Toyota

Article

“Losing its shine”

Dec 10th 2009
From: The Economist print edition

It is non unusual in Japan for embodied leaders to muddle semi-ritualized displays of humility. But when Akio Toyoda, president of Toyota Motor Corporation since June and grandson of the firm’s founder, addressed an audience of Japanese journalists in October his words take aback the world’s car industry.

Mr. Toyoda had been reading “How the Mighty revert”, a book by Jim Collins, an American management guru. In it, Mr. Collins (best known for an earlier, more upbeat work, “Good to nifty”) describes the five stages with which a proud and thriving club passes on its way to becoming a basket-case. First comes hubris born(p) of success; second, the undisciplined pursuit of more; third, denial of bump and peril; fourth, grasping for salvation; and last, capitulation to irrelevance or death.

Only 18 months ago Toyota displaced General Motors (GM), a move icon if ever there was one, as the world’s biggest carmaker. But Mr. Toyoda claimed that the book described his own company’s position. Toyota, he reckoned, had already passed through the first three stages of corporate decline and had reached the critical fourth. According to Mr.



Collins, fourth-stage companies that react frantically to their engagement in the belief that salvation lies in revolutionary neuter usually only hasten their demise. Instead they need calmness, taper and deliberate action.

Is Toyota really in such dire headspring? And if it is, can a company that for decades has been the yardstick for manufacturing excellence worm itself around in time?

A reliable engine stalls

In many ways, Mr. Toyoda is right to sound the alarm. Toyota could not realize been expected to shrug off the storm that swept through the car industry after the collapse of Lehman Brothers in family last year; but rivals, notably Volkswagen (VW) of Germany and Hyundai Kia of South...If you want to captivate a full essay, order it on our website: Orderessay



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