Takata Organizational Design

Takata in Crisis

Organizational Analysis

& Recommendations

Organizational Design Paper

Written By,

Mitchell  Christie

December 20th, 2015

Contents

1.0 Executive Summary        

2.0 Introduction        2

3.0 Analysis        3

3.1 Life Cycle and Decline        3

3.2 Competitive Strategy        6

3.3 External Environment        7

3.3.1 Political Forces        7

3.3.2 Economic Forces        8

3.3.3 Socio-Cultural Forces        9

3.3.4 Technological Forces        10

3.3.5 Legal Forces        10

3.3.6 International Business        11

3.3.7 Market Sector        13

3.3.8 Customers and Competitors        13

3.3.9 Restructuring Toyota        15

3.4 Organizational structure        16

4.0 Problem Definition        ..16

5.0 Recommendations, Implementation, and Limitations:        ………………………………………...18

   5.1 Regain Consumer Trust/Governmental Trust………………………………………………..18

      5.1.1 If Brand is Irreparable …………………………………………………………………….19

   5.2 Resolve Current Crisis………………………………………………………………………….19

   5.3 Overhaul/Examination of Internal Safety and Regulatory Policies…………………………20

   5.4 Become a Parent Company (Decentralize into Subsidiaries)………………………………...20

   5.5 Conclusion……………………………………………………………………………………….21

Appendix A - References        ……………………………………………………………………………...22

Appendix B - Timeline of Events………………………………..……………………………………25

1.0 Executive Summary

The report in question takes a look into the current organizational structure and design of TAKATA (TYO).  It will serve as an evaluation and analysis of these aspects.  The methods regarding the analysis and evaluation will be drawn and applied from topics covered in class with regards to Takata’s current status as an organization and what has led to Takata’s current airbag crisis.  

Topics included are life cycle and decline, ethics and social responsibility, international business, competitive strategy, external environment, interorganizational relationships and organizational structure.  Results will attempt to show how their previous lack of ethical and social responsibility heavily contributed towards their current fiasco as well as their lack of cooperation and how if they had acted responsibly over a decade ago, if reports from New York Time’s is to be believed, and in the present they would have otherwise not been in the position they are currently (Tabuchi, 2014).

2.0 INTRODUCTION

Takata is company based on Japan which focuses on automotive parts.  It has production facilities on four continents with its headquarters based in Minato, Japan and European headquarters located in Aschaffenburg, Germany. In total Takata operates 46 plants in 17 countries.(Takata, 2015)

Founded in 1933 in Shiga Prefecture, Japan by Takezo Takada and began producing parachute parts such as lifelines and other textiles.  They began operating in the car industry as early as the 1950s with research focused on seat belts.  Later they incorporated into “Takata”.  During the 1960s Takata started to produce and sell seat-belts while also building the first crash plant for real-life condition testing.  Product lines include various airbag models, seatbelts, child restraints, electronics, steering wheels and other products geared towards the automotive industry (Takata, 2015)

The Mission goal for Takata is as follows:

• Develop innovative products and provide superlative quality and services to achieve total customer satisfaction
• Respect various personalities and cultures and keep associates highly motivated under the Takata name to pursue common goals.
• Be an active member of the community and contribute to a better society.

3.0 Analysis

3.1 Life Cycle and Decline

        It becomes important to understand the scale of Takata when discussing its overall life cycle and the recent brand damage and revenue crash with the current and ongoing troubles resulting from shrapnel being propelled from their airbags.  Takata operates as one of the mainstay sellers of safety equipment for automotive needs from seat belts (both in racing and civilian sectors) too airbags and child restraints.  One can find their airbags in a large portion of vehicles as they hold 20% of the overall global market (Tabuchi, 2014).  In the past few years they have suffered numerous quality failures going so far as to have caused the largest automotive recall in history at 33.8 million vehicles from various automakers (The Canadian Press, 2015) and being hit with the largest penalty The Department of Transportation’s National Highway Traffic Safety Administration (NHTSA, 2015) has ever given noted at $70 Million USD. (Gordon Trowbridge, 2015)

        Due to the extensive and highly costly losses Takata is suffering severe financial setbacks which could reach as high as 2.1 Billion USD aside from the legal penalties the US and Canada are preparing to levy (Tahara, 2015).  It is important to note however that this entire situation was an entirely avoidable one which stems from a lack of proper quality control and managerial oversight as well as fraudulent and negligent actions.  According to New York Times the airbag manufacturer had acted unethically and illegally as early as 2004 with knowledge of the possibility of faulty airbags.  They had conducted off the books tests and upon data indicating the dangers involved subsequently destroyed all relevant data. (Tabuchi, 2014)Thus one can summate that their current ongoing crisis, which goes back as far as 2008 and is still ongoing in 2015 with regards to recalls, is directly relatable and is signs for drastic decline so far reaching it may very well end up causing the company to implode financially.  The resulting loss comes from a sheer act of corporate greed and intentional unethical conduct which has resulted in, as of June 1st, 2015, 8 deaths (Wattles, 2015).