Toyota

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TOYOTA
Management Case Study
Hiroshi Okuda in Toyota

Nur Firdous Majid & Jatin Naresh
5/18/2009

Table of Contents

Contents Page Number

Introduction 1

Question 1: Okuda’s Leadership Styles 2 - 4

Question 2: Transactional or Transformational Leader 5 - 7

Question 3: Radical changes When Company Is in a Crisis 8 - 9

Question 4: Charismatic, Visionary and Culturally Consistent with
Japanese Practises10 - 12

Conclusion 13

Reference List 14 - 15

EXECUTIVE SUMMARY
Hiroshi Okuda, a Japanese leader, became the president of Toyota in 1995. He was known for his outspoken and aggressive personality. He is also rather frank and is never afraid to speak his mind. For example, one question about his competition prompted Mr. Okuda to say, “I don’t understand why Ford chose that kind of styling for the Taurus; it is too round. In Japan, that styling was popular four or five years ago.” (McFarlin & Sweeney 2006, p. 426) He was much different than the other executives in Japan where these Japanese executives usually remain unseen. During his time as the president of Toyota, he adopted many leadership qualities. Firstly, he led Toyota on being a household name. Besides that, he also came up with various innovations and managed Toyota according to his unique style. Okuda was also known as a transformational leader as he implemented many drastic changes to the company. A leader should recognise the circumstances and organisation of the company before choosing to become a transactional or transformational leader as they exhibit very different qualities. When a company experiences a crisis, a leader should be able to make some radical changes in order to turn the company around. This is exactly what Okuda does. Okuda is definitely classified as a charismatic and visionary leader. He got things done using his personal charm. Moreover, he always had a vision of the future.

INTRODUCTION
In this report, we will be discussing the leadership style adopted by Hiroshi Okuda while he was the President of Toyota. Besides that, we will also be debating on whether he is a transactional or transformational leader. This report also includes the explanation how a company should react when dealing with a crisis, whether the leaders should implement radical changes or simply carry on with their current management style. Moreover, this report also discusses on whether Okuda is a charismatic and visionary leader plus whether his leadership style was culturally consistent with Japanese practises. We gathered information on Toyota, Hiroshi Okuda and his leadership style from many different sources such as books, online articles, journals, newspaper articles and also some trustable online information. This information was then analysed and interpreted in order to provide a chronological series of action by Toyota from the time before Okuda became the president until after he was retired.

Question 1 : How would you describe Hiroshi Okuda’s leadership style? Cite specific examples supporting your choice. Hiroshi Okuda, the man that led Toyota on being a household name Hiroshi Okuda is the person who has led Toyota Motor Corporation to become one of top brands and a successful company in the world. He became president in 1995 (Businessweek 1997) and then later became Chairman in 1999, currently he is the senior advisor and Director of Toyota. Okuda was the first person outside the Toyuda family to run the company. Okuda changed Toyota’s conservative style to a more aggressive one (New York Times 1998). He is very frank and speaks his mind out to the public, and he believes innovation is the way to progress. He is clearly different from other leaders as he openly states his ideas publicly and even the problems and...
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