America
Employees
Through the law of the US workforce there are few restrictions imposed on the employment of an employee or his dismissal. Because of this, employees of US companies are willing to change frequently the workplace. Changing job occurs:
‘ both from the company’s initiative, dismissal for economic reasons or otherwise;
‘ but also of the employee’s initiative, executor or manager, when it receives a better offer of employment.
Firms prefer to change personnel depending on needs, rather than investing in its training. This policy is reflected by the fact that the largest investments in human resources are directed towards the selection and recruitment.
In specific human resource management activities are employed three types of persons:
‘ The first category which bears the entire responsibility in this area is top management, respectively the president of the organization that imposes a particular work environment. He is helped by executive directors in setting goals and policies in this area.
‘ The second category is represented by all the managers of the organization that put into practice human resources policy.
‘ The third category is represented by department personnel with an active role in the decision-making process related to human resources at the level of organization and policies in this area.
Promoting represents the advancing of employee into a better paid job, which implies more responsibilities and requires a superior qualification / training; they can recourse to a “test” promotion to force skills and to form professional managers.
Management training is performed primarily at individual level, in school where lays down the basis of economic thought. University diploma is considered by American manager to be a vital starting point, later supplemented by training in business. Enterprises provide further a staff training, both programs outside the company, in specialized schools and universities, and within the organization.
Usually, management / administration prefers to promote young people in higher positions when they consider that they have the necessary qualifications and skills; prioritization criteria for promotion to management positions :
‘ personal qualities and leadership potential (personality tests);
‘ the overall level of preparedness of the person after college diploma, MBA or similar diploma;
‘ employee seniority in management positions within or outside the company.
American motivating managers and employees does not have complex connotations as in the case of European or Oriental companies, consisting generally in cash rewards.
Bonuses, profit participations or preferred shares, are the main methods of promotion. Young employees are often motivated also by promotion opportunities. Unlike Europeans, Americans need receptivity, Unlike Europeans, Americans need responsiveness, continuous encouragement and praises from superiors.
In the US there is no explicit regulation that requires companies to allocate funds for training employees, whether executives or managers. However, medium and large companies set up in time their own different qualification procedures and improving the training of their employees.
The training provided for these two categories of employees:
a) Executor wage-earners
For executors, the main training methods of which American companies resorting are:
‘ A form of training through job rotation, when the new employee the new employee is embedded successively in separate compartments;
‘ Apprenticeship is used for those items / activities that require long periods of training under the direct guidance of a highly qualified worker;
‘ Preparing to work when the employee is guided by specially appointed supervisor or instructor;
‘ Training outside the company when the employee is sent on company expenditure on training centers or colleges in universities.
b) Managers
Managers in the US claim to practice a participative management. Management style manifests a strong authoritarian trend, driven by ideology that a person’s status is determined exclusively by their performance at work.
American managers have the responsibility of individual decisions. Traditionally, American managers focused on the distinction between the managerial and execution activities. This distinction was reinforced by the prejudice that managers represents and defends the interests of owners while remaining employees act against them.
Decision making is made exclusively by managers, and the nature of relations within American organizations is the type of authority-responsibility.
The low level of employee participation in decision-making has resulted in the formation of a centralized decision-making dominated by individual decisions. As a result, we can see within American enterprises a predominance of hierarchical structures with emphasis on high managerial positions specialized on the nature of the objectives pursued by the organization.
Tabel 1.- Model of human resources in America
Model of Human Resources Management
AMERICA
Economic Factors Low investment in training
Specialized training
Formalized evaluation
Institutional Factors The emphasis on hiring from the outside
Short-term use
Specialized careers
Educational Factors Explicit description of the job
Focus on contract
Group tasks
Source: E. Burdus ‘ International Management Compared, Ed. II, Editura Economica, 2004
The main agent of Informatico- management changes in American enterprises
North American companies, registered in the last decades a period of intense change. The decisive role in their realization is owned by the manager or general manager, who is the main agent of change in relation to changes in the organization, general manager can be one of the following ways:
‘ original initiator of the changes;
‘ fortified changes initiated by others when they are properly targeted;
Much of major changes in North American companies are produced closely related to the introduction, modernization or replacement of information elements.
If reference is made in particular to the major changes associated with the introduction of information technology (IT), it should be noted that each general manager has explicitly or implicitly a certain perception of the content and its usefulness. E. Schein has drawn up a very interesting and useful typology of managers, based on perceptions and assumptions about the applicability and usefulness of IT, entered in Table 2.
Tabel 2.- Typology of general managers, depending on the approach of IT
Current Number Type of Manager Brief presentation of its characteristics
0. 1. 2.
1. Utopian idealist ‘ detects only the benefits derived from the IT introduction in the company for organization and individual to themselves;
‘ it is possible to not see “these benefits in the current period”, but is convinced by them that they will be achieved over time.
2. Realistic utopians ‘ notifies the great potential benefits of IT, but it is doubtful that all will be able to be obtained due to hidden costs involved and resistance to certain people;
‘ charge also other sources of difficulties, which are not their own IT, but appear in the processes of its implementation.
