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47555781 Culture Study of MNC s

47555781 Culture Study of MNC s

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ANALYSIS OF TOYOTA AND GENERAL MOTORS

INDIVIDUAL PROJECT
SUBMITTED TO: SIR COL (R) MANZOOR IQBAL AWAN SUBMITTED BY: Ahsan Naeem Sethi BBA-7-B 01-111072-018

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These matters are also embedded in Japanese management where you find a tough hierarchical and collectivistic organization. To include important values of the traditions that are visiting into your own ways of doing things is the key for successful cooperation across cultures. The respect for tradition and long-term commitment also stands strong in the Japanese society.Abstract: The focus of this study will be on the management style in Japan (Toyota) compared to his competitor America (General Motors). The most dominant features of the Japanese society on the management styles are the male dominant and collectivism. The most imperative thing in the opportunity for any organization is to be able to motivate. Japan is also a highly collectivistic country and constancy to your group is very important. America is highly based on individual commitment. control and enable others to be successful in an organization. The value for belief and short term promises are also a strong factor in American society. Page 2 . how these forms definitely differ due to the different backgrounds from which they developed and how the two companies Toyota and General Motors¶ differ in management style from their home country and in Host countries. The most important features of the American society on the management styles are the individualism and the gender equality.

Cultural differences between America and Japan reveal some significant differences. These factors can affect the business environment of the globalized companies. Two companies are working on the concept of globalization and also investing in other companies. Page 3 . and is centralized and the GM is decentralized. most notably between the individualism in America and collectivism in Japan. with a goal to be the world¶s best auto manufacturer ahead of General Motors (GM). A brief examination of Toyota¶s competitors and industry trends reveals that Toyota¶s recent growth has not been shared by its three American rivals GM. Toyota has reached a global market share of 10%. by achieving 15%. The two companies include Toyota and General Motors. The basic idea of the study is to observe the difference between two companies one from Japan and other from America. The major factors among globalized organizations are cultural differences. Toyota uses a geographic-area global structure. Both the companies are from the auto mobile sector.Introduction International business competition and globalization brings a lot of competition among the globalized companies. Organizations before going to global market are that they must understand the culture of the other country where they want to start their operations and become successful. and that any trouble for the oil industry in turn spells trouble for the car industry. Ford and Chrysler.

is a multinational corporation headquartered in Japan. Venezuela. Toyota has factories in most parts of the world. the Philippines. p 79). South Africa. India. because of its presence in every continent. TMC is the world's largest automobile manufacturer by sales and production. Australia. Czech Republic.808). Argentina. Mexico. Thailand. Malaysia. China. and more recently. Sri Lanka. Toyota is the perfect example of the multinational company. High context (Japan): Toyota is dealing in high context culture. Brazil. 1976.Toyota History: Toyota Motor Corporation. Vietnam. Toyota Motor Corporation employed 71. Colombia. Japan and America: This topic will include the management style of Toyota in Japan and America and how Geert Hofstede¶s model applies. Canada. Turkey. Pakistan. Portugal. with the employee from every culture and regions. the United Kingdom. We can say that Toyota is operative in highcontext culture this means that people working in the organization give importance to every information around the message that has to be delivered. They listen to every single person suggestion and then make a best decision after listening to the suggestions of every one. Indonesia. commonly known simply as Toyota and abbreviated as TMC.116 people worldwide (total Toyota 320. manufacturing or assembling vehicles for local markets. Egypt. In 2009. explicit. France. the United States. Poland. while very little is in the coded. In high-context systems people expect from their interlocutor that he or she knows what the message Page 4 . and Russia. High-context means that ³most of the information is either in the physical context or initialized in the person. Toyota has manufacturing or assembly plants in Japan.´ (Hall. transmitted part of the message.

