Assignment 2— Evaluation and analysis case study (1600 words) Due Friday 22nd December by 6pm to Turnitin. Worth 35% of final mark
Present detailed answers, using 6 academic references minimum to support them, to the questions posed at the end of this case study in approximately 1600 words in total:
Background context to the case:Hiroshi Okuda, is the former chairman of the Toyota Motor Corporation who was in this role from 1999 to 2006. Under Okuda’s leadership Toyota shifted from not just being the number one carmaker in Japan, but rapidly reached to be a main competitor to General Motors in the United States. Okuda is remembered for his vision in seeing the need for hybrid cars early and pushing Toyota towards quickly bringing them to market. Okuda is often studied in business schools relating to his leadership style. One of Mr. Okuda’s biggest achievements was Toyota’s aggressive expansion of production in the U.S.
Read the following case study and answer all the questions.
Present detailed answers to the questions posed at the end of this case study in approximately 1600 words in total:
Toyota’s tough boss (taken from Robbins, Bergman, Stagg and Coulter 2006, p.600) Hiroshi Okuda is not afraid to speak his mind or impose radical change in an organization. And because of these traits he is memorable at Toyota Motor Corporation where he is the chairman of the board. Prior to becoming chairman, Okuda served as Toyota’s president – the first non-family member in over 30 years to head the company. He also is unusual among other Japanese executives because, in Japan, executives are supposed to be unseen. Okuda justifies his outspoken and aggressive style as being necessary to change a company that had become lethargic (i.e. tired) and overly bureaucratic. Okuda moved ahead at Toyota by taking jobs that other employees did not want. For example, in the early 1980s the company was trying to build a manufacturing facility in Taiwan, but the Taiwanese government’s demands for high local content, technology transfer and guaranteed exports convinced many at Toyota that the project should be scrapped. Okuda thought differently. He successfully lobbied for the facility in the company, and it is now very profitable for Toyota. As Okuda noted, ‘Everyone wanted to give up. But I restarted the project and led it to success.’ His drive and ability to overcome obstacles were central to his rise in the company’s hierarchy. When Okuda ascended to the presidency of Toyota in early 1995 the company was losing market share in Japan to both Mitsubishi and Honda. Okuda attributed this problem to several factors. Toyota had been losing touch with Japanese customers for years. For example, when engineers redesigned the Corolla in 1991 they made it too big and too expensive for Japanese tastes. Then four years later, in an attempt to lower costs significantly, they stripped out so many features in the car that the Corolla looked too cheap. Competitors, on the other hand, had also done a much better job of identifying the boom in recreational vehicles – especially the sport-utility market. Toyota’s burdensome bureaucracy also bothered Okuda. A decision that took only five minutes to filter through at Suzuki Motor Corporation would take upwards of three weeks at Toyota. In his first 18 months on the job Okuda implemented some drastic changes. In a country where lifetime employment is consistent with the culture, he replaced nearly one-third of Toyota’s highest-ranking executives. He revamped Toyota’s long-standing promotion system based on seniority, adding performance as a factor. Some outstanding performers moved up several managerial levels in one go – something unheard of in the history of the company. Okuda also worked with the company’s vehicle designers to increase the speed at which the vehicle went from concept to market. What once took 27 months was shortened to 18 months. And now the company is making a custom car within five days of receiving an order. Finally, Okuda is using the visibility of his job to address larger social issues facing all Japanese businesses. For instance, he accused Japan’s Finance Ministry of trying to destroy the car industry by driving up the yen’s value. And he has been an audible voice in the country, condemning the lax lending practices that forced Japanese banks to write off billions of dollars in bad loans and led, in part, to that country’s economic crisis in the late 1990s and early 2000.
Unfortunately, some of Okuda’s actions may have backfired. It has been suggested that the reason he was removed as president of the company in June 1999 was that he had overstepped the boundary at times with his blunt demands for change; and his refusal to bail out other members of the Toyota keiretsu may have offended the founding Toyota family. However, even though he was no longer president, his strategic leadership helped him to be appointed to the chairman’s job.