3. The ambivalence ‘ perceives advantages and disadvantages in certain areas or potential difficulties in others and / or may be considers that can be superior benefits;
‘ he wants to move forward with the introduction of IT, but at the same time, maintain caution or fear.
4. The realist skeptic ‘ presents serious doubts about the short and long term benefits of TL;
‘ senses, simultaneously, the introduction of IT will mean an addition in the operation of the company;
‘ carefully controls everything is implemented to minimize the negative effects within the organization.
5. The utopian skeptic ‘ believes that the introduction of IT is primarily disadvantageous as “undermining” other effective management processes;
‘ considers that IT is not only costly to implement, but creates difficulties.
Relations between the 5 categories of managers expected, according to the probability results, are illustrated graphically in Figure 2.1.
Realistic utopians
Utopian idealist
The utopian skeptic
The realist skeptic
Figure 2.1.- Group general managers depending on position towards the introduction of IT (over E. Schein op. cit.)
An investigation based on case studies carried out on 84 US companies revealed that general managers most often – 55% – falling within realistic utopians, 23% are ambivalent, 20% utopian idealists and realists skeptical only 2%.
A key element that determines the extent and effectiveness of the organization change is represented by the power that general manager possess, defined as the ability to exercise the will within the company.
As the known American specialist John March pointed out on several years ago, the manager’s power is quatro dimensional. These dimensions are:
a) structural, reflecting the manager’s position in the company’s hierarchy;
b) property, which arises from manager’s actions within the company and a representative promoter of the interests of shareholders;
c) expert, which reflects the professional competence corresponding to business activities;
d) prestige, stemming from his personal qualities and social status, one which he has built.
Bringing together these four dimensions or facetes of power at a high level by a general manager, gives a greater capacity to change. As professor Sidney Finkelstein shows, not in few companies, general managers resort to the establishment of the dominant coalition to succeed ample and effective changes. Such a coalition brings together all or a large part of senior managers in the firm.
The predominance of pyramidal organizational structures in US companies
Defining for their organizational structures is predominantly vertical structure, in terms of priority hierarchical elements. There are used several types of hierarchical structures shown in Figure 2.2.
Figure 2.2.- Types of organizational structures used in US companies
a) Structure of domains or functions, typically used in enterprises which manufactures a single product or a family of products. In the forehead is one manager, bearing various names – Executive Chairman, CEO etc. In his directly subordinate are several departments, each specialized in a field, most commonly they are profiled on production, finance, marketing, sales and personnel.
b) The organizational structure of the product, used in companies that manufacture several families or groups of products. It is organized for each product or product family, a department or a factory managed by a general manager, under which suborder these are, and functional compartments by domains. At the level of entire enterprise is its leader, to which they are subordinates the general managers of departments and component factories.
c) Geographical organizational structure is used in manufacturing enterprises which performs also the product distribution or in large commercial companies. Most commonly, their work is structured on production and commercial divisions in charge of a given market. Typical for large companies in the US is creating divisions for eastern, western, central and southern markets.
d) Matrix type organizational structure is employed especially in companies which promote technical progress and which are calling to realization of projects. In addition to classic compartments specialized in different areas are organized projects. A project is a group of people tasked to handle the generation of a product or technologies. Each project is led by a leader. Each member of the team that realizes the project is subordinate to co-project leader and to head of the department’s seniority part. The advantage of this type of organization is to facilitate coordination of simultaneous conduct of two categories of activities: current and renewal of production and technology. The disadvantages appear on the communication plan, control, etc.
e) Network-type organizational structure was shaped in the past decade, has characteristic the creation of an stand alone enterprise which dealing with supply of a product or service for some customers. This enterprise does not performing functions of production or trade. Its task is to harmonize the contributions of several companies to satisfy certain customers’ orders. The focus is on his “public relations”, the means of action are telephone, fax, photocopier, writing materials, organizing business meetings etc.
f) The organizational structure of the family is traditional, being used in small businesses. The owner is the manager of the organization, to which are directly subordinates some employees. Its leadership has a highly informal character.
Integrated management of production, element of American management
Integrated management of production (MIP) brings together three managerial approaches of production activities- advanced processing technology, real-time inventory management and total quality management (TQM) (Figure 2.3).
Figure 2.3.- Integrated production mechanism
Advanced processing technology is to achieve productive activities based on a computerized basis. North American practice shows that appeal to a variety of computer technology such as computer-aided processing and planning processes.
Real-time inventory management (“just-in-time” JIT), taken from the Japanese, provides a substantial reduction of storage time and supply and costs associated. In the context of the MIP, JIT requires simplification of products by reducing the number of components, grouping products by families, thorough maintenance operations of the machine.
Total quality management (TQM) is based on the following principles:
‘ running well from the beginning every element of production;
‘ continually refining elements involved;
‘ meet customer needs.