A). We will check each dimension according to the management style of Toyota in Japan and America.of the communication was. This can be done without that it was specifically told Japanese. having great emphasis on individual decision making and seeking positive outcomes for the individual or family. 2003 Page 5 . They place great importance on ambience. Japan is also below W. Japanese people tend to be reserved which is considered as active behavior in collectivistic cultures. Chinese and French use a high-context communication. Equally.A for individualism. Geert Hofstede¶s value dimensions for America and Japan are as follows: 1 There are great contrasts and the occasional similarity when analyzing the two nation cultures (Japan and America). having a collective culture. preferring group work and group decision making. seeking the best group outcomes (Bond. They first need to build up an interpersonal relationship ± a foundation where it is possible to find the right level of context. 1986). On the Power Difference Index (PDI) both Japan and America are below the world average (W. decorum. the relative status of the participants in a communication and the manner of massage¶s delivery. The five dimensions: These are five dimensions from Geert Hofstede¶s model. 1 Geert Hofstede. America is ranked the highest in the world for individualism. Geert Hofstede¶s value dimensions show America is less accepting of power inequality than Japan.

in comparison America has an affective culture. Both have a high time sensitivity (91% and 85%). and Page 6 . the main difference between Japanese and American culture is Long Term Orientation. being a diffuse-orientated society. but on their background. as opposed to America¶s direct (low context). friendship comes before the contract. setting long term goals for long term rewards. prefer to separate their work and private life. the differences in negotiating culture between Japan and America showed in study some surprising results. comparing to America who prefer short term planning. compared with America where emphasis is placed on individual achievement. However. as it applies one standard. placing more emphasis on contracts. success and money. Finally. in contrast to Japan who prefers rules or regulations and less informality. Differences in the negotiating cultures include Japan¶s indirect (high context) communication. Using a select few of Trompenaars¶s Value Dimensions further show the differences between the American and Japanese cultures. with body contact and emotional expression the norm. Furthermore. rewards and goals. being less dependent on rules or regulations and happy to make their own decisions. Yet another significant contrast between Japan and America can be seen with Uncertainty Avoidance. Japan is a neutral culture. aiming for advancement. Japan and America (55% and 54%) both consider the ultimate goal of negotiation to be a contract. and believe in top-down agreement building (45%and 47%). America is also known to be universalistic. America is said to be a specific-orientated culture. Japan prefers to plan well ahead. Japan is also known as an ascription society where people are rewarded not on individual task.According to Hofstede¶s study Japan is considered to be a masculine society in comparison to Americans who have a relaxed lifestyle and show concern for others. whereas in Japan the two are linked. Japan is a male dominated society with work taking priority over personal life or families. In contrast Japan is a particularistic as they are based on relationships and interpersonal trust. Japan¶s belief in win-win negotiation conflicts with America¶s emphasis on win-lose. Americans prefer to take risks. showing little emotion in business discussions.

which leads to Minimum power distance and everyone feels equal importance in the organization. Long-Term Orientation: 2 http://www. Uncertainty Avoidance Index: Uncertainty avoidance in Toyota is high.commerce. They consider those males are more loyal than females. Power Distance: Japan is a High-context culture. In a culture like America Everyone is engaged in the decision making process.adelaide. In Toyota there is a tough chain of command and much power distance.pdf Page 7 . Companies have belief on individual tasks and individual idea is considered much important. On the bases of this we can say that there is a centralized structure instead of being flat or decentralized. So there is a complexity for Toyota to adjust them in a culture like America where the belief is on gender equality. people are more tasks oriented which I stated to them from the higher authorities.Japan¶s preference for formal negotiating styles rather than the informal approach preferred by their American counterparts2. they have great expansion in the economy and their standards are reflected totally in the organizations. Individual Index: Individualism is less.edu. Management doesn¶t apply to take much risk and they are careful to be more rules oriented. People work in a group and the individual idea or thought is consider or valued less.au/publications/assignments/toyota. However there are female also working in the organization is given equal rights. Masculinity index: Masculinity factor is more important in Toyota. But in America it is considered totally opposite in a culture like America individualism is high.

