATIONAL COMPANY IS BASED ON :

· DIAGNOSTIC IMPROVEMENT PROCESS – DIP RESEARCHED AND DEVELOPED BY DR. BABU SUBBARAMAN

· MANAGING PERSONAL GROWTH – MPG RESEARCHED AND DEVELOPED BY BLESSING AND WHITE INC., U.S.A. AND MARKETED BY KEPNER-TREGOE LIMITED.

A paper concerning the use of diagnostic and career development processes to help in the development of an organisational department towards achieving its operational and human resource management objectives.

INTRODUCTION 

Arguably, there are two classic situations which are viewed as being most problematic by both internal and external Organisation Development Consultants. They are, namely:

The “Complex” Situation, where everything seems to be ‘ ‘wrong” as viewed by management. employees and customers” of the organisation. The real complexity however lies not in there being many things ‘ ‘wrong” but in the lack of clarity as where to start to put things i t right”, with priorities shifting with the sands between different involved groups and from moment to moment.

The “Low Energy” Situation, where the level of motivation and morale of those involved has got so low that they no longer “care t t what happens to them. This is very different to the situation where people are actively complaining, disagreeing, or “voting with their feet” and leaving for a brighter alternative. In this latter situation, there is energy and motivation which is channeled against whatever seems to be the source of grievance and that energy can be used positive Iv if harnessed and guided. In the “Low Energy” situation, there is no evidence of dissent or assent, on Iv passive acceptance of whatever causes. Most departures are escape” but not necessarily towards a brighter alternative. Working in this situation feels, as a colleague recently described it , ‘t like pitchforking water back uphill” with the consultant providing most if not all of the energy in the process.

The case to be described and discussed here is an example of the two situations described above occuring at the same time within a single department of an international company. The approaches adopted aimed at addressing both the “complexity” of the situation and the “low energy” of the employees and management .

BACKGROUND :

The department in question provided internal management systems on computer for use by operational units throughout Europe. Initially set—up three years ago, ambitious plans had been put in place for staffing and system implementation. As is often the case, staffing lagged behind the business plan requirements. Internal customers complained about the lack of results and delays. Budgets and targets were revised; different organisational structures and reporting arrangements were made; some key players left and recruitment of replacements proved difficult.

In the eighteen months prior to the commencement of the organisation development work in this department, the external business environment was hardening markedly. There were major shifts in the market place which caused the Company as a whole to re—adjust its market priorities, impose cost constraints and increase the demands for timore results with less resources” The internal environment became highly task oriented while there were major cut—backs in the availability of people—oriented benefits e.g. training, promotions, conference attendances, competitive salary increases, etcetara.

My involvement as an organisation development consultant started three months after the line of reporting had changed from Europe to the United States. The staffing level was at about of the planned level. Project deadlines were being missed, revised and missed again. Management of the department was being openly critised and, in turn, were being openly critical of all around them. As the senior manager commented in an early meeting, “there are so many things wrong that I don’t know where to begin” — the “Complex” Situation. What was not apparent until later was that many department managers also felt so powerless that they were unable even to begin to see that things could change. Additionally, many said later that they really could ‘nt care less if anything did change! !

APPROACHES

Before considering the approaches we finally used, let us first of all consider what needed to be done.

For the ‘ ‘Complex” situation, we needed to simplify or clarify the issues so that they could be addressed. Additionally, we needed to agree some priorities for action so that “we’d know where to start and why we were starting there”.

For the “Low Energy” situation we needed to find an approach that would return to the employees some personal “power” along with a belief that they could significantly influence outcomes.

Obviously, writing remedies is easier than finding ones that work and can be implemented . However, certain ideas sprang to mind. For the “Complex” situation, we felt that we should use two approaches :

. Sensing Interviews.

This approach, using semi—structured interview format, would help to identify and partially quantify discrete issues as perceived by employees and manager.

. Climate Survey

This was more problematic since a climate survey had been carried out a year previously and absolutely no discernible actions had been taken to address concerns. Management and Staff alike referred to the Climate Survey as having suffered from the “Black Hole” syndrome

i.e. information had gone in and nothing had come out. However, we eventually persuaded the employees and the staff to try a new approach called the Diagnostic Improvement Process which differed from traditional climate surveys in that it defined specific steps to take to address concerns identified.

For the “Low Energy” situation, it was decided to put all employees through the Managing Personal Growth Programme which is marketed by Kepner Tregoe Limited.

Brief descriptions of the Diagnostic Improvement Process and the Managing Personal Growth Programme are covered in the next two sections of this paper to help the reader understand the outcomes of this organisation development project.

DIAGNOSTIC IMPROVEMENT PROCESS

The Diagnostic Improvement Process (DIP) was researched and developed by Dr. B. Subbaraman of Dow Corning, Barry, UK.

The DIP is a diagnostic tool aimed at :

· helping an organisation understand how its task and people management processes are perceived and working.

· helping managers and staff determine priority areas for attention and improvement.

· finding process solutions to address areas of concern.

· providing an on—going check on progress.

Unlike many climate surveys, the DIP provides specific recommendations for the remedy of concerns identified in the organisation. Hence, for every area of concern recognised in the feedback, there is a process tool available for use which should address the problem directly. The eleven areas addressed include personal development, performance systems , involvement, situational appraised, problem solving, decision making and potential problem management .

