This paper aims to look at different automobile companies and their managerial practices to judge which practice is more successful and why. The two companies being put under observation are Morgan Motor Company and Toyota Motor Corporation. Morgan Motor Company has the view that the basic formula of success should be used over and over again where as Toyota Motor Corporation tends to believe that success would be achieved if technological innovations are used. Both use different types of motivations are both are successful.
From this, we conclude that it is not important which managerial way is followed; rather what is important is to look at circumstances carefully and objectively to form a game plan.
There is not one formula of success but many and they all depend upon circumstances.
Reviewing Management Behaviour in the Car Industry
This paper will discuss two motor car manufacturing companies and their organization. One of the companies would be Morgan Motor Company which was founded in 1912 and is still in business. The other would be Toyota Motor Corporation which was founded in 1937 and that company too, is still in business.
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The paper is being written based on automobile companies because it is one of the oldest industries in the world and one of the most prosperous, since the first self propelled vehicle was made in 1769, the automobile industry has gone through a vast number of phases, thus it is an ideal platform to observe and analyse management behaviour.
The paper is going to first discuss a brief history of the two companies, their organisation and management methods, the theories involved and the conclusions drawn.
Management behaviour is the process which aims at integrating behaviour analysis and management principals to the end that the organisation being managed, is run smoothly, systemic and continuous growth takes place and the workers are satisfied (Mullins, 2010). The phenomenon of management is important because every firm is comprised of people, obviously. To make sure that a person is going to give his optimum performance, he needs to be managed in a way that makes him want to work and be innovative. A worker not happy with his job or the managers attitude, might continue to work but will not be giving his best. Studies have shown that there are two things which make a worker give his best, the feeling that he is respected and a worker friendly environment (Maas, 2004). Management behaviour has to keep in mind all the aspects of the people working, the cultural differences, the mindsets, the individual circumstances and the capabilities a worker might or might not have. This would not only facilitate in effective management but would also help in making a worker feel like his strengths and weaknesses are aptly recognized. Some say that cultural differences are not important; others are of the opinion that they are very important (Lane, DiStefano, Maznevski, 2006).
The organizational theories are divided into two parts, the classical ones and the neo classical one, both have their pros and cons, yet the most effect are those managers which combine, change and manipulate theories according to the situation they are facing, sticking to a single theory would be a bad idea in the terms that a single solution cannot always be considered the right one (Crowther, Green, 2004).
The automobile industry is one the largest and the most frequently changing industries in the world. It has a vast and rich history and it is continues to be one that flourishes nonstop. This industry due to the vast cliental it caters to, has to be properly managed, if not, it will become redundant (Edlehoff, 2004).
The automobile industry is one that is widely popular, since it manufactures such a product which would most likely not fall out demand, it continues to flourish but will the old companies survive the current era or will they be forced to sell out or merge with bigger companies? The only way car manufacturers can survive in this market is if they manage their workers and resources while keeping in mind the current times and trends or they will also fall into oblivion (Anderson, Young, 2001).
Management structures in Morgan Motor Company and Toyota Motor Corporation:
Always on Time
Marked to Standard
These two companies have an ironic relationship in terms of how similar and totally different they are. Both of these are old companies, have been running for decades. These are both successful in their own rite and continue to attract a specific brand of clients. Yet these have completely different management practices.
Morgan Motor Company management:
Morgan Motors were funded in 1912 and since then, the establishment has been headed by the founder, his son and then grandson. The unique aspect of Morgan Motors is that it is the only car manufacturing company still in business which makes cars by hand. It has a yearlong waiting period and the cars are what people might call 'ridiculously expensive'. The attraction this company poses to a consumer is evident in the above description, in the time of exclusivity, owning a Morgan is the ultimate status symbol.
Analysis of Morgan Motors in relation to the Contingency theory.
Morgan motors has one of the most detrimental management systems, it goes against every rule that was ever formulated in relation to management, yet it is very popular. Not only does it have a steady stream of clients but it also earns revenue, yet it has not evolved per say. It has not changed with time or circumstances, yet it has existed for nearly a century. This approach should fail on paper but in real life and keeping in mind the contingency theory, it is the perfect approach. The Morgan Motors managers saw what was selling more and why, they recognized that the reason they were continuing to be successful was the fact that their cars were handmade and that held a charm for the buyer so they stuck to the original plan and in the time of machines and computers they have been making the same car, the same way. Some might say that it is foolish approach but it is an approach that works. Until the approach is continuing to produce results, it cannot be called a wrong approach.
Motivation and employee opinions.