The three elements are integrated, each contributing substantially to the achievement of the following effects:
‘ JIT eliminates buffer stocks from production stages;
‘ TQM generates savings by eliminating the need for checks and subsequent, finishing phase of production;
‘ advanced technology facilitates rapid and complete circulation and use of information between and within the production phases.
Case Study- Gneral Motors
General Motors Corporation (GM) was founded on September 16, 1908, in Flint, Michigan and is the largest automaker of the world. This company was, for 76 years, the global industry leader in automotive sales. The largest national market of General Motors Corporation is in USA, followed by China, Canada, the United Kingdom, and Germany. Nowadays, GM has 284,000 employs from entire world. Its global headquarters is located in Detroit, but GM manufactures cars and trucks in another 33 different countries.
General Motors sold 9.1 million cars and trucks on world market in 2006. This cars was sold under the brands GM Daewoo, Cadillac, Hummer, Chevrolet, Pontiac, Opel, etc. This company promoted partnerships with many automobile manufacturers from entire world.
Currently, GM is the major shareholder of GM Daewoo Auto & Technology Co. from South Korea and sells its parts and accessories under GM, GM Performance Parts, GM Good, and ACDelco brands GM Service and Parts Operations. In this way they supplies parts and accessories for GM dealerships and distributors from entire world.
Business Industry ‘ Automotive
General business activity and principal products or their commercials are categorized, for General Motors, as being part of the Automotive Industry.
The advertising slogan of General Motors is “People in motion”:
Products
‘ Diesel Engines;
‘ Marine Equipment ;
‘ Stationary and Industrial.
Services
‘ Locomotive Maintenance and Management;
‘ Leasing;
‘ Training;
‘ Welding.
Vision Statement
‘General motor’s vision is to be the world leader in transportation products and related services. We aim to earn our customer’s enthusiasm through continuous improvement driven by the integrity, teamwork and innovation of general motor people.’
Mission Statement
‘General motor is a multinational corporation engaged in socially responsible operation, worldwide. It is dedicated to provide product and services of such quality that our customer will receive superior value while our employee and business partner will share in our success and our share holder will receive a sustained superior return on their investment.’
Objectives
‘ First of all Safety and Quality
‘ Create Lifelong Customer
‘ Deliver Long-Term Investment Value
‘ Innovate
‘ Make a Positive Difference
GM Goals
In order to achieve their goals, GM has the following formula for success:
‘ To achieve sustained success and long-term results, move faster and take risks;
‘ Use advanced technologies to create best vehicles from the world;
‘ Create quality products and vehicles;
‘ Employees with more responsibility and authority;
‘ Create positive long-term relations with customers, dealers, communities, union partners and suppliers.
Company Values of GM
General Motors has six fundamental values which are used to perform daily business practices (General Motors, 2008c). This fundamental values consist in:
‘ Continuous Improvement;
‘ Customers Enthusiasm;
‘ Innovation;
‘ Teamwork;
‘ Individual Respect;
‘ Responsibility.
With this fundamental values GM should satisfy their customers and have a green thinking. Green thinking refers to company’s concern for environment.
GM TEAM
The General Motors team shares a passion to satisfy customers and competitive spirit which conduct us to excellence. This company welcomes fresh perspectives and varied experiences by their culture which represent diversity, inclusion, mutual respect, responsibility and understanding. Their 284,000 employees work in 396 facilities from the world, speak more than 50 languages and are situated in 23 different time zones. GM has 21,000 dealers in communities from entire world, which are also important members of their team, and they represent a part of their success.
GM Brand
General Motors’ dynamic brands offer a large range of vehicles in over 120 countries from entire world. GM offer contain from electric and mini cars to heavy-duty trucks, monocabs and convertibles. This company have significant participations in mixt major societies from China like SAIC-GM, SAIC-GM-Wuling, and their vehicles under the following brands: FAW-GM and GM Korea.
GM Technologies
General Motors continues to develop innovative technologies to change the future of automotive industry. This is achieved by their expansion as leadership in vehicle electrification with development of new technologies concerning batteries, electric motors and power controls. The General Motors team working also on a range of high-volume, variable valve timing, fuel-saving technologies including direct injection, six-speed transmissions, turbo-charging, diesel engines, and improved aerodynamic designs.
GM MANAGEMENT
Almost all American companies hold to the belief that the internal strength of a firm may be indicated by the distinctive competency of a strong general management. Over the years we saw or hear of various movements of executive chiefs or business headlines from one corporation to other. We hear of general managers who lead corporations to next level of competitiveness in the market place. Management is not the only source of strength or weakness, but for sure he play an important role in this direction. Many other internal activities or forces can lead to a company’s success, but a good leadership is the best starting point.
GM Production
General Motors focused efforts in the design and operations of manufacturing systems through coordinated activities in three main areas:
‘ Developing algorithms for performance estimation, bottlenecks identification, and optimization of buffer allocation;
‘ Installing real-time data-collection systems to support the algorithms;
‘ Establishing of some common processes for opportunities identification and implementation performance improvement.
Through these activities, General Motors quantified throughput performance, has increased revenue and saved more than $2.1 billion in over 30 vehicle plants from 10 countries.
