in search of excellence new
TRANSCRIPT
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 1/26
“In Search of Excellence”
Assignment 1
Dharshviny Sasidharan
SCM-006798
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 2/26
Introduction
“Excellence is in the details. Give attention to the details and excellence will come.”
(Perry Paxton, n.d.) Excellence is the goal of every man on the face of earth. Some find
excellence in building a reputable name in society and some find excellence through
academics. However, remarkable it is when some people turn their entire life searching for
excellence through businesses and organizations. These people make up the leaders in our
society. Their success story is known to everyone and even becomes inspiration to some.
Success to them however, never came rolling. Creating an organization that is able to function
smoothly as well as profitable needs a strong foundation, clear strategies, efficient
management style as well as values that will uphold the company‟s name. Even so, in today‟s
world, excellent companies keep merging everywhere and their secret to success is definitely
to have a management style that becomes a guideline to the companies. One such
management strategy that is worth mentioning will be the Mckinsey‟s 7S framework. This
framework consists of seven elements namely strategy, structure, systems, style, staff, skills,
shared values, or also known as super ordinate goals. Most successful organization is at least
made up of one of the S‟s. This paper will look at some of the most successful organizations
known to people which operate by at least one of the elements in the Mckinsey‟s framewo rk.
Some of the companies are AirAsia, HP, Intel, Toyota, Honda, and Starbucks.
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 3/26
1.0 AirAsia: A Brief History
Every man goes in search for excellence and none opts for the otherwise. However, one
man made the difference when he bought over the now world‟s best low-cost airline for
merely RM 1 (US$ 0.26). The history of AirAsia begun when TuneAir bought it over in year
2001 with only two aircrafts and RM40 million in debt. In 2002, AirAsia became the first
airline to introduce online booking services to customers who wished to book their tickets and
one year after that SMS booking was introduced. Within three years of introduction into the
airlines business, in year 2004, AirAsia was awarded the Asia Pacific Airline title by the
Centre of Asia Pacific Aviation. Finally, in the year 2009, AirAsia wins the „World‟s Best
Low-Cost Airline‟ title awarded by Skytrax. (Have You Flown AirAsia, n.d.). Currently,
AirAsia is still growing rapidly bagging titles and awards, beating other dominant airlines like
the Arab Emirates and Singapore Airlines and making a huge name in the airlines business.
The idea of buying over an existing heavily in-debt airline that ridiculed many at that point of
time now has proven itself, but the secret to it‟s success very much lies on the way Dato Seri
Tony Fernandez brought AirAsia up from scratch. Mention AirAsia now to Malaysians even
Asians for that matter, all they think of is its famous tagline, “Now Everyone Can Fly.” The
tagline truly suits AirAsia since statistics have shown that before its existence; only 6% of
Malaysians have ever travelled via air. (Tony Fernandes Legion D‟ Honneur, 2000). It is in no
doubt that, the success of AirAsia is due to its well-built foundation; its clear strategies,
excellent culture, values, and management style, which are observed by both the employees
and employers.
1.1 The AirAsia Backbone: It‟s Strategy
“A man who does not plan long ahead will find trouble right at his door.” (Confucius, n.d)
Strategy in an organization is a vital part for its growth. Without a strategy, a company‟s
success is at stake. The strategy used in AirAsia is very simple and straightforward. It consists
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 4/26
of four main pillars, which are safety, low fare, service, and simplicity. Maintaining the
„safety first‟ attitude in this company sees AirAsia collaborating with huge names such as GE
Engine Services Malaysia (GEES),a 50 year old company which services jet aircraft engines
as well as a leading manufacturer of large and small jet engines for commercial and military
airplane also engines for industrial applications and marine. In addition to that, GEES leads in
providing integrated engine maintenance services. The five-year deal made in year 2002 looks
at AirAsia spending a sum of 20 million USD in order to provide excellent safety features to
customers as well as to ensure that they are accident free. (Press Release, 2002).The next
strategy emphasized in AirAsia is their low fare, no frills concept. According to Merriam
Webster Online Dictionary (n.d.), the definition of „no-frills‟ is to offer or provide only the
essentials, not fancy, elaborate, or luxurious. AirAsia believes in getting their customers from
point A to point B in a short time. Hence, it exercises removing a few frills within its airline in
order to make it more affordable for everyone. Amongst the things that AirAsia has put aside
to fulfill their low-fare strategy are, no free food and beverages, free seating, ticketless
airlines, no refund and no loyalty program. AirAsia welcomes passengers to customize the
way they fly by enabling customers to purchase food and beverages, comfort kits and many
more from the cabin crew only if they need it. Implying ticketless airlines also saves
customers from the hassle of collecting tickets before the flight as well as saves the cost used
for paper, printing, and distributing.