General Motor¶s America and United Kingdom General Motors (GM) is not only the world's leading manufacturer of cars and trucks. Time devoted to educating and training managers on cultural differences will be well spot3. including hiring former Toyota consultants to guide them into the Japanese market. Between 1908 and 1910. it is also the largest industrial enterprise in the world. There are drawbacks due to cultural differences when comparing America to Japan . being one of the largest and most recognized automotive producers in the world.au/publications/assignments/toyota. Chevrolet.pdf Page 8 . Michigan. realizing that individually produced automobile brands had a much better chance of surviving a slow year if grouped together. In America there is a culture that they have less focus on long term goals. In 1923. America also needs to train the Japanese management to be aware of its culture and the differences between the two countries. Buick.Japan (being the parent company) needs to have some sort of training in their country for American executives.000 employees worldwide. Cadillac.Toyota focuses more on the long-term relations and they want to get rewards from it. and Oldsmobile. Toyota America has issues and problems that were identified in the internal and external analysis based on structure.edu. operations and international management problems in the organization. and has been emulated by countless other corporations. 1986). GM has focused on aggressive global expansion. Durant bought 17 companies and concentrated them in Flint. With 400. (The company also has significant stakes in both Suzuki and 3 http://www. GMC. so they can understand the collective culture of Japan comparison to America¶s individualistic approach according to Hofstede¶s study (Bond.adelaide. and will only benefit from realistic solutions and recommendations to the analysis of its issues and problems.commerce. Saturn. Founder William Durant was a pioneer of the automotive conglomerate. President Alfred Sloan implemented a decentralized management system that is still in place at GM. including brand names Pontiac. Toyota is a global operation. This is the main complexity for the Toyota to adjust them in the culture like America.

) In late 1998. Oster says. And by moving into low-cost vehicle markets in Brazil and Russia." GM is a "huge company with tremendous resources and talents." Insiders bemoan that "much of how you are perceived is based on the way you conduct yourself rather than what you actually accomplish. The world's largest corporation keeps its workforce satisfied by offering "challenging assignments" and by being "responsive to the career goals of younger employees. at GM "corporate culture is a variable" much likes other corporations. Doing so would clearly allow the company to move quickly to respond to the needs of customers and products." The game plan of the GM board is to "demand action" to grow GM's market share and to "focus on customer satisfaction. Building the Movement reflects GM¶s new approach toward helping the salaried workforce live the company¶s new values of customer/product focus. it would launch Building the Movement. and finally. it would create an education series to explain what the new culture is and what is expected of leaders. Culture team came up with four ways it felt it could embed the new culture in the company¶s day-today operations: The company would replace its performance management system. Page 9 . rather than go up the chain of command as they did in the past. The change reflects the company¶s move away from hierarchical decision-making. GM is broadening its penetration of foreign consumer markets. the company would also have an easier time identifying who is accountable." but its enormous size "makes it very hard to stand out and be noticed. but when you have over 100." Of course. it would use internal and external communications to communicate the company¶s new values. speed. The movement appears to be an attempt to implement the new cultural values by teaching workers at any level that they can make decisions in their areas of expertise. a joint venture with SAIC produced the first Buicks for the Chinese market. in 1999. With individuals making decisions. GM upped its stake in Isuzu to 49 percent and bought 10 percent of Suzuki in 1999. Perhaps more than anything else.Isuzu. amassing a client base and establishing brand strength long before its competitors arrive on the scene. risk-taking and accountability. The company has set out to identify employees who already exhibit the new values and turn them into models for others to emulate.000 salaried employees. the chaos factor tends to increase.

There are two UK General Motors Manufacturing (GMM) sites.html 5 http://www. Cadillac. Opel and Chevrolet. spokesman Denis Chick told just-auto that the company is already talking to potential fleet buyers for the car and that there is plenty of interest from the British government and the public sector.But all of this requires a certain amount of risk-taking. HUMMER.com/greencaradvisor/2010/03/general-motors-in-uk-in-talks-with-potential-fleet-customers-for-vauxhall- Page 10 . Saab. and as Oster says.is also highly significant in terms of visibility for some fleets. The fact that the right-hand drive car goes on sale in the UK in 2012 the year of the next London Olympics .edmunds. ³Risk-taking is probably going to be one of the toughest of the cultural priorities4.K. 4 http://www1. which are located in Luton and Ellesmere Port." Chic added that there had been "huge interest" in the car from London's Metropolitan Police Force with an announcement possible later this year. This topic will include the management style of General motors¶ in America and United Kingdom and how Hofsted¶s model applies. General Motors in Britain is already in talks with potential fleet customers for its Vauxhall Ampera extended-range electric vehicle ahead of the U. "But we are already picking up plenty of interest from potential fleet customers. Vauxhall. Bedfordshire. beginning with the takeover of Vauxhall. namely Corvette. GM-U.´ General Motors' first UK presence was in 1925." he said. "We'll start off with fleet demonstrators.com/home/careers/company_profile/0.epolitix.com/members/member-page/sites/gm/ 6 http://blogs.579.5 GM's UK headquarters are in Luton.00.K. market launch in 2012.excite.15623. GM now manages a number of brands in the UK and Ireland. producing the Vivaro van and Astra 5-door respectively6.