Furthermore, the workers in the Morgan Motors are also of the opinion that the approach should not change, which means that they are working in an environment which they agree with, this is very important in management since the workers are the building blocks of your entire establishment, if they do not agree with the principals governing it, they might continue to work but might not give their optimum performance. A trainee at Morgan Motors trains in the art of building a vehicle by hand for 4 years before he is certified to start work. This can only be done by someone who believes in the company's objectives and does not find them out dated or absurd. Thus in the Morgan Motors management, the motivational theory of Douglas McGregor is put into play. This theory states that people want to learn and to do that, they will become disciplined and resilient. The will not work for financial betterment but for the satisfaction it brings. In this case, the management just has to facilitate the workers with the things they need to become better at what they want to do.
Thus, although the Morgan Motors approach to management and business is one that maybe called outdated and static but it might also be called pure genius. They have taken one idea that was successful and continued to use it till it continues to work.
Role of technology:
Technology has advanced to a degree that nearly everything has been mechanised. Computers, robots and machines are the elements which are considered rudimentary to a company's success. It is believed that without these, consistency would not be achieved ad consistency is what is needed, Morgan Motors, in terms of methods of production proves that wrong. But in other areas, like management, advertisement, payment methods etc. even Morgan motors have evolved and developed. This shows that technology does affect the way management practices are carried out. All the technological innovations have made the managerial tasks much simpler. It is now easier for a manager to keep and access record, to know what is happening and to form decisions. In case of Morgan Motors, technology has touched everything but the methods of production, thus the workforce in this establishment does not benefit a lot from the new innovations, not in a direct way, at least. That said, we can come back to the basic point that as long as something is working, it does not need to be changed.
Toyota Motor Corporation Management:
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Toyota is a corporation that was founded in 1937. It was an offshoot of Toyota Industries which was owned by Kiichiro Toyoda's father. Kiichiro Toyoda was the founder of Toyota Motors. In sharp contrast to Morgan Motors, this is a company that has been going from strength to strength by following technological innovations and the changing demands with time. It is a widely trusted brand of automobiles and it has been successful for decades now.
Analysis of Toyota in Relation to the Contingency Theory:
The approach of Toyota to development has been the exact opposite of Morgan Motors, yet it has been just as successful if not more. Since their ideologies and the clients they cater to are so different, these two cannot be compared in terms of success. Both are successful in different ways. Where Morgan Motors chose to stick to the original plan, Toyota chose to grow as times did. It now, not only employs 320, 808 people worldwide, it has also branched out into making robots and financial services. Thus using the contingency theory, Toyota is also widely successful; it made use of not one system of development, but many, that is what the contingency theory states, that there is no single recipe of success, rather, it is a continuously evolving process which has to be dealt with accordingly, since things change with time, the methods employed should change too. This has proved to be very effective for Toyota, as it has gone from developing engines to being a multimillion dollar corporation.
Motivation and employee opinions.
Toyota has a set of principles which it follows in the case of managerial approach and production, it has two parts
Respect for people.
Thus the manager's behaviour in Toyota bases things on the fact that the work has to continuously improve and every worker, which ever position he/she hold in the company should be respected. This follows Maslow's motivational theory in which respect and self actualization are two of the motivational factors in a human's life. These propel a person to worker harder and do better. By giving the workers respect and proper incentives, Toyota has established a loyal work force, which is continuously working towards betterment. This is in contrast to the Morgan Motors approach to motivation, which depends on the inherent goodness and need of a human to work, this theory works on the basis of respect. Both of these are successful but in their respective companies. They might not have worked in other situations. This proves that no single theory is the best one; rather it is all relative to time, circumstances and people.
Role of Technology:
As opposed to Morgan Motors, technology has played a massive role in Toyota's management and development. As Morgan Motors rejected new innovations, Toyota embraced them till it touched new heights of developments and reached a point where it was not using new technology rather; it was the one developing the new technologies. As new things have been invented and introduced, Toyota has put them into use, making a manager's job easier and more difficult at the same time; he could now manage activities from a computer screen but still had to spend time on a face to face level with the workers since unless the manager works with the workers, he would never be able to know the subtleties and the problems faced.
To conclude, we have seen two companies on two opposite ends of the spectrum. Both are successful in their own ways, yet they approach management in totally diverse ways. One refuses to move on with time which on paper sounds like a failed plan, yet it continues to flourish and the other embraces every new innovation and now is making new inventions of its own. Both have separate motivational plans; yet have a number of equally happy employees. This proves that there is not sure way of managing an establishment. This is the perfect example of the contingency theory put into play since both used the circumstances to the best of their advantages and succeeded.