Simplicity is the third strategy used in AirAsia. Simplicity in this company is defined in a
unique manner. Two of the obvious practice that AirAsia does is to standardize the systems
and equipments as well as simplifying its booking process. In order to efficiently handle the
aircrafts and make it easier for their employees, AirAsia make every effort to have the same
type of aircrafts. It is currently replacing all its old models with the new Airbus 300 models.
(Idris, n.d) This results in a simple way of handling and providing maintenance for the
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 5/26
aircrafts as well as making the training process for pilots and cabin crews a much easier one.
Apar t from that, AirAsia‟s simplicity is also implemented in terms of booking tickets.
According to HaveyouflownAirAsia.com (n.d), AirAsia was the pioneer in online booking of
tickets. A 3-step procedure was created to give customers a hassle free process of booking
tickets. All one needs to do is; book, pay and fly! Since this approach relies heavily on
technology, AirAsia went on in becoming the first to introduce its SMS booking to customers
where they can book tickets, pay for them, and even check their flight schedule through their
mobile phones. Both these system are fundamentals of practicing simplicity in AirAsia.
Finally yet importantly, AirAsia stresses on their services that they offer to customer at every
level. With the aim of being the lowest cost short-haul airline, one of AirAsia‟s visions
suggests that their services must ensure satisfaction of every guest. To facilitate that vision,
employees in this company are always friendly to their customers at every opportunity. This
includes flying on time and awarding their customers if the flight is delayed. According to
AirAsia, its flights in July have reported a 92% rate of punctuality. It also recently introduced
the on-time guarantee where passengers are entitled to a RM 200 AirAsia e-gift voucher if
their flights are delayed for more than three hours. Steps as such not only ensure that their
service are the best but also increases customer loyalty towards this company.
“Never be afraid of failure.” (Tony Fernandes, 2004). As the founder of AirAsia, he has
since come a very long way in the airlines business. AirAsia is a good example of how having
a strategic plan can benefit an organization. If it were not for this redefined business model
that it has today, AirAsia would not be recognized worldwide as it is now.
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 6/26
2.0 Hewlett Packard : It‟s Story
Who knew that a garage built by two university classmates would today become a
world-renowned company manufacturing electronic tools; things that we rely on so much
nowadays; laptops, desktops, printers and much more. The growth of HP was a remarkable
journey when both classmates; Bill Hewlett and Dave Packard created HP (Hewlett-Packard)
in year 1939. HP‟s first product created in that garage was an audio oscillator, a tool that
produces frequency or pure tone at a given time, which was bought by Walt Disney Studios to
be used for their film, called Fantasia. The following few years sees HP growing from a
simple garage to a rented building and continuously producing equipments and devices
alongside building its own unique corporate culture. In 1960, after 30 years residing at its
birthplace, Palo Alto in Loveland, Colorado HP opens its first manufacturing plant in the
United States. At that point, HP was very much established and had almost 3000 employees
under them with a profit of $ 60.7 million. The 70‟s witnesses HP becoming the pioneer in
producing a new range of computing products including the first scientific handheld
calculator, the HP-35. In the next decade, HP grows even more rapidly making its entry into
the computer industry creating computers, desktop machines, as well as minicomputers. HP
also begins to link their computers to its electronic devices and medical products making it
more powerful and faster. They also made entry into the printer business, producing inkjet
printers, laser printers and many more.