Japan
Analysis of human resources in Japanese firms is necessary to be done in terms of economic, institutional and educational factors :
‘ In terms of economic must be emphasized the influence of investment in personal training on economic growth and organization’s revenue. In this context, the question is “Who gains from the investment in staff training’?: the undertaking making the investment or those who benefit from it. The motivation to invest in training employees lies in their use for a longer period of time within the organization and the economic benefits embodied in high labor productivity and low costs.
‘ Institutional factors can be internal (regulations governing relations between employees and management of the company, company policies on preparing employees) or external (supply and demand of labor market).
‘ Educational factors concerns relations among posts, personal characteristics and experience. It is estimated that an essential role in Japan imposing for global competition returned to the Japanese education system; currently it is estimated that 90% of the active population graduated from high school, and 60% of the workforce in the Japanese economy has completed a university college.
Tabel 2.- Model of human resouces in Japan
Model of Human Resources Management
JAPAN
Economic Factors Large investments in training
Generalists preparation
Informal evaluation
Institutional Factors The emphasis on staff training inside
Long-term use
Generalists
Educational Factors Job enrichment
Emphasis on integration
Group work
Source: E. Burdus ‘ International Management Compared, Ed. II, Editura Economica, 2004
There are certain characteristics of human resource management in Japanese companies :
1) A first feature relates to the fact that since the period when Japan was less industrialized it has realized a certain structure of employment by level of training.
2) Lifetime employment, which influence relations between employees and enterprise, it is another feature with profound implications both socially and economically. However, it entails specific differences in company size and by gender; lifetime employment is practiced only by large companies, which have a large enough economic power to support this type of system. Women are not included in the system of lifelong employment, it being exclusively applied to a portion of the male workforce, that which represents the elite company, namely the highly qualified people (25 – 40% of total number of employees).
3) In Japanese firms workforce is considered like any other resource, therefore investment in personnel training are considered long-term investments. Reduced mobility in the context of Japanese staff and, implicitly, its use for a long period in enterprises enables a better correlation with the level of seniority pay.
4) Another specific HRM Japanese businesses is that staff use does not enter in conflict with the use of technology, meaning that resorting to technologies not pose a threat to dismiss employees.
Japanese methods / techniques in human resource management
One of the most popular and discussed peculiarities of human resource management in Japanese companies is the lifetime employment, practiced only in large companies for staff which represents the elite company. But this practice has also disadvantages, due to the fact that it does not stimulate better staff training, those in cases of restriction of activity, wages are a factor burdening production costs.
Inflexible structure of the staff (employees) of Japanese companies can be presented as follows:
Figure 2.2.- Personnel structure of a Japanese company
Among various methods / techniques that Japanese companies resort, the integration of new employees, as well as to training the existing employees, are mentioned:
1) Recruiting new employees in Japanese companies is done every year in April, but their preparation for integration in the enterprise begins six months before deciding the employment decision is proper. Visits to the enterprise is one of the ways used, which involves organizing informal meetings with CEOs, meetings which present the company’s products, organizational structure and other elements that realize the knowledge of future jobs.
2) At the hiring of future employees is made a ceremony where CEOs recite a speech, held meetings with trade union representatives, are presented a series of requirements for the training program, social or sporting activities offered by company etc.
3) The preparation process within the Japanese company includes an orientation program for one or two weeks. Some large companies, such as Sony, Hitachi and Kawasaki Steel, prolong the period of training at one or even six months.
4) The rotation of posts: represents a practice commonly used in Japanese companies and it is oriented towards gaining knowledge from different fields that are not related to the employee’s workplace. Within this technique, Japanese companies usually resort to periodic rotation of posts; this procedure has an annual cyclicity. For example, a technical framework of a manufacturing company will evolve successively:
‘ assembly: 1.5 years;
‘ polishing: 3 years;
‘ quality control: 2 years;
‘ manufacturing: 4 years;
‘ sales: 2 years.
5) ZEN meditations type is another specific way which aims to develop lifestyles employees in the organization. Some businesses organize clubs for training in self-defense (martial arts); physical strength and joint work on future managers are developed through specific programs.
6) For those newly employed, Some Japanese companies resort to unusual methods to integrate in a team:
‘ they are sent in group to centers or home of company from mountain areas where will be put to make physical works ; they are sent to farms to provide free help; thus is strengthened the team spirit and support to overcome some difficulties together; is ensured formation of personal relationships between members etc.
‘ they are sent in group in an isolated area where they will stay for a week in tents;
‘ they are put to perform 26 miles group marches for physical effort and team spirit.
7) In almost all Japanese companies, employees are required to take certain journals to record their entire training, which will constitute individual career development plans;
8) In Japanese companies there are many situations in which young employees do not comply with the discipline and rules imposed, which leads to weaker results in terms of performance. In such situations, in Japanese companies is practiced the separation of that person by giving a desk near the window (mago giwa zoku), which means a blame for the person that recorded poor results, but cannot be fired.