Discussion questions Answer all three (3) of the following questions in short answer format.
1. Explain trait theory then apply it to Okuda in this case. Discuss with examples from the case of leadership traits Okuda demonstrated during his time at Toyota. Provide an example of another leader who has also demonstrated leadership traits.
2. Drawing on leadership theory from this Course, how would you describe Hiroshi Okuda’s leadership style/s? Cite specific examples in the case study that support your choice.
3. Explain the terms ‘transactional’ and ‘transformational’ leadership. What form did Hiroshi Okuda exhibit? Cite specific examples in the case study that support your choice.
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Okuda’s Case Study
The trait leadership approach is signified by the characteristics of the leader. The traits which a leader has are of great significance to the management of the organization and the performance of the employees. Remarkably, the leadership efforts are shown by the characteristics which indicate the difference between the leaders and the non-leaders. Democratic leaders are the best examples of the leaders who are guided by their traits in the leadership of the organization (CL 2013, p. 36). The character of the leaders is best exhibited through the leadership behavior of the manager of a given organization. For instance, in Okuda’s case, the behavior of persuading issues and facing them with confidence led to the success of the Toyota Company. Furthermore, the ability of the leaders to stand out is significant in the success of the organization.
The trait approach to leadership leads to the difference between the transactional leaders and the transformational leaders. Transactional leader mostly deals with the productivity by the reward (Decenzo 2011, p. 296). The awards are meant to motivate the workers to work more hard. The transformational leader on the other and is characterized by the ability and the capacity to inspire the workers and stimulate the followers to achieve the goals which seem extraordinary to the organization (Decenzo 2011, p. 307). The changes which were brought about by Okuda in Toyota are the identification of a transformational leader, especially in the disorientation of the management team and disregarding the founder family hierarchy. Business and military are examples of institutions were the transformational leadership is well reflected in the transactional leadership. Notably, the transformational leaders lead to the achievement of the company’s goals through the production of performers among the employees. As such, transactional leadership leads to creativity, employee satisfaction, and high level of productivity, among other values to drive to the attainment of the organization’s goals. Transformational leadership leads to elements such as the idealized influence, intellectual stimulation and the individualized consideration (Schieltz, 2017).
The qualities of a leader are hence of most considerable significance in the leadership position. Toyota Company almost lost to the competitors due to lack of enough capacity to build a manufacturing facility in Taiwan. The aggressiveness which was expressed by Okuda when he confronted the Taiwanese government brought a huge change in the organization. The factors which seemed a giant including high local content demand by the state of Taiwan and technology transfers among other hindrances were countered as the company made its way to Taiwan. Such an achievement exists due to the characteristics which were exhibited by the leader. As such, the trait approach of leadership is of great significance, and it is an indicator of the values of a leader in the quest to transform the company thoroughly and to achieve the organizational objectives and goals.
A leader is characterized by bot traits and the behaviors. The personal characteristics of a leader, hence draw a line between the effective leaders and ineffective leaders in a given organization. For instance, in the Toyota Motors Company, the leaders who were before Okuda were weak concerning the changes which were brought about by Okuda in a short period of working for the organization.
There are various characteristics which make a leader effective in an organization. A leader should always be creative and as such be original in their thinking (Schermeror 2014, p. 344). For instance, in Toyota Company, there had been an issue of initiating a manufacturing facility in Taiwan due to the restriction which had been put in by the Taiwan government. It took a creative leader to negotiate with the state, and as such, all the factors which were earlier a hindrance were solved, and the company succeeded in the project. The drive which was shown by Okuda in his transformative leadership which was not based on the family connection also led to the organization’s success. More so, Okuda had a great experience in the Motor industry and as such the knowledge e has acquired in all is years of working contributed to his high energy to change the organization. Democracy is also a great leadership quality exhibited by Okuda in his presidency of Toyota Company. Democracy involves the inclusion of all employees in the operations of the firm and hence encouraging participation (Decenzo 2011, p. 297). Democracy is a virtue which leads to management of people in the organization more effectively than when people are dictated by their tasks.