In the 90‟s the ever-growing company opens many labs all around the world in order to
provide a better service to people around the globe. In the same decade, Dave Packard
produces „The HP Way‟, a book depicting the excellent values and culture practices that have
been the guidelines to HP‟s extraordinary success. The end of the decade also sees HP giving
importance to its brand. HP releases its brand new logo with the print and media giving focus
on its history of invention and innovation. The birth of the new millennium looks at HP
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 7/26
simplifying its technology experiences for its customers and becoming the world‟s largest
technology company. Later in the decade, HP continues to grow steadily producing products
with the latest technology for its customers. At the end of the decade, HP bags awards for its
inventions and continues to make a name in the business world. (HP History, n.d.)
Making a huge success in the business world is a tough job. However, as an organization,
HP has achieved its success almost easily with the help of an amazing culture and
management style that is practiced in HP.
2.1 Built to Last: The HP Way
Mr. Packard, the founder of HP once said, “ We had to tackle almost everything
ourselves--from inventing and building products to pricing, packaging and shipping, from
dealing with customers and sales representatives to keeping the books, writing the ads and
sweeping up at the end of the day. Many of the things I learned in this process were not
available in business schools.” (Cranny, 1996) Handling everything in an organization is not
an easy task. Thus, both Bill Hewlett and David Packard came up with a management style
that has led their company to an outstanding success in the development of technology. Both
these masterminds created „The HP Way‟, a management style that has brought much success
and development to the growth of HP as an organization that is not only profitable but also
responsible towards their stakeholders, environment and many more. There are several
principles that HP has lived by. They believe that management in a company should
ultimately be about building relationships. Leaders in HP adopted the „management by
walking‟ style in order to keep connections close to their employees in the company.
“Personal communication was often necessary to back up written instructions. That was the
genesis of what became „management by walking around‟ at Hewlett -Packard Company.”
(Minton, 2007). Exercising this style has enabled them to find out what their employees are
working on, the problems that they encounter daily as well as their fresh ideas to enhance the
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 8/26
products further. In HP, they believe that by walking around, ideas from employees are
communicated better. Employees too, are regularly appraised on their performances and this
is usually done in an informal setting.
Besides practicing the management by walking style, HP leaders also practices the
management by objective style in their company. According to BusinessDictionary.com
(n.d.), management by objective is about having greater employee motivation and
commitment through participation in the planning process. At HP, they make sure that the
overall objectives are well grasped by everyone. When employees are well informed of the
objectives, the leaders at HP allow their employees to work towards those targets in the means
that they are comfortable with. The HP Way also sees its leaders establishing another policy
called the open door policy. The policy encourages executives to have offices with no doors
as well as to have open cubicles among their employees. This policy was used in HP in order
to build an environment of mutual understanding and trust amongst their staffs. It also
encourages workers to confide in to their executives about their problems, be it personal or
regarding work without any negative consequences. Apart from these, HP as an organization
pioneered the idea of working with flexible hours. This concept, often known today as the
„flexi time‟ enables workers at HP to start work at anytime as long as they complete a given
amount of working hours in a day. The „flexi time‟ concept that HP has given birth to is a part
of HP‟s belief that as an organization they must respect and have trust in people.
Packard once said “to remain static is to lose ground.” (HP History, n.d.) Hence, both
Bill Hewlett and David Packard devoted much of their time to create an innovative company.
However, HP‟S success must not only be measured through their products but also their
revolutionary management style that has become a source of inspiration to many businesses at
present. Now HP is still encountering immense amount of growth in profit as well as
employee growth.