In this way individuals lean to be focused on the message and not on the person even though the affiliations and detailed information about one another can develop during a process. the United States has the highest individualism score of any country studied. and values. Americans' self-images. affecting socialization.Low-context culture America is an example of low-context culture. the automobile companies of Old sand Henry Ford promoted the assembly line. environmentalism. Individuals go directly to the point and things are done efficiently. Amon (2002). According to Geert Hofstede's cultural dimensions analysis. (Gutfield. While Americans tend greatly to value socioeconomic achievement. social viewpoints. America is one of the richest economies in the world. language. This is still not a focus and just a by-product of the condition and in any case not necessary for doing work together as it is in a high-context society. We will check each dimension according to the management style of General Motors in America. and multiculturalism. The five dimensions: These are five dimensions from Geert Hofstede's model. and cultural expectations are associated with their occupations to an unusually close degree. Page 11 . While the mainstream culture holds that the United States is a classless society. The American middle and professional class has initiated many contemporary social trends such as modern feminism. So we can say that America is operative in a lowcontext culture this means that people working in the organization do not give importance to inappropriate information about the point that has to be conveyed. American Exceptionalism) scholars identify significant differences between the country's social classes. being ordinary or average is generally seen as a positive attribute. The United States of America has been a leader in scientific research and technological innovation since the late 19th century. In the early 20th century.

The management is more selfreliant and looks out for themselves and their close family members. and Italy (76).com/hofstede_united_kingdom.com/hofstede_united_states. Australia (90). compared with a world average of 50.shtml 8 Page 12 . So there is a same culture dimensions and it¶s easy for GM to adopt that culture. UK is relatively having the same culture as united state. Masculinity: Masculinity (MAS) with a ranking of 62.shtml http://geert-hofstede. United Kingdom (89).7 8 * There are only seven (7) countries in the Geert Hofstede research that have Individualism (IDV) as their highest Dimension: USA (91). Netherlands and Canada (80). This indicates the 7 http://geert-hofstede. Individualism: The high Individualism ranking for the United States indicates a General Motors with a more individualistic attitude and relatively loose bonds with others.

0 Uncertainty Avoidance: Uncertainty Avoidance. Long Term Orientation The LTO is the lowest Dimension for the US at 29. The male dominates a significant portion of the society and power structure. So if we talk about the management of General Motors¶ we see a democratic structure. organizations.K is few points behind than USA in uncertainty avoidance. compared to the world average of 45. the entire employee has equal rights. including government. This situation generates a female population that becomes more assertive and competitive. GM employees feel anxiety in unknown and uncertain situations. It also has a greater level of tolerance for a variety of ideas. GM. and even within families. compared to the world Average of 55. thoughts. United Kingdom also belief on equal gender distribution as USA. there is a less power distance everyone is engaged in decision making process. and beliefs. Power Distance: Power distance at 40. In GM America and United Kingdom. America is a low-context and rule-based culture which favors equality. In UK culture and USA companies are tend to make a plan for short term goals and to achieve that goals in a specific time period.. A low ranking in the Uncertainty Avoidance Dimension is indicative of a General Motors that has fewer rules and does not attempt to control all outcomes and results. participation and democracy. There is no favoritism in term of work force. UK and USA culture both believe on equality and they both are from low context culture. Everyone has right to speak or give suggestions. because there are many people who are from abroad and working there in Page 13 . U. with a ranking of 46. with women shifting toward the male role model and away from their female role. In GM (America).companies experience a higher degree of gender differentiation of roles. This is indicative of a greater equality between societal levels. This low LTO ranking is indicative of the companies¶ belief in meeting its obligations and tends to reflect an appreciation for cultural traditions. so there is a same masculinity dimension.