Okuda was able to transform the whole organization and changing the dreams into reality. He caned 1/3 of the Toyota highest ranked employees changing the culture which has traditionally been consistent with employment. In 18 months when he worked for Toyota, the changes were noticeable, and the market for the Toyota Company was highly improved. Okuda’s greatness in leadership extended to the social issues. He was aiming at changing the whole business environment, especially for the motors in Japan. For instance, Okuda went ahead to confront the Ministry of Finance in Japan for attempting to crash the car industry through increasing the value of the Yen. The advantages which would be acquired through Okuda’s claim would not only benefit the Toyota Company but also be of great importance to all other businesses in Japan. As such, Okuda was a great leader, and the success was incredible. However, change always faces resistance from different the affected group of people. Okuda overlooked the Toyota founding family and was accused of overstepping the boundaries. He is still celebrated in Japan to date due to his leadership qualities.
Notably, transactional leaders are methodical and hence lead others to the attainment of the organizational goals. A transactional leader keeps others focused on and consequently increasing their performance in the company. Transformational leadership, on the other hand, is different. Transformational leadership involves the inspiration of others and the achievement of the extraordinary goals of the company through the motivation. Transactional leadership is, however, unable to meet the challenges of the present-day work environment (Schermerorn 2014, p. 345).
Traits of a leader are a determining factor in the success of the company. Such characteristics include the internal qualities which are distinct. As such, the traits of an individual make him or her unique. Personality characteristics, the abilities, social factors, and skills are some of the most important traits in the management of the organization (Tein 2007, p. 402). The features were exhibited by Hiroshi Okuda as he worked in the management team of Toyota Company. For example, Okuda confronted ted Ministry of Finance for driving up the value of the Yen. The act of advocating for others in the Japanese business environment was a sign of social factors. His ability was indicated by the capacity to change the culture of the organization. Initially, the employment was consistent with the culture, and as such, the founding family occupied the executive positions in the firm. However, Okuda managed to replace one-third of the executives. He considered performance as the determining factor to be in the top position. Such a democratic move is an indicator of the transformational leadership. Reshuffling the leaders created change in the culture of the Japanese business setup.
The Toyota Company was able to achieve extraordinary goals. For example, the project of establishing a manufacturing facility in Taiwan was faced with some challenges before the administration of Okuda, but when he took over, the situation was simplified, and the goals were achieved. Okuda did not have a fear of expressing himself, and this increased his ambition and capacity to face all the threats to the success of the company particularly in the market.
Okuda’s focus was in line with the goals of transformational leadership. The goals include changing the system and solving the problems through strategies which outweigh the old methodology of administration in the firm. Furthermore, Okuda dwelled in the maximization of the team’s capacity and ability through changing the culture of management. Okuda also avoided some traits of the transactional leaders. For instance, he ensured that he works outside the system. He also avoided fitting experiences to a typical pattern to solve challenges. Okuda also avoided the step to step approach which would rather take much time (Spahr, 2017). Although he was thought to overstep the boundaries, Okuda’s contributed much to the success of the Toyota Company among the competitors.
Leadership approach is diverse. The leaders are, however, identified through the behavior and traits. A good leader can be emulated by his followers, unlike the ineffective leaders. The best leaders are those who lead to the transformation of the organization. Okuda is a great example of an excellent leader. For the years he served at the Toyota Company, many changes were ranging from changing the culture of the organization to the social factors. A transformative leader is a more effective than a transactional leader. There is always a need to inspire the employees in the company to create self-satisfaction and improve performance through the motivation. Leaders should adopt the transformational leadership to achieve the goals of the organization.