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 9/26
3.0 Intel: History of Innovation
Intel Corporation is currently the main semiconductor producer in the world, with major
facilities in the United States, Europe, and Asia. Intel has uplifted the world of technology
since it was founded in 1968. Intel's creator, Robert Noyce and Gordon Moore, were from
Fairchild Semiconductor, established in 1957. While at Fairchild, Noyce and Moore created
the integrated circuit, and, in 1968, they decided to form their own company. They were also
joined by Andrew Grove, an employee at Fairchild. Grove remained the president and CEO of
Intel till the 90s. The company was integrated on July 18, 1968, as N M Electronics,standing
for Noyce and Moore, but quickly changed its name to Intel since Noyce and Moore sounded
like „Noise More‟. Thus, they decided on Intel and formed it from the first syllables of
'integrated electronics.' Intel gathered $5 million in capital before going public. In a few
months of its startup, Intel produced the 3101 Schottky bipolar memory, a high-speed random
access memory (RAM) chip and sees Intel continously producing products to make perfect its
earlier one. The company's biggest outbreak on the computer industry was on 1971 when the
introduction of the 4004 was made to the world; the first microprocessor. Similar to many of
Intel's earlier innovations, the microprocessor was a result of efforts to advance another
technology.
Later on, a Japanese calculator manufacturer known as Busicom, asked Intel to design
twelve cost-effective chips for a series of calculators. Intel‟s engineer Ted Hoff agreed to be
assigned to the project knowing that he would not be able to pull it off alone.However, in
order to solve that problem, Hoff conceived a plan for a central processing unit (CPU) on one
chip but is able to function exactly the same as twelve chips. The 4004 model was then
created, which crammed 2,300 transistors onto a one-eighth- by one-sixth-inch chip. In the
1970s, Intel had developed the erasable programmable read-only memory (EPROM), since
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 10/26
the standard ROM chips can only be programmed during its manufacture and is permanent,
any change required on the chip,results in the manufacture of a whole new chip. With the
creation of EPROM, Intel could offer its customers chips that could be erased and
reprogrammed with ultraviolet light and electricity. When it was introduced in 1971, EPROM
was still new and did not make it big in the market.
Intel's growth was such that from the 12 employees it had at the start, the number grew to
15,000 staffs in 1980. Such a development demanded a thorough approach to its corporate
culture. Fairchild's bureaucratic bottlenecks taught Noyce, Moore, and Grove that defining a
workable management style was very important. They kept the communication lines open by
having informal weekly lunches with employees while the company was still small, but that
system had become unmanageable. Hence, the founders lined out a carefully planned a
program giving importance to openness, decision making on the lowest levels, discipline, and
problem solving. With that, the company's top executives started giving up luxuries such as
limousines, expense account lunches, and private parking spaces to establish a sense of
teamwork with their subordinates. Intel also started highlighting its values amongst its
employees and higher management team.(Intel Microprocessor Quick Reference Guide,n.d)
In order to support its then mission which is “Do a great job for our customers,employees
and stakeholder by being the premeninent building block supplier to the computing industry
worldwide.” (Whetten,Godfrey,1998). In order to fullfill this mission, six values were created
as a part of its corporate culture. Although its mission has changed currently according to the
flow of time, the six values that were emphasized then remain a part of Intel‟s shared values.
Intel remained competitive through a combination of clever marketing, well-supported
research and development, and most importantly a vital corporate culture with significant
values being a part of it.
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 11/26
3.1 Their Ideals: The Intel Values
“A research confirms that organizations with a strong corporate culture based on a
foundation of shared values outperformed other firms by a huge margin.”(Kouzes, Posner,
2007). Intel as an organization which is almost 40-years of age has been practicing the same
set of shared values that were outline by their founders back in the 60‟s. Those six values that
Intel has practiced all along is a part of how they are defined as employees and as an
organization. Intel‟s values are more than jus words as they are something that the staffs live
by and their achievements are definitely the proof.
