Honda Motor Company Analysis

Honda Motor Company is a multinational Company. Honda Company is found in Japan at the early first time. Then, Honda Company starts to spread to other nation such as Europe, United State, and Asia. How can this company structure itself so successful? Now, we look into their company structure. Honda Company is using the matrix structure. Matrix organizations are flexible, because they allow different dimensions of the organizations to be mixed together. For example: the organization of environment activities.

From the graph, Honda Company prefers geographically defined divisions as the operation units for local marketing, because of their specialist local knowledge of customers. But at the same time it may still want global product division responsible for the worldwide coordination of product development and manufacturing, taking advantage of economies of scale and specialization. For example, Asia area face a lots of air pollution problem, so the technology of knowledge in reducing air pollutions problem is development better than other nation, when their success to create a new product for this purpose, they also will send it to other nation to develop it.

From the map, we also notice that, Honda Company also use a project based structures to solve the problem. For example, in 1997, Honda Company launched the Green Factory Project to respond to recycling-based society initiatives and the New Recycle Project to promote recycling activities for the circulatory use of resources. In 2000, we started the LCA Project to further analyze and quantify the various environmental impacts caused by Honda Company activities.

The main resource in the company is people. The company philosophy is Respect for the Individual, The Three Joys (the joy of buying, the joy of selling, and the joy of creating). For this two main goal in the Company, they company recruit employee with the marketing skill to help the company fulfill the joy of buying, and joy of selling. Honda Company also recruit employee with technical skill, creative idea to help Company fulfill the joy of creating. Beside that, Company also recruits lots of management employee to maintain the three joys, and help the company to do some research to know the customer expectation on the company. Honda Company is interested in the needs of those employees. Company comprehensive benefits program, which includes health, life, disability, paid time off and retirement plans, is designed to provide employee and their families with the resources needed to take care of themselves today and in the future. These will help to increase the loyalty of the employee, and decrease the turnover rate of the company.

By the great improvement of information field, Honda Company can be easy to get the information or the feedback form the customer on the products they purchase. Base on those feedbacks, Honda Company can find out the problem on the new product, then start to solve those problems to increase the quality of the new product. Honda Company gathers the information of the customer need and creates the product bases on that information. This information can help Honda Company reach their philosophy which is respect to the individual.

Honda Company also keep gather the information of the environment change such as the pollution rate, the resources, and other. Base on the air pollution problem, Honda Company keep creating new product or upgrading the exist product to reduce the affection of the air pollution cause by the product. Base on the resource information, Honda Company start to creating some product which match the customer needs but use less resource. For example, Honda FCX, this is using fuel cell to decrease the usage of the gasoline on the vehicle.

Honda’s consolidated net sales and other operating revenue (hereafter “net sales”) for fiscal 2005, ended March 31, 2005, and amounted to Ð'Ґ8,650.1 billion, up 6.0% from the previous fiscal year. Of this amount, domestic net sales increased by Ð'Ґ70.7 billion, or 4.3%, to Ð'Ґ1,699.2 billion, while overseas net sales increased by Ð'Ґ416.7 billion, or 6.4% to Ð'Ґ6,950.9 billion. Operating income amounted to Ð'Ґ630.9 billion, which was an increase of 5.1% from the previous fiscal year. This increase was primarily due to positive impacts of increased profit from higher revenue and ongoing cost reduction effects which offset negative impacts of the depreciation of the U.S. dollar and an increase in selling, general and administrative expenses and research and development expenses.

SG&A expenses for fiscal 2005 increased by Ð'Ґ9.5 billion or 0.6%, to Ð'Ґ1,513.2