Salaries in Japanese companies is closely linked to seniority, level of wage varying direct proportional to seniority, so the retirement salary is several times higher than employment salary.
Japanese firms hiring decision lies with the Head / Director of HRM and not to supervisors. Standard procedure to recruit new employees in Japanese companies:
‘ personality tests;
‘ specialty tests;
‘ English language tests;
‘ interview;
‘ investigating past and social situation of the candidate.
Title and features in Japanese management
Table 3 shows the levels of the main headings used in the management of Japanese companies.
Table 3.- Levels of the main headings used in the management of Japanese companies
Hierarchical level Terminology Significance
Superior Management Keiei Heads
Medium Management Kannsha
Bucho
Kacho Cadre medii
Director of departament
Head of department
Junior Management Kakaricho
Daichisen kantokusha
Shokucho
Hancho
Unhasekininsha Head of service
Head office
Handmade
Head of group
Foreman
E. Burdu’?? Management Compared, Editura Economica, pag.152
Preparing for these positions depends on the type of business and its size. According to a study conducted by I. Gow, between the main features of Japanese managers include:
‘ especially in the large enterprises that applies lifetime employment, promoting managers is made from inside;
‘ most managers from Japanese large enterprises have an university degree that allows an ascent to the top of the hierarchy; there are managers who do not have the required diploma, but whose ascent is slower. A post of manager in Japanese enterprises does not depend more on the number of degrees that a person has, how much depends on membership of that undertaking; in the last period, a large number of Japanese aim to obtain an MBA abroad;
‘ up the level of head of department, managers from Japanese companies are part of the union at the level of that company;
‘ promoting managers in Japanese companies is made based on seniority and a lengthy evaluation of their work, so that each superior becomes older than his subordinates.
Japanese managers training
As the company will invest more in training system of personnel and managers, the more will be higher. The level of expenditure allocated for training is quite difficult to be determined because Japanese firms practice simultaneously two major forms of training:
a) Training at work
Whether they are university graduates or not, Japanese firms employees are trained to work together with posts rotation; Japanese companies pay attention to the organization of these programs at the workplace; they are based on the principle that “one who knows teaches the one who does not know”.
OJT trainer in the system is not necessarily superior to those who are preparing, but one that was prepared in the same system or participant in courses organized by Japanese Association of Management (JMA), or Japanese Association of Administrative Management (NOMA); training at the workplace, includes the following objectives:
‘ preparation of competent generalists;
‘ increased information processing capacity in different areas;
‘ acquisition of multiple skills;
‘ developing the ability to work in teams;
‘ screening activities in which staff performed the highest productivity;
‘ appreciation of colleagues from different departments;
‘ ensuring harmony within the enterprise.
b) Training outside workplace
This method of training is based on concern an individual to acquire knowledge or additional skills or encouraged by the company.
Training and promotion of middle managers outside workplace is based on mainly two methods:
‘ encouraging follow training cycles outside the enterprise, of some correspondence courses or internships organized by the company;
‘ management by objectives which aims a self-evaluation.
For the preparation outside the enterprise, Japanese companies send their managers to specialized institutes in the country or abroad to acquire knowledge in various fields, which from terms of importance it ranks as follows:
1. Staff behavior abroad;
2. Strategy, planning, management of the enterprise;
3. The management staff, of the organization;
4. Industrial relations;
5. Bottom-up initiative;
6. Training and forming subordinates;
7. Identify and resolve problems;
8. Ability to communicate;
9. Creativity, development;
10. New technologies;
11. The acquisition and development of skills;
12. Sales management;
13. Management accounting;
14. Office automation and IT;
15. Company image.
In Japan, practically is not a managers’school over Harvard model, the only school that grants MBA is the School of Commerce Keio, which in two years allows their students to obtain such a diploma.
Structural Organization of Japanese firms
Japanese firms’ organizational model is the village, with the dominant values such as consensus, harmony, which led to specific practices (lifetime employment, making decisions by consensus which involves consultation etc.).
From a formal standpoint, the most common types of organizational structures found in Japanese firms are:
‘ functional organizational structures;
‘ divisional organizational structures (separate profit centers);
By comparison with Western mode of organization, in the Japanese firms we find specific issues:
‘ there is a permanent connection between top management and organizational base of the pyramid and the number of hierarchical levels is lower, maximum levels on large corporations is 5-6;
‘ effectiveness of the organizational structures derives from: operating on the informal basis, encourage “bottom” levels of the pyramid, the delegation of tasks and competencies at the level of application etc.
‘ the average level of management has a decisive role in balancing the tendency to centralize power in the organization with the need to involve all members in achieving the objectives.
Although Japanese companies have borrowed many structural organizational principles of American management, these principles have been adapted to Japanese cultural specificity. As W.G.Ouchi appreciates, this structural organization reveals a higher degree of cohesion and discipline, with the purpose to reduce the differences between individual and group goals.
Case Study- Toyota
Toyota Motor Corporation is a multinational company that produces cars, trucks, buses and robots, with headquarters in Toyota City, Japan. The company was founded by Kiichiro Toyoda in 1937, the successor of the company Toyota Industries founded by his father.