One of the first most important value that Intel stresses on as an organization is
customer orientation. An American born business man, Harry Gordon Selfridge once said,
“Customers are always right”. (Thinkexist.com, n.d.) At Intel, workers live by the same motto
too. Staffs in Intel are always advised to listen very carefully to their customers, suppliers, and
stakeholders. They are asked to clearly communicate mutual intentions and expectations
towards their customers. In order to keep their customers happy, workers are expected to
deliver innovative and competitive products and services regardless in what department they
are in. By practicing all these, the leaders of Intel believe that it will be much easier for
customers to work with them and indirectly resulting in customer loyalty and to Intel being a
vendor of choice. The second value that is given much emphasize is discipline. Intel observes
this value in terms of maintaining professionalism at all times as well as conducting their
business without compromising their integrity. This not only applies towards their customers
and suppliers but also towards their environment in the company. Everyone at Intel is
expected to keep their workplace safe, clean and injury-free as well as make and meet their
commitments as the Intel workers. Discipline also comes into play when any staff projects are
planned. Employees there must properly plan and fund these projects.
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 12/26
Their third shared value is quality. Employees at Intel go all-out to achieve the highest
standard of excellence in everything they do. The learning process at Intel is continuous
where employees develop, and improve in their field. The Intel staffs also take a lot of pride
in carrying out their duties. Most companies these days discourage their employees to take
risks when it comes to work. However, Intel on the hand encourages their staff to do so.
Hence, leaders of Intel have outlined taking risks as one of their core values. Innovation and
creative thinking are fostered among their staffs. In fact, staffs at Intel are told to embrace the
positive changes around them and challenge the status quo. “Those who never made mistakes
lose a great many chances to learn something.”(Luther, n.d.) Intel always supports their staff
to learn from their successes and mistakes. They also reward their employees for informed
risk taking.
A human needs a comfortable environment for him to be productive. Thus, one of
Intel‟s values highlights that every employee of Intel, regardless of their position must work
together in making Intel a great place to work. They request their staffs to always be open and
direct at all times as well as to maintain respect between each other all the time. Intel also
promotes a healthy and challenging work environment that will further develop their
workforce. They appreciate employees by rewarding and recognizing their accomplishments.
Staffs at Intel are not only assets to their company but is also ushered to become a good asset
to their communities. Last but not least, the sixth value that is underlined as a part of Intel‟s
shared values is results orientation. Intel sets challenging and competitive goals for their
employees to meet. They also make sure that staffs give focus to outputs and carry out their
responsibilities well. In a problematic situation, an employee is expected to approach the
situation constructively with confrontation and solve the problem. These duties are expected
to be executed flawlessly as they may hurt the image of Intel.
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 13/26
4.0 Honda: The History Behind
Mention Honda today and everyone would start talking about their automobile‟s latest
design, speed and so on. The popularity of Honda Corporation did not just rise but involved a
lot of hard work in bringing up the company. Honda Corporation was founded in year 1948
but the original history goes back much further in time. The man behind Honda, Soinchiro
Honda grew up in an environment filled with cars and motors. He worked as a trainee in
Tokyo‟s Art Shokai motor shop in the 1920s. Honda started off with Honda Technical
Research Institute in 1946.Two years later, this research institute was developed to become
Honda Motor Company in 1948 where it began by making and selling motorcycles.
The 1950s sees Honda keeping its focus towards motorcycles even as other motor
companies began shifting towards automobiles. In the same year, Honda launched „Juno‟
scooter which was the competitor product against Italy's Vespa scooter, and sales took off.
When it finished 6th place in the 125cc category at the Isle of Mann TT Race, Honda‟s name
began to make a mark internationally.
It has always been Soichiro Honda‟s dream to go international with his organization.