In addition, through the DI P t s statistical basis of analysis , managers and staff can determine more readily the priorities for action and agree them.

The questionnaire is relatively short and easy to understand. Thus it can be used quickly and easily by all levels of staff. It can be used repeatedly to monitor progress and its computerised scoring lends itself to a quick turn round of information.

The feedback is both diagrammatic and tabular, showing discrete items as areas of excellence, strength, opportunitv for added value, and value destruction. There is one additional category which occurs where the perceptions of respondents are inconsistent. This latter category indicates that respondents see satisfaction with this area so differently that they are likely to think that they work in different “companies” if they compare their perceptions one with another. The cause of this is often a function of the quantity and quality of time that the manager spends with each person in the team and the ways that assignments are either handled as groups or individually.

MANAGING PERSONAL GROWTH PROGRAMME

This programme was developed by Blessing—White in the United States of America. It has been marketed in Europe by Kepner Tregoe Limited since June 1985.

The programme operates around the principle belief that individuals are primarily responsible for their own development and personal growth. As such, the thrust is to help individuals take responsibilty by:

· understanding what motivates them

· understanding their relative strengths and weaknesses

· identify how they could use their strengths more and develop in other areas

The assertion is made that the best place from which to start to develop is from where you are now e.g. your current job. Input from the participant and his/her immediate manager is used to enable the participant to finally arrange and conduct a “development discussion” with the immediate manager which proposes ways he/she can use strengths more to contribute to the organisation’s output and ways to overcome perceived weaknesses. In addition, the manager and the participant clarify some aspects of job definition and some ways to make the manager’s style more satisfactory to the participant.

Some key aspects must be emphasised here.

· The participant is responsible for arranging and conducting the development discussion.

· The participant is responsible for managing and making sense of the data or for its clarification.

· The participant is responsible for proposing actions / ideas .

· The participant is responsible for gaining support to do these things.

· The participant is responsible for planning and implementing these things.

· The participant is responsible for asking for changes in the way he is managed and negotiating the changes with this loss.

This is a lot of responsibility. People must be empowered and fairly ‘t high energy” to handle all these things . The progrnmme process builds or releases the power and energy within the participants to take on these tasks. For this reason, the programme was chosen to help in our situation.

RESULTS

The measures of success in an organisational development project are rarely as statistically demonstrable as in other branches of science. Certainly the “chemical” demonstration of behaviour change is less easily analysable and rarely definitive. So what results can we point to and discuss?

Let ‘s recap on what we were trying to do. In the “Complex situation, we were trying to identify where to start and what to do to improve our situation. What evidence do we have that we have made any headway?

. Following the DIP, managers and staff discussed the findings and identified some specific key actions to improve situations e.g. a top priority action is to clarify and communicate the strategy for the department in reference to the strategy of the Company. This was assumed to be understood previously.

. The DIP identified clear priorities for action which were endorsed by senior management and staff.

. Some items previously thought to be “top”/ high priority showed as low importance on the DIP. What made this an interesting finding was that, by and large, the respondents agreed they were low priority, when challenged. Why then had the Sensing Interviews indicated these areas as potentially high priority? The answer is, in retrospect, very simple. People can only complain about those things that are legitimate and reasonably describable so that ‘s what they do. How can a clerk complain about strategy when he/she cannot articulate it? Where does it say in your contract of employment that you can complain if your manager doesn ‘t develop you very well? Or doesn’t involve you in his work planning. Being unable to express yourself adequately or feeling that your complaint is not legitimate does not stop you feeling aggrieved. So in those circumstances people will focus on what they can articulate and what they have a right to complain about e.g. pay, conditions, overtime, staffing and the ubiquitous but undefined communications. What the DIP achieved was the generation of a common language which legitimised issues and provided a means for their discussion at all levels in the organisation.

. Key priorities are being monitored and everyone is aware of the plans for their improvement.

In the “Low Energy” situation, we were trying to empower the employees so that they did care what was happening to them and felt powerful enough to influence some outcomes. So, again, what evidence do we have to show that our interventions were positive and produced the results we wanted?

. Approximately 6070 of those employees that went through the Managing Personal Growth programmes in Jul v and August arranged and conducted development discussions with their managers by the end of September.

. All managers reported that their staff proposed ways to enhance their own personal performance and future development during the discussions.

. Four experienced staff members were able to provide counsel that their managers ‘ views of their career paths were at odds with their own ambitions and values. They also felt that they would have left had the career paths been pushed much more.

. Management and Staff complained when an MPG programme was postponed because they felt ‘l it might disrupt the momentum that has been generated already 

. Management and Staff have asked to do the DIP again. (Previously, they were somewhat t ‘frightened” by what might come out of it) .

CONCLUSIONS

The results are not definitive but I believe there are enough indicators to show that the organisation is moving in the right direction. Perceptions from the “Internal’ I customers are harder to gauge at this time although there is some evidence that there is more recognition of achievements and less volume of criticisms. The members of the organisation itself are cautiously optimistic and, by report, more energetically trying to improve their situation.

And what about conclusions from the internal consultant. An obj ective I have running through my philosophy of intervention is that I leave some tools or insights that the organisation itself can use and continue to use in its own development. In the use of DIP and the Managing Personal Growth programme, I believe that some tools were introduced and remain with the organisation and its members which will help them over the years become more productive, powerful and insightful in dealing with the dynamic and demanding world of work.

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