Complimentary activities:
‘ car production;
‘ building robots;
‘ financial services offered by Toyota Division.
Financial servicies:
‘ biotechnology.
Production with financial division forms Toyota group.
The number of employees in the company is around 316 thousand worldwide.
Toyota is the largest automobile manufacturer in the world with sales of over 8.4 million vehicles in 2010. Toyota is one of the three major Asian car producers, American manufacturers competing on the world market, the other two being Nissan Motors and Honda Motor. Toyota owns 522 subsidiaries worldwide. It has production and assembly plants in 26 countries.
In 2007 Toyota was affected by the economic crisis, its sales in first quarter
falling by 27% globally. Because of this, it was forced to take a government loan to overcome this bad period.
Toyota’s management principles:
The Toyota Way represents the philosophy and principles that guide the company’s
activities. There are 14 principles divided into 4 sections:
‘ The first section relates to a long-term vision and includes the first principle:
1. Base your long-term management decisions even with unfavorable short-term financial costs.
‘ The second section refers to the idea that a fair trial will bring positive results and are based on following principles:
2. Create an ongoing process of bringing the issues to the surface. Work processes are refined to eliminate losses through continuous improvement process.
3. Use pull systems (shoot) to avoid overproduction. Pull system only produces material for the next process when it needs it. This method is needed to eliminate overproduction.
4. Keep at a level equal the volume of duties. (work like a turtle and not a rabbit).
5. Building a culture of prevention to remedy the problems so as to obtain the best quality product in the first instance.
6. Standardized tasks and processes are the foundations for continuous improvement and employee empowerment increase.
7. Use visual control so that there are no hidden problems.
8. Use only reliable thoroughly tested technology that serves employees and processes within the company.
‘ Section 3 refers to adding value to the organization by developing, improving employee and includes the following principles:
9. Grow leaders who thoroughly understand the work, live in the philosophy of the company and teach others also.
10. Forming teams with trained employees to meet company philosophy. Teams must consist of 4-5 employees for various levels of management.
11. Respect extensive network of suppliers and partners through challenges and by means of improving them. Toyota treats suppliers in the same way it treats its own employees wishing them to improve their performance.
‘ Section 4 relates to the continuing solving and treatment of organization problem which lead to a beneficial organizational knowledge and experience. It includes the following principles:
12. Go and see for yourself to understand the situation. Managers who have a clear vision of the situation will not improve.
13. Decisions are taken by consensus considering all possible options and the implementation of decisions to be made quickly and efficiently.
14. The continuous development of the organization through a continuous learning and improvement. This process involves criticism of lifelong learning in order to avoid the mistakes made in the future.
The company Toyota was the first company in the world which adopted the JIT philosophy in its production system. This method refers mainly to eliminate waste in the production process. The general idea is to reduce drastically JIT inventory and unused connection time in the production process. Therefore is obtained a continuous stream of small consignments of goods throughout the production process. This method is effective especially in enterprises whose production process is repetitive as is the case of Toyota.
Toyota Company Objective
‘ Enhancing customer’s satisfaction by providing high quality services at low prices.
‘ An aggressive customers satisfaction program from showroom to parts and workshop to encourage customer relationships;
‘ Maintaining Toyota market share on Yemeni market;
‘ To service the Nation and the up liftmen of society;
‘ Ethical approach towards customers and foster the need of the customers.
Europe
Defining features of management in Germany, France and UK
The functionality and performance of an enterprise depends largely of overall configuration of his managerial system.
A large number of British companies take the form of holding companies, their branches being usually specialized on product. The degree of decentralization of management activities is appreciable, at holding management level operating a managerial apparatus consists of a small number of people that charge, in particular, of overall policy and financial control.
German firms are most often organized into divisions or functions. The degree of centralization of decisions is high. The organizational structure is predominantly horizontal, formalization and bureaucratization default being significantly lower than in France or UK firms. Major decisions are adopted usually participatory by the managerial team which takes the form of managerial board.
In France, companies are structured, most commonly, on functions showing a high degree of formalization. Decision-making processes are centralized, resorting for this purpose, to a significant number of specialists and officials. For French management, is used the epithet ‘bureaucratic’, whose main support is highly developed hierarchy, organizational structures being composed of many hierarchical levels. Such a heavy management system faces many communication problems that affect staff morale.
The main similarities and differences of the three management systems are illustrated in Table 4.
Table 4. – Features of the management structure
Current Number
Features
The intensity of the event
Low Medium High
1. 2. 3.
1.
2.
3.
4.
5.
6.
