Lmx Motivation
Arellano University
Legarda, Manila
A Leadership Case Study
“How HR Caused Toyota Crash”
Submitted to:
Dr. Bobby Versoza
College of Arts and Sciences
Submitted by:
Praxedes Marie M. Dulay 3-BSTM1
Human Behaviour Tth 2:30-4:00
You have probably already read or heard about several mechanical failures in Toyota automobiles that led the auto maker famous for quality to recall nearly nine million cars worldwide. In addition, poor handling of the issue in the public eye has damaged the automaker’s brand reputation and caused sales to decline to their lowest point in more than a decade. Toyota’s current predicament is a result of poorly designed practices and weak execution on the part of the human resource department!
BusinessWeek estimates that Toyota is losing $155 million per week as a result of their recent recall and in the weeks leading up to this article Toyota had lost nearly $30 billion in stock valuation. The long-term impacts of the root causes that led to Toyota’s current situation could cost the company hundreds of billions of dollars.
The mechanical failures were known to Toyota leaders long before corrective action was taken, and many close to the issue are indicating that the company took decisive action to hide the facts and distort the scope of the problem. The underlying problem of failing to act on this critical information in a manner consistent with Toyota’s brand is again a rewards issue similar to that at Enron. When the organization disproportionately rewarded managers for cost-containment versus sustaining product quality, it created the incentive for everyone involved to ignore the facts and to deny that a problem existed. Employees who are well-trained and subject to balanced rewards and performance monitoring systems would not have allowed the situation to grow as it did.
The mechanical issues plaguing eight Toyota models are not the result of human resource professionals assuming
Legarda, Manila
A Leadership Case Study
“How HR Caused Toyota Crash”
Submitted to:
Dr. Bobby Versoza
College of Arts and Sciences
Submitted by:
Praxedes Marie M. Dulay 3-BSTM1
Human Behaviour Tth 2:30-4:00
You have probably already read or heard about several mechanical failures in Toyota automobiles that led the auto maker famous for quality to recall nearly nine million cars worldwide. In addition, poor handling of the issue in the public eye has damaged the automaker’s brand reputation and caused sales to decline to their lowest point in more than a decade. Toyota’s current predicament is a result of poorly designed practices and weak execution on the part of the human resource department!
BusinessWeek estimates that Toyota is losing $155 million per week as a result of their recent recall and in the weeks leading up to this article Toyota had lost nearly $30 billion in stock valuation. The long-term impacts of the root causes that led to Toyota’s current situation could cost the company hundreds of billions of dollars.
The mechanical failures were known to Toyota leaders long before corrective action was taken, and many close to the issue are indicating that the company took decisive action to hide the facts and distort the scope of the problem. The underlying problem of failing to act on this critical information in a manner consistent with Toyota’s brand is again a rewards issue similar to that at Enron. When the organization disproportionately rewarded managers for cost-containment versus sustaining product quality, it created the incentive for everyone involved to ignore the facts and to deny that a problem existed. Employees who are well-trained and subject to balanced rewards and performance monitoring systems would not have allowed the situation to grow as it did.
The mechanical issues plaguing eight Toyota models are not the result of human resource professionals assuming