HONDA

Honda Case



Honda Case

Task I

Strategic Objective of Operational Management

Honda claims to have a 'human-centered' approach to work, less rigid in defining standard operations than Toyota. Employees rotate tasks; indeed they must be flexible, changing posts, models, departments, and product types. But the HPS does not rely on unplanned long shifts to make up lost production. When needed, Saturdays are used. Working hours are the lowest in the Japanese automobile industry. Focusing on employees is a good strategy. Employees after all are the backbone of a company, and without them it is impossible for any company to succeed. Employees at Honda Motors were therefore viewed as a 'fixed' asset, consistent with the 'flexi factory' operations strategy. (Birkinshaw, 1998, 268-95)

Honda also continued to promote individualism, youth, and a certain equality while Japanese culture emphasized the opposites - groupism, respect for age, status. The constant theme at Honda remained how to overcome the organizational rigidities that Japanese culture was believed to foster - 'big business disease'. Honda the business leader appears to have a contemporary and dynamic appeal. Striking remains the extent to which his and his company's approach to business and management - and indeed to life generally - so contradict many of the stereotypical images of Japanese management styles (Birkinshaw, 1998, 268-95). Yet conditions of employment at Honda remained typical of other large companies in Japan (with the notable exception of fixed working hours in the factories), and were still viewed as consistent with Fujisawaism.

There are two views on Honda's achievement in the U.S. market. In one, Honda's strategy was an archetype of Japanese penetration of Western markets. The aggressive pursuit of domestic volume established a low-cost base for expansion overseas. This was the conclusion of a Boston Consulting Group study for the British government. A rather different account was given by Richard Pascale, who went to Tokyo to interview the elderly Japanese who had brought the first Honda machines to the United States. As they recalled it, Honda had aimed to secure a modest share of the established US motor-cycle market (Birkinshaw, 1998, 268-95).

In Europe, by contrast, Honda's strategy required few resources. There were persistent problems in Europe. Honda found it difficult to understand the subtle differences among European markets. Further, unlike their American counterparts, European competitors already offered high-quality, small, and low-cost products (though not always in the same vehicle). These factors, combined with lower levels of Honda sales in Europe (11% of global turnover in the early 1990s) than in Japan (33%) or North America (43%), meant that fewer resources were devoted to product development for Europe.

In the case of a mutually beneficial-exchange alliance, however, the dominant strategy for both partners is to hold back--in other words, to get as much as possible while giving as little as possible (Birkinshaw, 1998, 268-95).

Set against this deeper understanding, simple and reductionist ideas about post national enterprises and global corporations operating in borderless worlds do not offer very helpful interpretations of Honda's international ...