Operations Improvement Plan Implementation

Process Identification

James Smith

MBA 6022 Unit 1 Assignment 1

1/16/16

Introduction

For a long time, Toyota Motor Corporation has been regarded as the pinnacle of Japanese innovation, manufacturing quality and industrial vehicles, well known for their economy, reliability, and fuel efficiency. However, since October 2009, Toyota has suffered a severe crisis due to unintended quality problems in its vehicles which triggered Toyota’s first of a series of highly publicized official recalls of Toyota cars all over the world. Pinpointing a potential problem in which poorly placed mats under the driver's seat lead to uncontrolled acceleration in a range of Toyota car models. The recall happened due to a report of an accident in California, where Lexus Sedan accelerator got stuck, leading to the death of the driver. This crisis threatened Toyota’s previous reputation of good quality cars and also the company’s brand image built over time (Liker & Ogden, 2011).

Centralized Power Structure in the Decision Making Process

At the time of the accelerator crisis, Toyota Motor Corporation had a centralized power structure that concentrated most of its power and critical decision-making responsibilities to a few key leaders (Carpenter, Bauer, & Erdogan, 2010).

Importance

The centralized power structure in Toyota Motor Corporation had been extremely efficient in regards to business decisions. The few key leaders in the corporation developed the company's mission and visions, and set objectives for managers and employees to follow when achieving these goals. The result of this approach to power structure is reduced conflict during decision making which consequently leads to faster execution of strategies and actions. Additionally, control and accountability is achieved as leaders are in charge of all major decisions hence hold great control over the operation of the company and the development of its culture.

Scope

The scope of a centralized power structure does not stretch far regarding major decision-making processes as this is reserved for the key leaders in the company. However, the effects and consequences of these decisions will affect the entire company despite majority of the parties not being involved in the making of the decisions.

Parties involved

Given the narrow scope of the centralized power structure in the decision-making process, the parties involved in the process are few. Only key leaders in a company are involved in making the major decisions in the company. All other parties mainly follow the decisions made or support the implementation of the decisions.

Priority

Issues and conflicts in and within a centralized power system in the decision-making process in a company have the ability to paralyze the productivity of the company. The urgency and timeliness of resolving these issues cannot be underestimated. When these conflicts are dealt with constructively, effectively, and in good time, more opportunities for learning and improvement can be presented.

Benefits

If Toyota Motor Corporation were to improve their centralized organization structure, they would have a precise control over budgets and products and, they can ensure that no risks are undertaken without the knowledge of the key leaders. Additionally, there would be easy coordination as it would be easy to ensure that everyone acts together, there being no alternate voices to create distractions.

Costs

The costs associated with Toyota Motor Corporation not improving this process would be heightened bureaucracy within the company, red tape, and inefficiency.

Crisis Management Process

At the time of the accelerator crisis, Toyota Motor Corporation had a crisis management process that dealt with the crisis that threatened to harm the company and Toyota cars' consumers.

Importance

The importance of a crisis management process for Toyota Motor Corporation is that the process creates a contingency plan when circumstances that could harm the company arise and identifies alternative courses of action to deal with them. Crisis management also details the procedure of maintaining essential services and operations within Toyota Motor Corporation in the event of a crisis, limiting the damage that may be caused.

Scope

Given the importance of good crisis management, the scope of an effective crisis management process is quite broad. Crisis management process involves preparedness, response, and reaction. Preparedness includes protection of physical and intellectual assets, response involves communications and restoration while reaction incorporates the emotional toll of the crisis.

Parties involved

A good crisis management process constitutes a crisis management team that has a clear understanding of to handle a crisis beginning with before they occur. The common members of a crisis management team would be public relation, legal, operations, finance, and human resource.

Priority

Toyota Motor Corporation should append high priority in solving issues in its crisis management process. The company’s reputation and consumers’ trust in the company would be in jeopardy if these issues are not resolved promptly.

Benefits

Strengthening the crisis management process in Toyota Motor Corporation would lead to identifying obscure vulnerabilities within the company which would help in effecting wise and courageous actions rapidly. Also, it would build an environment of trust which would reform consumers’ mindset on the company.

Costs

A bad crisis management process for Toyota Motor Corporation would be a bad reputation amongst cars consumers which would cause reduced sales as a result of diminished trust in Toyota’s vehicles.

Operations Improvement Plan

A centralized power structure in decision-making process faces a lot of setbacks especially for companies the size of Toyota Motor Corporation. Requests must follow through the chain of command, decided upon and communicated back down which mainly results to bureaucracy and inefficiency. Key leaders who are tasked with making the major decisions in this power structure are also overburdened denying them time to make higher-level strategic decisions. A more decentralized structure which utilizes individuals with a variety of expertise and knowledge to run business operations would be present numerous advantages for Toyota Motor Corporation.

References

Carpenter, M., Bauer, T., & Erdogan, B. (2010). Management Principles. Jupiterimages Corporation.

Liker, J. K., & Ogden, T. N. (2011). Toyota Under Fire: Lessons for Turning Crisis into Opportunity. The McGraw-Hill Companies.