Managerial Dichotomies At Honda Motors Commerce Essay Example
Managerial Dichotomies At Honda Motors Commerce Essay Example

Managerial Dichotomies At Honda Motors Commerce Essay Example

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Introduction

The automotive industry is highly competitive, with established car makers like Toyota, Honda, Nissan, and Daimler Benz needing to adopt appropriate strategies and decisions to ensure customer satisfaction. In this dynamic market where the customer is key, meeting their needs and demands is the primary goal for any well-managed company or organization. Thoroughly researching current and future customer demands is crucial for companies to maintain a secure position in the market. This case study analysis focuses on Honda Automakers and examines three main topics related to corporate strategies in the car industry. The first section evaluates Honda's operations in terms of planning versus execution.

The first part of the text examines the advantages of learning, market positioning, and developing internal resources and product-related core competencies versus process-related core capabilities. The second part discusses the differences between the Nipponese M

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anagement Model and the Western Management Model, using the Honda Case study as an example.

The final part will address the effects of 'corporate governance' and 'corporate social responsibility (CSR)' on Honda Motors' global financial and non-financial performance outcomes.

Planning vs. Learning

Numerous analysts and critics have examined the concepts of Managerial Dichotomies, including rational vs. incremental or planning vs. learning, among others.

Experts have debated whether companies can simultaneously be both planning oriented and learning oriented. However, Honda has successfully reconciled this duality by developing its own strategy. Reconciliation entails finding a middle ground that allows both poles of a duality to be compatible and complementary to each other. Honda has effectively reconciled the duality of Planning vs. Learning.

In the process of learning, Honda has benefited greatly as a company. During the production and desig

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of engines, Honda has learned from the market about the deficiencies in engine designs. They have then reverse engineered the designs and planned for new designs that integrate alterations to address these deficiencies. In one example with their CVCC engine (compound whirl control burning), they went against the market tendencies and made alterations to control pollutant emissions (Ebrahimi and Holford, 2005).


Positioning Versus Developing Internal Resources

Honda has consistently played a role in the market that proves many theories written by theorists to be incorrect when it comes to Honda.

Honda has effectively positioned its vehicles worldwide, with manufacturing facilities in Europe, North America, and other locations, making it the first Japanese company to do so. This strategic duality allows Honda to be both innovative and competitive. In the early 1990s, Honda implemented robotic technology in their car manufacturing process, becoming the pioneer in this field. These humanoid robots enhanced their efficiency and time management in auto production.

ASIMO, the automatons, were employed for welding purposes, achieving superior quality compared to manual work. Consequently, this enhanced and strengthened their internal operations (Official Honda Website, 2010).

Product-Related Core Competencies vs. Process-Related Core Capabilities

Japanese cars, unlike American cars, consistently possessed a competitive advantage due to their lower pricing. Honda pursued the same strategy.

Their cars were of good quality and had affordable prices. Honda achieved this by reverse engineering American cars, understanding the processes and technology involved in making them successful, and then creating similar cars at a cheaper cost. This became one of Honda Motors' core competencies and gave them an advantage, with even Americans choosing to buy Japanese cars instead of those made in their own country. In addition to being

cheaper than other cars, Honda continuously upgrades their vehicles, including the recent launch of their new V-6 model of the Honda Accord, a new navigation system, a new hybrid model, and technologically advanced Formula 1 racing cars.

Honda not only maintained a strong market position for their product but also enhanced their production process by integrating their product core competence. It is commonly believed that when a product is manufactured at a low cost, its quality is compromised, whereas high-quality products are costly and time-consuming to produce. However, Honda challenged this belief by implementing the Right in Time principle, which advocates for producing a product at a low cost without compromising its quality. Additionally, Honda embraced the concept of Just in Time to reconcile these contradictions and manufacture high-quality products within a shorter timeframe. In contrast to Western companies that prefer the just in case strategy, Honda consistently follows the just in time strategy at their facilities (Andrew, 1999).

The Nipponese Management Model Compared to the Western Management Model The traditional approach to management in Japan, known as the Nipponese Management Model, is characterized by highly decentralized organizations with a flat or horizontal structure. Honda, as a Japanese company, follows both Western and Nipponese management styles, illustrating the dichotomy between the two. Honda adopts practices that it finds beneficial for the company. In Japan, Honda has a decentralized structure and emphasizes rewards and compensation for employees. They provide an example of decentralized decision making and base employee rewards on merit and work quality, rather than seniority as typically seen in Japanese companies. The major differences between the Western Management Model and the Nipponese Management Model differentiate companies

based on these criteria. Some of these differences are discussed below.

The structure of an organization, as indicated by the Organization Structures tag, refers to the arrangement of "who reports to whom" and the control of span. The Western management model favors a vertical structure where decision-making is centralized, while Japanese companies typically adopt a decentralized and horizontal structure (Andrew, 1999).

Regarding Type of Duties, Japanese companies tend to assign broader responsibilities to their employees, while Western organizations following the Western management style prefer formalization and standardization, dividing specialized tasks among employees. Determining which approach is best suited for each situation can be challenging (Hofstede, 1993).

In terms of Labour Relations, in Western management approach, employees are recruited based on their skills and performance. They have the ability and are encouraged to terminate specific individuals if deemed necessary. In contrast, the Japanese management style believes that everyone has their own capabilitiesAn employee is expected to stay with the organization for their whole working life unless they choose to leave.

