Edited by Harley Jackson
An intrinsic flaw found in many Toyota vehicle models may lead to sudden acceleration. In response to the outside world’s concern, Toyota has decided to temporarily suspend sales of the eight models, including the best-selling model in the United States, the Camry. How could Toyota, a world-class Japanese brand that enjoys an internationally renowned corporate culture, arrive at such embarrassing circumstances? I think there are many internal and external reasons, but the most direct reason has to do with Toyota Corporation distorting its overseas development strategy.
Many post-accident product quality investigations make it clear that the “Customer First” business principle that Toyota values started to degenerate in 2007. At that time, Japan had an advantage in the North American market because its cost was the lowest. Toyota overtook GM and became the biggest automobile manufacturer in the market. From that point on, Japan’s heroism (becoming the best in the world) and its unchecked ambition made it overemphasize maximizing profits (maximizing its market share) in its business goals. One injured American woman, crying bitterly, denounced the executive of Toyota, saying, “You ought to be ashamed of your greed.” Especially when the American Big Three automobile manufacturers were obstructed, Toyota encouraged an ambitious attitude of quick development. Finally, this automobile manufacturer neglected its most fundamental principle: safety defects can be deadly.
Another issue that was called into question was Toyota’s sluggish response to announce a recall. Originally Toyota wanted to trivialize the issue, but instead the problem became bigger and bigger until it was out of control. Instead of saying that this is Japanese corporate culture coming back to haunt the company, it would be better to say that the Japanese company is treating Western society and culture with arrogance and prejudice. The arrogance might stem from the fact that foreign demands on quality cannot compare with Japanese standards. If one concentrates too much on quality, then one loses time and cost advantages as well as the position of first in the world. Therefore, it would be enough to have a comparative advantage over its competitors. However, it is difficult to grasp this outlook in reality.
Furthermore, even though it had these problems, Toyota headquarters still believed that its cars held the leading position in the industry and even believed that its problems were much smaller than the problems of its competitors in America. This time Americans made a fuss out of a small issue because they had an ulterior motive. For this reason, thanks to the introverted culture inherent in Japanese society, Toyota thought that it would be enough to apologize and make compensations. What they do not realize is that these peace talks are a kind of arrogance and will lead to a fatal disaster. Actually, this arrogance is also part of Japan’s overseas strategy which stems from an inferiority complex that has formed and never improved. This is Japan thinking that its own corporate culture is too traditional and conservative to blend with the vast varieties of foreign consumer culture and ideas on how to handle affairs. The ground upon which Japan stands is becoming smaller and smaller. Therefore, the country usually gives up, and just focuses on performing well. Then, if there are problems, all that is necessary is to study a little bit about how they resolve problems, and then everything will be settled.
In short, Japan really does not understand the essence of America’s law oriented society and the needs and pressures of economic freedom (which is the source of American arrogance and its strong attitudes). If a misunderstanding is not the case, then the slow and hesitating response of the chairman of Toyota, the world’s biggest automobile manufacturer, is inadequate, to say the least. In retrospect, Japan did not put the latest Toyota models onto the China production line, which is just another example of prejudice towards Chinese consumption. As for the Japanese Toyota Motor Company (along with Honda and Nissan), they have held back praise for the quality of cars made in China. Despite this behavior, the current “safety issues” all have the common characteristic of appearing in foreign markets.
I feel that this is a problem that Japan will have to deal with now that it has assimilated into the globalization strategy. Before the assimilation, this deep administrative defect would have been hidden by the overall prosperity of the company, but the Japanese economic depression gives an opportunity for the intrinsic defect (to be precise, it is a matter of not being acclimated) in Japanese culture to be exposed. Moreover, the global economic depression has magnified the defect in Japanese corporate culture, and caught on in America as well. In truth, Toyota’s “Customer First” principle (naturally, ensuring safety is the top priority for customers) will still be the invincible secret weapon for maintaining their position in the global environment, while changing their thinking and taking shortcuts will just give reasonable grounds to establish different overseas investment strategies. This second method will eventually cause them to lose their brand efficacy. As to whether or not the Americans have magnified this problem more than necessary — they did choose to take advantage of this opportunity (the U.S. Department of Transportation has been aware of the Toyota defects since 2003).
When looking at it from a perspective of American industries protecting their strategies, one has to admit that the American government has used this incident to exaggerate matters. Looking back on events, Toyota’s recall has given American automakers time and a fresh opportunity. However, if this was a strategy planned in advance by the American government, then I think that when the common people find out, America’s prospects of maintaining their leading position in the world will be bleaker and bleaker.
Besides, calls for appreciation of the value of the Chinese yuan have been increasing, and they are following increasing conflicts between American and Chinese trade. In my opinion, whether or not Obama is trying to improve his government policy track record or trying to increase America’s profits, this forceful attitude that demands an appreciation in the value of the Chinese yuan is not going to help the American economy recover. Furthermore, the contentious economic strategy of taking advantage of others to benefit oneself just leads to a “lose-lose” situation. It is certain to hurt others as well as oneself. I have always believed that the American government should continue to focus on the positive aspects of globalization (such as the fact that free trade lets each party play to its strengths and leads to a “win-win” situation). A method that proactively encourages innovation, strengthens supervision and international cooperation and strives for new opportunities for growth in the global economy will continue to affirm America’s status as an undefeated power. Otherwise, America’s goals and its main government policies will be reversed, and this will confuse the world economy.
In any case, the Chinese industry is rising to stand on the world stage, and it needs to learn a lesson from the Toyota recall incident. There are three main aspects to this lesson. First, the “Customer First” development strategy is a basic condition for all global industries. Companies that do not have this basic condition and still try to maximize their profits (especially if they abandon their quality to cost-saving ratio) will find that their investment tactics will be unsuccessful in the long run. Second, Japan’s culture of restraint will cause relatively large negative consequences in the conflict of the globalizing economy. Thus, the only effective method for resolving this problem is for both sides to communicate and face the problem together, even using legal protection measures to preserve the benefits that they rightfully deserve. Retreating after sustaining losses will cause a situation where the gains do not make up for the losses. In light of this year’s increased conflict in Sino-American trade, Chinese industry should adopt proactive measures to respond to the conflict instead of letting the matter resolve itself. Third, a growth strategy that only seeks quick benefits will, in the face of external attacks, make it very easy for companies to lose their senses of direction. (Due to inertia, the accelerated speed makes it hard to change direction.) Therefore, when companies are progressing towards prosperity, they need to be even more aware of controlling the risks that they take.
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