7. Hierarchy length
Functional differentiation
Share managerial staff – total administrative staff
Hierarchical share at the level of team leaders
Administrative and commercial staff
Managerial Authority towards the workers
Managerial Authority towards functional staff G
G
G
G
G
UK
UK UK
UK
UK
UK
UK
G
F F
F
F
F
F
F
G
G= Germany; UK- United Kingdom; F= France
Source: Chris Lane, op.cit., pag. 51
Participatory management and decision making
In Germany, participatory management is based on codetermination (leitbestimming) or co-participation decision in addressing workers problems that is of major interest to them. Codetermination can be done at two levels:
‘ by setting up labor councils at the production department (workshop, section); currently more than 10 million workers are represented in these bodies;
‘ by inclusion of workers’ representatives in the supervisory board and, more rarely, however, in the management board, where shareholders decide.
German participatory management, founded on codetermination takes two forms. In small private companies up to 500 employees- workers are represented by a single management body (supervisory board). In public and/or private large companies, employees can be represented in two management bodies.
In France, participatory management of institutional type is somewhat less developed. Most French companies have an Administrative Council consisting of 3- 12 directors, headed by a chairperson- General Director (PDG) chosen by them. In large companies occurs a separation of functions- President directs the Administrative Council, and for the current management is appointed a general director. In large enterprises are established a Supervisory Council.
Employees constitute, in a part of enterprises, workers committees and they have representatives, usually 2, in Supervisory Council or when these are not, in Administrative Council. The nationalized enterprises are set up tripartite bodies with 1/3 government representatives, employees and managers.
In UK, at top management level, participatory forms are not very clearly defined. In contrast to Germany and France, is practiced only one participatory body system- Managerial Council. Consisting of both directors and representatives of the shareholders, this council is the principal formal decision-making body of the company. The employees have no representatives in the Management Council. Frequently, the chairman is the chief executive of the company.
Figure no. 2.3.- Typical organizational configurations of firms
Control’s content and enforcement procedures
In French companies, management control is characterized by: high degree of centralization at the enterprise level, where there is a relatively large staff, dealing with prediction and control. Frequently, general manager maintains overall control in his hands, delegating very few. French managers do not believe in cybernetics vision of control, considering that it is impossible to prevent subordinates’ errors. They resort to widespread control procedures, not using them always in a systematic way. Control is exercised primarily on production activities, followed by financial ones. Also, considerable attention is granted to control marketing activity.
Current
Number Type of strategy Characteristics
0. 1. 2.
1. Centralized control staff ‘ adoption of centralized decision;
‘ direct supervision;
‘ personal leadership, based on the property, “charisma” or technical competence;
‘ rewards and sanctions strengthens the managers’ personal authority.
2. Bureaucratic control ‘ splitting activities in tasks easy to define and execute;
‘ methods, procedures and formalized rules specially for managing task execution;
‘ accounting controls on predetermined cost elements and budgetary provisions;
‘ technology designed to limit variations in the running tasks, considering the rhythm of operation and other characteristics of equipment;
‘ delegation of tasks routine specifying strict limits competent;
‘ system of rewards and sanctions, strengthen compliance with the established rules and procedures
3. Controlling results ‘ compartments and posts designated to respond to the achievement of outputs;
‘ specifying standards and tasks to be performed;
‘ the use of “accounting responsibilities” system;
‘ semi-autonomous, operational nature adopting decisions disruption;
‘ rewards and penalties related to obtaining planned results
4. Cultural control ‘ building a strong identifications with management goals;
‘ semi-autonomous work groups which are under a reduced formal control;
‘ intense concern for the selection, training and staff development;
‘ rewards guided by professional progress.
Source: John Child, op., cit., pag. 189.
German system control is characterized by a high degree of centralization (as well as planning) using a considerable body of experts and officials. For production departments is used a decentralized approach, based on the establishment of precise control responsibilities in sections and workshops. In the German management control there is a combination of two control strategies: focused on results (focused on cost centers) and cultural.
In British companies, bureaucratic control strategy is dominant, contributing decisively to shaping managerial activities. Planning and financial control are concentrated at the upper echelon of management. The other control elements are decentralized. In the view of senior management, control is more a guidance tool and early warning of any malfunction.
A rigorous control of operational type is not expected, which is reflected in the content and use of control procedures.
Motivating staff in Germany, France and UK
Germany’s top managers pay particular attention to intrinsic motivations, namely those moral. Extrinsic incentives received are at a higher level compared to France and Britain. It is widespread the practice of granting high bonuses.
On the lower hierarchical levels, German managers use a wide range of motivations. The basis of their grant consists of skill level, experience and performance. For the latest are granted merit bonuses, taking into account evaluation results, which, in Germany, shows a high degree of transparency. In the determination and evaluation systems, workers’ councils participate substantially.
In France, top managers, as in Germany, appreciate very much the intrinsic motivations. They receive substantial bonuses, slightly lower than in Germany, as absolute size, but with the same or even higher purchasing power. At lower levels of the hierarchy, in France is used the most differential income system, differences between skilled and unskilled workers’ incomes being highest. Considerable attention is given to loyalty and obedience, which are rewarded with considerable premiums and promotions in supervisory management positions.
