TOYOTA VS . MACHINE – A CONTRAST IN CULTURE, COMPANY GOVERNANCE, OPERATIONAL STRATEGY, AND FINANCIAL OVERALL PERFORMANCE Mohamad L. Nayebpour Graduate student Faculty of Business Administration Keller Graduate student School of Management DeVry University 2000 West Cycle South Harrisburg, Texas 77027 (713) 212-3610 [email protected] edu H L
Akira Saito Visiting Research Fellow The Institute of Economic Analysis Chuo University Japan [email protected] chuo-u. alternating current. jp L H
Toyota Engine Corporation and Nissan Engine Corporation were established in 1937 and 1933 correspondingly. They have been facing the same global challenges and also the same politicoeconomic changes domestically and internationally. They have similar business solutions such as employees, capital, goods, technology, and information. Just how, then, will there be such significant differences in all their overall organization performance? The case highlights the role of corporate tradition, leadership, organization creed, and company governance inside the operational approach and economic performance from the two companies. It also details recent successes and challenges that Renault-Nissan alliance faces in the future. Keywords: Toyota, Machine, Culture, Leadership, Governance, Approach, Alliance Advantages
The automobile sector was born in France and emerged being a modern sector through the assembly line mass production of Model-T (1913) by simply Henry Honda who set up the Kia Motor Business in 1903. Bill Durant founded the General Motor in 1908, and Chrysler was founded in 1925. Nissan and Toyota were founded in 1933 and 1937 respectively. The two major Japanese people automakers have been around in the same market, facing a similar global forces as well just like the same politico-economic challenges domestically and globally. Although they have had similar organization resources including work force, capital, products, technology, and data, major variations in their economical performance started to emerge in the 1980s. Toyota had a healthy and balanced growth in its market share, income, and make money from early 1970s, but 567
Nissan did not fair well in the 1980s. Nissan's overall performance turned to get the most severe in the 1990s, and it incurred eight years of total annual losses in eight numerous years of operation via 1992 to 1999 (Figure 1). Their automobile development declined considerably in the nineties; its home market share rejected from 18. 6% in 1989 to 13. 3% in 1999; as well as its global business declined from 6. 6% in 1991 into a low of 4. 9% in 1998. Toyota widened the gap altogether number of vehicle production more than 30 years ago and by the finish of 2150 it was generating two mil more cars annually than Nissan (Figure 2). The objective of this conventional paper is to discuss factors that contributed to the gap in the performance from the two automakers before Nissan's alliance with Renault. It can be argued the performance in the two businesses can be related to their organization creed, frontrunners, corporate traditions, corporate governance, operational strategies, and consequently their particular corporate competitive strategies. All of us will learn how culture, leadership, and corporate governance play significant roles in gaining and sustaining competitive advantage for both the corporations. Furthermore, the new successes and challenges that Renault Nissan alliance looks in the future will probably be addressed.
Physique 1 - Toyota vs . Nissan Net Income
Figure 2 - Toyota vs . Nissan Production
six, 000, 500
Income/Loss (Million Yen)
1500000 1000000 500000 0 -500000 -1000000
1990 1992 year 1994 1996
some, 000, 000 2, 500, 000 zero
Toyot a Nissan
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Sou ur c electronic: D a t a mo and i to o l. c to m
Source: Datamonitor. com
Business Governance and Business Composition
The corporate framework and governance of Toyota and Nissan can be better understood because of basic corporate development of the Japanese industrial Zaibatsu and Keiretsu. As early 1600s, the cargo dynasties of Mitsui, Mistsubishi, Yasuda, and Sumitomo acquired partial charge of...
References: Cusumano, M. A., 1985, " The Japanese Car Industry”, Harvard University Press. Datamonitor. com, " Company Profile -- Nissan Engine Co., Limited. ”, www.datamonitor.com, Reference Code 1210. Datamonitor. com, " Company Profile-Toyota Motor Corporation”, www.datamonitor.com, Guide Code 1841. Ghosn, C., 2002, " Saving Organization Without Losing the Company”, Harvard Business Review. Kotter, J. P. and Rothbard, In., 1993 " Cultural Alter at Nissan Motors”, Harvard Business Case No . 9-491-079. Morck, L. and Nakamura, M., 2004, " Been There, Done That – The of Corporate and business Ownership in Japan”, Center for Economic Research, Hitotsubashi University, Conventional paper series Number 2004-4. Toyota Motor Distribution (1985), " Open the Window, 2 weeks . Big Universe Out There” Toyota Motor unit Publication (2001), " The Toyota Method 2001” Toyota Motor Web page, http://www.toyota.co.jp/en/vision/message/index.html Yoshiro, M. Con. and Fagan, P. M., 2003, " The Renault-Nissan Alliance”, Harvard Business Circumstance No . 9-303-023.
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