This approach has been widely adopted in other states due to its positive impact on employee mentality. It makes employees feel valued and essential to the organization, motivating them to work harder. This approach has proven successful in many companies with high employee turnover rates, improving work quality and reducing turnover. Honda also follows a similar approach by rewarding and evaluating their employees, only letting them go when necessary (Andrew, 1999).
Push Versus Pull System
The Japanese just-in-time production and inventory system enables customization of products according to customer demands.

Originally introduced by Honda, the Japanese management style of utilizing a pull system instead of a push system, which Western companies typically use,

allows for production in bulk and then forces the inventory to be purchased (Andrew, 1999).

Western organizations and manufacturing companies follow standardized and formal procedures, emphasizing task specialization and work distribution. In contrast, Japanese companies exhibit flexibility in their approach, adjusting their methods based on the job type, time, and situation. They prioritize achieving the best results rather than focusing on who is performing the tasks. While this approach has its advantages, such as increased adaptability, it also presents challenges since decisions need to be made quickly. Therefore, Honda must exercise caution in their decision-making process and strategies.


Individuality and Bolshevism

Japan, a leftist society, has a cultural preference for working in squads and groups due to their orientation towards household and group dynamics. This inclination to belong to a group or squad is also evident in their homes. Similarly, Western management practices also prioritize individualistic approaches, as influenced by their culture (Hofstede, 1993).

Production Size:
There is another difference in the Western direction theoretical account and the Japanese direction theoretical account that is related to the overall operations manner of the concern. Japanese houses produce in small lots whereas Western direction following companies produce bigger and larger lots of merchandises. Japanese houses believe in quality merchandises and therefore produce less at one time. This difference is visible in the strategies they follow as well. Japanese follow just-in-time scheme whereas Western companies follow just-in-case scheme.

Companies often blend different management styles to find a mutually compatible approach that suits their business. Honda serves as an example of how manipulating norms and values to best suit the company can lead to success (Honda official website).

Honda Motors, a

well-known car manufacturer and one of the Big three in Japan, consistently works on certain principles that have elevated its status in the global automotive industry. With operations in over 80 countries, Honda continually strives for improvement (Karmayog, 2008). In addition to producing high-quality cars, Honda also contributes to community development by establishing new factories and facilities and creating job opportunities for local residents.

Research has shown that individuals from emerging and developing countries and markets tend to have a higher perception of corporate societal responsibility towards companies in the car industry compared to other industries. This is because the car industry offers more opportunities for employment. Honda, on a global scale, actively participates in various community service initiatives, thus fulfilling its social responsibilities. A recent example of this is the establishment of a new community service project in a small town in Delhi, India.

In Delhi, India, Corporate Social Responsibility activities are being undertaken by Honda Motors. These activities include various projects such as installing hand pumps in underdeveloped countries to provide clean water, building proper sewage and drainage systems to reduce illness among nearby residents, and constructing and restoring primary schools and colleges. Honda provides similar community services around the world, tailoring them to meet specific local needs. Corporate Governance is a broad topic that encompasses the policies, regulations, and rules within a company to ensure harmony and benefit for stakeholders. These policies and systems govern the organization according to the values and needs of stakeholders to prevent conflicts. Honda places great importance on community welfare and ensures that ethical values and high standards of law are upheld. (Source: Karmayog, 2008; Honda official website)Honda has

established a comprehensive Corporate Governance system to ensure compliance with the company's laws and policies at all levels of operation, including top management and first-line supervisors. The corporate governance principles of Honda include Conformity, Ethics, Environment, and Risk Management. Conformity ensures that the company's operations comply with all necessary laws and regulations, maintaining the trust of consumers and stakeholders.

Ethical motives Honda has established a business ethics commission that addresses all issues concerning ethical laws and regulations. The commission, governed by compliance and corporate officers, meets six times annually. The ethical issues can pertain to various subjects, such as gender abuse, child labor, or any matters relating to labor relations (Honda, official website).

Hazard Management Honda adopts its unique approach to dealing with risk and has established exemplary risk management systems in the market (Honda, official website).

The top management at Honda has developed a comprehensive set of regulations and policies to be followed during times of crisis or problems. Honda's top management is constantly vigilant through research and prediction. Their analysts propose necessary actions for the future, preparing the Honda risk management team for any upcoming hurdles and crises. This approach by Honda has been adopted by many other companies, proving that Honda has a strong strategy and its innovations are responsible for its success in the car market (Honda, official website).


Fiscal Impact of Corporate Social Responsibility and Corporate Governance

The overall impact of corporate social responsibility on the company's finances is that when all stakeholders are satisfied with the company's image and profile, they tend to trust the company more and may invest more. From a consumer's perspective, sellers have

consistently shown that consumers and the general public view companies engaged in community service and working for the improvement of underdeveloped societies in a positive light.

Peoples also seek and favor organizations that expand and establish their facilities in new markets, thus creating opportunities for new careers and jobs. This, in turn, increases sales and revenues, resulting in a positive impact on the company's financial performance. On the other hand, Corporate Governance focuses on enhancing the experience of those who manage the business. These policies and systems contribute to a promising future for the company as employees feel valued and important due to the implementation of these systems. Similarly, consumers perceive that these organizations are working for their welfare, creating a positive image that benefits both employees and consumers, ultimately benefiting the overall business of the Company (Honda, official website).

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