Organizational Behavior Of Toyota And General Motors Management Essay

Organizational behaviour is the study and application of knowledge about how people act in an organization. As individual and as a groups. Organizational Behaviour (known as OB) in which large number of tolls are used for analysis purpose.

Organizational behaviour , is “… a study and application of knowledge about human behaviour – as individuals and in groups – in orgns – strives to identify ways in which people can act more effectively.” “The understanding, prediction and management of human behaviour in organisations.” Is an applied science- best practices in one orgn can be communicated to others.

An understanding of organizational behaviour is valuable for improving human behaviour in positive direction, on the one hand and the total organization climate, on the other hand. It tries to promote our understanding of the process of human behaviour and the changes that takes place in the goals, roles, values and interests of the organization members during the course of their association with organizations.

It helps manager to look for the behaviour of individuals in an organization. OB applies knowledge gained about individuals, groups and structure. OB is concerned with what people do in an organization ans how that behaviour affects the performance of that organization. Manager of an organization is required to have complete knowledge and information about the following facts :-

1. When do two people (co-workers, or a superior -subordinate) interact ?

2. When do two or more groups need to co-ordinate their efforts?

3. What complexities are involved in inter-personal relations?

4. Why some employees are more successful than others?

5. How can we act as a team?

6. How to handle the stress of workers – superiors and sub ordinates?

7. How to obtain suggestions from employees?

8. Why the culture of one organization differs from other and why it is changing constantly?


As Toyota has always been a highly analytical company, the shift in cultural values also included placing more emphasis on creative thought and learning by doing. Most importantly, all these structural changes began.

Throughout the 1990s the first years of the 21rst century, Toyota had a very strong focus on how to create lean production facilities globally. Lean manufacturing, lean and Toyota brand nearly became synonymous with one another throughout the last fifteen years of company’s life according to Masaki (2006). The development of the Toyota Production System TPS), a series of best practices bringing new suppliers onboard to Toyota’s production centres provided the impetus for how Toyota would in turn revolutionize ir human resources processes. The TPS had actually become a learning system, not merely a supply chain management and optimization approach. Senior management reasoned that if outside could be coordinated through the TPS, that internal employees be organized to create an even stronger learning and agile organization that could be highly competitive in respond to market needs. As a result of this insight from success the TPS, the Toyota 2001 began completely the culture of what had been a highly hierarchical, mal, and ten emotionless type of corporate culture. The transformation that began with units becoming more distributed away from ir centralized legacy structure also opened up the of a from being solely interested corporate-wide consensus placed more value on a diversified perspective. These two foundation elements of change in organizational structure turned out to be well-timed for the company’s global launch the vehicles market, and the significant new product introductions required to grow market share in the U.S. and Europe, the shift in and structure were critical for the continued growth of company.



The Toyota Corporation has demonstrated through history their ability to use forward thinking. For Toyota to foresee the growth that is to occur ahead, they must begin by looking at their past. Toyota has established itself as a top competitor in the North American and Global automotive market place by practicing the formula that started it all back in 1957. Hiring people not as employees but as individuals has set bar for corporate achievement. Understanding that people possess different strengths and abilities have benefited the individual through exploiting as many possible talents in one area, thus creating greater opportunity for growth within the corporation.

Toyota represents one of the top automobile manufacturers’ offices in North America to work for. Toyota boasts that their, “integrity, passion, and innovation extend beyond vehicle manufacturing.”This bold statement is backed by a strong example of what policies and procedures have been put in place.

Toyota’s diversified employment approach births the new ideas and future concepts that keep emerging on the frontier of the automotive industry, thereby maintaining Canadian and Global industry leadership. One of Toyota’s top ten official business strategies is to recruit the best and brightest, thereby creating new opportunities for partnerships. These key strategies give the perception to the consumer and employee that Toyota holds a “reputation for excellence” on all levels of operation.

Toyota believes in being ethical in the business sense as well as the social sense. Ethics begin at the core of the company and work their way out. Top management believes in diversification and through that diversification representing many faces at Toyota i.e. minorities. No stereotypical assumptions or prejudices are apparent at Toyota, just the selection of talented individuals who posses leadership and innovation.

Socially, Toyota portrays as positive corporate image. Toyota quotes, “We also believe in helping people improve the quality of life in their communities. We work with organizations, schools, universities, and other businesses to support programs that help make our world a better place.”These ideals are practiced across the country and internationally.

The transformation of the Toyota culture its impact on the organizations’ behaviour is to a large extent responsible for company’s success globally. In the U.S. alone Toyota is challenging General Motors for market share leadership, and is also the dominant provider hybrid vehicles. These globules requires a highly synchronized level of performance across manufacturing, supply chain, procurement, pricing, ing and service, all integrated together through an innovative Human Resources initiative titled The Way 2001, launched in April, 2001. The Toyota Way was specifically created to serve as a foundation for the significant change from a human resources standpoint company realized they would need make in order to remain competitive in markets they were already successful in, and rely on human the catalyst and for penetration into new .


