Introduction
Companies
grow and are increasingly making its way into the global business environment.
However, there are profound challenges being encountered, necessitating these
companies to focus on developing effective strategies. Hence, these challenges
are requiring organisations to explore the various opportunities available to
them in the global business setting. Strategies are key in achieving
sustainability thus contemporary organisations are working at either growing fast
ahead of the competition, growing in line with the industry where it belongs or
catching up and defending an existing status. In developing key strategies to
combat the threats imposed by the internal and external environment, Honda
Motor is implementing reconciliation of dichotomies. Since its inception in
1948, Honda Motor had become one of the largest and leading automakers in the
global automobile industry. In this
report, the global automobile industry will be analysed through the spectrum of
Honda Motor. It is the goal of the discussion to focus on the critical analyses
of different strategies adopted and implemented by Honda Motor.
Strategy and managerial dichotomies
Business
level strategy vs corporate level strategy
There
are strategic choices that can provide an organisation bases for its decisions
on what approaches, directions or methods can be used for achieving business
level and corporate level objectives. Business level strategies create an environment
of better competition since this is a core strategy that the company forms to
describe how it intends to compete in a certain market (Hough, 2006, p. 47). In
business level strategy, integrated and coordinated set of commitments and
actions are used to gain competitive advantages by exploring core competencies
(Mankins and Steele, 2005, p. 68). Choices of business level strategy are
important as it impacts long term performance of the firm. Nonetheless, given
the complexity of successfully operating in the global economy, these choices
are typically difficult to decide upon. Hough (2006) noted that the purpose of
a business level strategy is to create differences that will distinguish the
firm’s position with that of its rivals.
As
firms move beyond their traditional business level focus, corporate level
strategies are developed. These strategies specify the actions the firm takes
in gaining the competitive advantages. This requires that the firms should
adopt a long-term perspective and how the changes taking place within the
industry will affect its current business model, its future strategies and its
sustainability (Bowman et al, 2002, p. 676). As such, the purpose of having
corporate level strategies is central on enabling the company to sustain and
further promote its competitive advantages as well as profitability. Simply,
corporate level strategies are created to drive the business model over time
and determine which business and functional level strategies should be created
to drive long term profitability. Corporate level strategies therefore deal with
plans for the entire organisation and change as the industry and specific
market conditions warrant.
Reconciling
dichotomies at Honda Motor
Mair
(2004, p. 671) presented various dichotomies relating to Honda Motor’s
operations. Nevertheless, Honda Motor is keen in developing internal core
competencies and capabilities by virtue of products and processes. Product-wise,
Honda is known as the engine leader because of its technological innovation
named the compound vortex controlled combustion (CVCC) engine and the variable
valve timing and lift electronic control (VTEC) family of engines. In
leveraging the core competency, Honda understands that there is a need to
combine engine with efficiency, and efficiency for Honda meant to integrate
‘environmental’ element. Such an element is evident on engineering engines that
do not create pollutants while not also sacrificing the performance (power) of
the engine. These technologically innovative engines enabled the creation of
excellent products in a variety of markets.
As
agile as a company can get, there are two reasons by which Honda delivers
superior engine designs. First, is because of its organisational approach to
developing products with the sales-engineering-development (SED) teams as the
key driver. Although not all processes are in-housed, the SED teams are
performing different functions from marketing, product engineering down to
manufacturing. Such a practice enables Honda to correlate the functions
together, reducing development lead times in the process. This is crucial
especially because of the ever-changing requirements of the consumers and
nature of the automotive industry itself.
To
address the changing needs of the consumers while also tapping on new
technologies, Honda is making use of a model replacement system. Honda was able
to provide consumers with different versions of car models every four years,
allowing new technologies to be incorporated into the new versions such as new engines,
gearboxes and braking systems. The model, however, was criticised by global
competitors, saying that what Honda is making could only pass as ‘cosmetic
facelift’ of modern-looking old car models (Mair, 1996, p. 452). Honda refutes
these criticisms, arguing that components of old models including the lights,
exterior body shape and internal design are officially replaced. To wit, the
model is an iterative process -- and also a proactive process -- whereby
manufacturing systems and whole model design configurations are already
pre-planned, allowing expected evolution on components and models. Iteratively,
model evolution is time-bounded, practiced laterally and geographical wherein
new models are offshoots of old models being roll out to places where old model
were initially offered.
Not
only that Honda had a core competence on engine designing, Honda is also
critically capable of manufacturing and associated processes. Within Honda’s
production chain such as logistics, planning and marketing, there are
systematic processes. From its free-flow assembly line, Honda had combined
productive efficiency and being humane where the dignity of the workers was
uplifted. Workers are dignified in the manner that they are given sense of
ownership over production processes. Further, Honda reduced cost while also
maximising product variation through the combination of large-lot mass
production and one piece flow production system. While Honda is making its production
even more productive internally, externally, the firm is successful in more
product development for consumers and in creating workplace effectiveness for
the workers. This would be difficult considering that the operational and
people aspects of an organisation are not easily reconcilable.
For
Honda, the key is to integrate both the push and pull systems which can be
regarded as fusion of Westernised and Japanese business ideals. Westernised
because it deals with the market and marketing orientations and Japanese since it
small-scale planning system. Although it cannot be said that Honda is veering
away from its Japanese roots through Westernising the internal processes, it is
unJapanising specific processes. Basically, if Honda is going to compete
globally it has to discard culture-based management of operations especially
since it seemed that the Japanese model is a direct opposite to the Western
model. Honda combated the adversities of culture-oriented operation by striking
a balance on both models dichotomously.
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