Motivation approach is quite different in UK. Top managers tend to assess job satisfaction occupied in a greater extent in extrinsic terms, so depending on the additional income of their wages and promotions that they benefit. British top managers’ wages are lower in recent years. On the background located in the EU integration, occurs a tendency toward accelerated growth of British managers’ wages. The size and frequency of bonuses use in British enterprises are significantly lower than in Germany. The differences between skilled and unskilled workers are reduced, and the income between skilled workers at different levels is practically not so different. In this case, a major contribution had the powerful union of semi-skilled workers.
Leadership and organization approach
One of the managerial elements that receive attention increasingly larger in recent years is leadership. Leadership consists, in essence, in their effective ability to influence, mainly through interpersonal relationships, subordinates and collaborators to achieve certain goals or activities. By individualistic leadership are characterized most of the French managers. This individualism occurs on the basis of medium organization regarding his organic systematic character.
For German managers is characteristic a leadership with a strong individual dimension, but at a sensitive lower level than in France. Leadership manifestation is realized, but in the background of systematic organization.
British managers’ characteristics are slightly different. In terms of leadership, it has a clear group size. As an approach to the organization there is a balancing of organic issues with those systematic, as in France.
Managers and leadership style in Germany, France and UK
German managers have strengths competence in specialty and coordination skills. More than managers from other countries, they believe, that to achieve managerial success, creativity is essential. It is believed that you cannot be a successful manager if the qualities, knowledge, skills and individual behaviors do not reach the required parameters of complex and difficult managerial work. Typical approach of German manager is characterized by rationality. The company is treated as a coordinated network by people who, based on
competence and knowledge available, adopt and implement rational decisions.
In terms of origin, German managers, unlike their French and British counterparts, come from all social stratums. The majority are university graduates, the largest group obtaining degree from universities, followed by those who have completed a higher education institute in technically and economically fields. German companies pay great attention to individual qualities, especially of leadership and professional competence in the base (technical, economic etc).
British managers are presented slightly differently. Specific to them are the emphasis on interpersonal skills, the ability to influence others and to negotiate effectively. British managers address the organization as a network of inter-relationships, which performs actions based on reciprocal influence resulting from communication and negotiations.
British managers, especially those in the upper echelon, British managers, especially those in the upper echelon, come largely from top social stratums. The elitist school system that they have, young people are trained to become future managers. As saying Lane, British managers compared to those continental, appear as under-trained, in their work replacing pragmatism with professionalism.
French managers consider as essential, organizational skills and control. The organization is approached as a hierarchical network, where the power to organize and control stems from the hierarchical position of manager. At the same time treat the organization like a pyramid with multiple power levels which must be contacted and used. For successful managerial work is considered essential the ability to effectively manage power relations and work within a system.
French managers’ situation, in social terms, is similar to that of British managers. Young people, especially from the upper social stratums, “Grandes Ecoles” graduates, form an intellectual elite from which are recruited mostly of senior managers.
Case Study- Volkswagen
Volkswagen is a company building cars and SUVs from Wolfsburg, Germany. Volkswagen word means “popular vehicle”, Volkswagen being recommended by the Nazi regime as a car that any German citizen can buy it. The company VW has the motto “Aus Liebe zum Automobil” (“Out of love for the car”). The company and at the same time the brand VW, belongs today to Volkswagen Group (Volkswagen AG). It is the fourth largest group of automobile manufacturers in the world after GM, Toyota and Ford.
In 2010, Volkswagen grew deliveries by 13.7% to 7.14 million cars and SUVs, a record level in the group’s history. Des Deutschen Gesellschaft zur Vorbereitung Volkswagen mbH company (“Preparatory Society of Volkswagen’s German limited liability”) was founded on 28 May 1937 at the will of Adolf Hitler.
The thinking and action of German managers Volkswagen shape was influenced by a series of papers developed by German economists, Schmalenbach, Nicklishssi Rieger, who defined some guidelines of economic nature:
‘ development and establishment of those areas of business activity that are of major importance for maintaining business;
‘ correlation with company strategy structural organization and organizational culture, in order to establish the level of managerial efficiency of the change process that must be done;
‘ ensuring correlation of interests and control processes for obtaining value added.
Volkswagen’s Manager in all its activities, focus on quality, promoting innovative- creative processes and reducing costs drastically.
The responsibility lies with the planning of the organization’s top management, but employees from the middle and top line are involved in the process. Market studies and analyzes are used as a starting point in planning, plus German intuition and common sense.
Due to the high degree of uncertainty avoidance, characterizing Volkswagen and companies from Germany, uncertainty, ambiguity and risk that cannot be quantified, are barely tolerated by company’s employees.
The Volkswagen Company in terms of organization, frequently meet functional and divisional structures, within which the delegation is less used and specialization is found until the senior management.
Fundamentals of German management model:
‘ participatory Management is based on codetermination;
‘ promoting competence and management based on results;
‘ treasuring discipline, diligence and creativity of employees;
‘ correct human relationships and ensuring social welfare.
In the Volkswagen Company, relationships between employees are not family but strictly professional. The contract of employment is not a long period of time, Labor Code in the European type management impose a retirement age, which is 65 years men and 63 years women.