General Motors Company, commonly known as GM (listed General Motors Corporation before 2009), is an American multinational automotive corporation headquartered in Detroit, Michigan, and the world’s largest automaker, by vehicle unit sales, in 2011.

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GM employs 202,000 people and does business in some 157 countries. General Motors produces cars and trucks in 31 countries, and sells and services these vehicles through the following divisions/brands: Buick, Cadillac, Chevrolet, GMC, Opel, Vauxhall, and Holden, as well as two joint ventures in China, Shanghai GM and SAIC-GM-Wuling Automobile. GM’s On Star subsidiary provides vehicle safety, security and information services.

In 2009, the company emerged from government backed Chapter 11 reorganization. In 2010, GM made an initial public offering that was one of the world’s top 5 largest IPOs to date. GM returned to profitability in 2011.

GM Goals

In order to achieve our goals, GM has remained committed to the following formula for success:

Move faster and take risks to achieve sustained success, not just short-term results.

Lead in advanced technologies and quality in creating the world’s best vehicles.

Give employees more responsibility and authority and then hold them accountable.

Create positive, lasting relations with customers, dealers, communities, union partners and suppliers to drive our operating success


General Motors Corporation (NYSE:GM), the world’s largest automaker was founded in 1908 in Flint, Michigan of US. In 2006 GM was in a horrible tangle as the company lost $10.6 billion in the previous year (2005). To counter this GM had initially planned for organizational restructuring. As a part of the organizational restructuring the company planned 30,000 job cuts and close down of 12 plants by 2007. The plan of manpower reduction comprised with the hourly workforce reduction of 6,500 hours in 2005 and estimated replacements, including Delphi flow backs. GM management declared its plan expecting to reduce 30,000 blue-collar jobs by Jan.1, 2007 which was about two years ahead of schedule. On Monday, 26th June, 2006 GM’s management announced that 35,000 workers had already opted to leave the company voluntarily, surpassing initial targets and allowing the automaker to increase its targeted savings to US $8 billion annually by the end of 2006. The overwhelming response of the employees for the accelerated separation plan surprised many people, including GM’s management


General Motors has been the number one automaker for decades, now encountering the toughest competition from Toyota which became the #1 automaker (on sales) on year 2007. To be the number one for any industry sets certain patterns and behaviour that can affect performance if not well driven. By being number one, this company must be reinventing itself all the time, changing and adapting to new situations since in theory they shouldn’t have anyone to follow. However we all know how competitive the auto industry is and how mature is its competition. GM has always considered Toyota its closest competitor and the benchmark for the industry. GM has set innovation in many fields of the auto industry, for example: market segmentation, digital and electronically equipped vehicles, truck endurance and resistance, new fuel alternative vehicle development, but has not be able to commercialize those technological innovations to the market in the most opportunistic way. Why is that? GM has always tried to be aggressive and competitive externally, always trying to defend its title against Toyota and other competitors in different segments, for that reason its internal culture is aggressive and competitive as well. It is no secret the financial trouble experience by GM at the present moment, one of the possible causes is do to its cultural background where previous organizational successes fuel the arrogance and short-term orientation of management, allowing the organization to appear effective. This conduct prevents organization, such as GM to adapt effectively to changes in their environment and have negative impact on their finances. GM appears externally as trying to maintain is leadership in the auto industry, by winning other competitors in sales and product. And although through the years GM has built competitive advantages such as production capacity, this has not aid to maintain their long term rein in the last decade. This competitive culture reinforces their internal culture of out-performing others co-workers and departments, by trying to prove their values compare to others. There is a very aggressive culture of goal setting and trying to meet them to the expense of others, reinforcing competition and confrontation over collaboration and teamwork.

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Internally General Motors is full of projects and interactions among different departments are required to launch products on time before the competition. GM has not been successful in the completion of new product cycles in less than 24 months, as Toyota. The general dynamics inside GM can be describe as oppositional, criticism is valued by thinking ideas need to be challenged too look for the most outstanding decision. The decision making process and workflow at GM is very slow and sometimes times consuming, delaying many of their final approvals, hence product launching. Due to the nature of the product and the safety considerations on design and other factors approval process is very strict and ideas need to be discussed and reviewed for flaws extensively in order to reach the most appropriate solution. GM was basically not too much freedom for new ideas; it is true in recent years that cultural weakness was trying to change by listen more to the customers and employees on goals setting and continuous improvement ideas. However, critical decisions are still driven by top hierarchical positions, and the escalation process is still weak enough to reverse any problematic situation. GM has tried to improve its quality process and culture in the recent years, and although been successful in certain fields and products, the general culture still remains for looking at mistakes and point out flaws, especially in production sites. Over the last decade GM has tried to implement different phases of a program call GMS (Global Manufacturing System) based on lean manufacturing and quality methods that should increase the empowerment on workers, managers, engineers and general staff at the assembly line. This idea was based on Toyota’s quality and manufacturing strategies, where workers at the assembly line were empowered to stop the assembly line and dictate for themselves the quality of a component or assembly, not waiting to other levels of management to decide for them.

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