Work oriented and efficient: Employees of General Motors are work oriented and efficient. It has been seen in the organization that employees are given goals which they have to achieve in a specific period of time but they aren¶t uttered that they have to do it otherwise they will not be awarded. Everyone has right to speak. They are master of their field and they done their work on time. learning. 5.com/acmcewok/Achievementgoalorientation. employees are involved in decision making.America. Highly organized: General Motors are highly organized.10 9 http://www. They help each other in any way.html Page 14 . 3. Friendly and informal: General Motors worker are friendly. and developing new skills. General Motors Business Culture: 1. Freedom-loving and self-sufficient: The employees of General Motors are freedom loving and self sufficient. mastery. solving problems. 4.iapsych. Goal and achievement oriented: General Motors reflect a focus on task completion and understanding. They work according to their assigned tasks. They have decentralized culture.9 2.

net/zadsol/american-business-culture-workshop Page 15 . They provide them ways to achieve goals of the organization. Toyota uses a geographic-area global structure. By focusing on market share instead of profits.net/zadsol/american-business-culture-workshop 12 http://www. most notably between the individualism in America and collectivism in Japan. They always think about their customers and ask them what they want.net/zadsol/american-business-culture-workshop 11 http://www. The company selected few expertises for the negotiating. GM also trained their employees about new technology and gives them information about their goals.slideshare.slideshare. age. y Gender. General Motors empower their employees and support them support for the betterment of organization. They accept and struggle for change. Its key 10 http://www. and social class are not criteria for selection.General Motors Negotiation Strategies: y The negotiators of General Motors are selected based on their record of success. y Individual characteristics are criteria for selection11 Business environment of General Motors: They Listen to each other carefully and show interest for all.slideshare. They believe on constant improvement is obligatory. They believe on skills not other factors.12 Analysis of Toyota and General Motors An analysis of the cultural differences between America and Japan reveals some significant differences. If the employee is good in negotiating they utilize their skills on his field. and is decentralized. the emphasis has shifted towards product quality and customer satisfaction.

compared with the Japanese collective culture. which provide great local distribution channels for their vehicles. access to leisure facilities and retirement allowances to motivate them at work place. efficiency of production. as it reduces their production costs. General Motors therefore determines customer satisfaction with its products and makes improvement based on these suggestions.strengths include product quality. 2004). The first priority of these companies is to introduce the same level of customer service which they are providing in the home country. Toyota is also taking advantage of a close relationship with Honda and leading the way in hybrid technology. as it continually surveys its product users to target new ideas or recognize problems. In difference. The people of world are very much influenced by America¶s culture. A high emphasis on customer satisfaction is one of General Motors strengths. General Motors creates excellent relationships with its dealers. This representing an outstanding strength in sales for General Motors. as well as increased efficiency of information flow between countries (Weihrich. 1999. So they will easily accept their culture & attracted towards their brands. Toyota is providing benefits to their employee¶s low interest rate loans. R&D. GM has a decentralized global geographical structure providing diverse opportunities for the United Kingdom subsidiary. The business culture in General Motors insists on equality. Toyota¶s competitor¶s GM and Ford have reduced their employee compensation benefits severely. and sales satisfaction. Toyota operates in foreign markets bringing it many opportunities for industrial expansion into certain products or services. Organizations competing on a global scale (in foreign markets) are miles above the rest. Toyota maintains a good employee relationship by sharing concerned for their total welfare and uses this to motivating employees. whose profit margins have been increasing every year since 1997. Toyota¶s contributing factors would be pure global dominance Page 16 . becoming the largest auto manufacturer worldwide. housing subsidies. The national culture of American is highly individualist. Hartel & Lloyd.

General Motors sets the standard in efficiency. as it substantially reduces costs through labor.au/publications/assignments/toyota.13 13 http://www. This could be done by forming operations in third-world countries with manufacturing done there. enhancing growth and opportunities. productivity and quality in the auto manufacturing industry.commerce. Toyota¶s latest future plans are to expand worldwide and to engage in manufacturing overseas.pdf Page 17 .edu. and is the envy of rivals such as Toyota.adelaide.

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