As a matter of fact, success at Japan wasn‟t his ultimate objective with the Honda
Corporation. He always had the impression and often told his friends and associates that
success in Japan would come naturally if Honda was successful worldwide. Honda then
started to open branches in other nations which include a Honda Shop in Los Angeles in 1959.
The first ever bike that was sold was the C100 Super Cub model. The company then easily
adopted “good products know no international boundaries” as their philosophy.
In the 70‟s, Honda experienced a major decision point as it began exporting the Civic
model to the United States which became the most successful and economical family vehicle.
The model was so cost-effective that its success boomed even though the entire world was hit
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 14/26
by the energy crisis. Soon after that, Honda began to sell the Accord model in the 1980s. It
also started building cars in the United States. In order to please its wealthy customers, Honda
created the sophisticated Acura line of automobiles compared to those who preferred the
practical Civic and Accord models.
At present, Honda is very well known for its quality in their automobiles in every type
of vehicle you can ever imagine. It is also becoming more responsible towards the
environment and is working on producing environmentally friendly cars such as the Insight.
Having a lower fuel economy and a lower price tag enabled Insight to become Japan‟s best
selling vehicle and indirectly becoming the first hybrid vehicle to top the list of
automobiles.(Honda Worldwide: Timeline, n.d.)
The success story of Honda would not have occurred if its leaders paid less attention
to its organization structure. The structure of Honda was carefully and cleverly arranged by its
leaders so that every one could carry out their responsibilities orderly. “Organizational
structure can be considered as the arrangement of organizational parts that exist to provide
organizational effectiveness.” (Erickson, 2005) Honda‟s success today is definitely
contributed by its efficient organizational structure.
4.1 Honda‟s Structure: The Winning Hierarchy
Honda considers their management to be one of the most crucial elements in inclining
the growth of its organization. Generally, Honda has six administrative regions worldwide
that executes and develops the business according to the fundamental corporate philosophy of
Honda Corporation. These regional administrations adopt long-term perceptions and stay in
close ties with the local communities. Honda has four business divisions which are
motorcycles, automobiles, power products as well as components. These divisions create
medium and long-term business plans. Each and every division targets to amplify its
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 15/26
performance on a global base. Functional operations such as Customer Service Operations, on
the other hand, support other functional operations in order to increase Honda‟s operational
efficiency. Apart from that, Research and Development activities are also conducted primarily
at Honda‟s independent subsidiaries like the Honda R&D Co. Ltd. The Honda group carries
out research and development activities proactively in order to create products which are
unique.
At a closer look, in order to supervise their management in a more effective way,
Honda hires outside directors to its Board of Directors. Its Board of directors consists of 20
members of which two are from external sources. This board functions to make major
decisions for Honda inclusive of legal issues. The Board of Directors meets almost eight times
in a year. The Board of Auditors on the other hand is made up of six auditors, three of which
are from outside. The corporate auditor‟s duties are to audit the directors‟ implementation of
responsibilities in accord to Honda‟s auditing standards, auditing policies and the decisions of
the Board of Corporate Auditors.
Under the Board of Directors, the Executive Council is positioned. The Executive
Council is made up of the President and the CEO‟s as well as nine other representative
directors. The main responsibility that the Executive Council carries is to discuss important
management issues within its scope of power. This council also discusses in ahead of the
agendas that will take place during the meetings of the Board of Directors. It also functions to
deal with important global issues. The council meets approximately 27 times in a year.
The Executive Council heads the six Regional Operations Council namely each for
Japan, China, Middle East as well as all the continents. The regional operations council in
order to improve the independence of each administrative region. It also ensures quick
decision-making. They have also been established in each administrative region to discuss key
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 16/26
regional management issues within the range of authority bestowed upon them by the
Executive Council.
With the intention of further increasing customer‟s trust, Honda has created the
Business Ethics Committee and included this committee in their organizational structure. This
committee consists of directors and five corporate officers and is chaired by the Compliance
Officer. This committee specializes in solving problems related to corporate ethics and
compliance. They meet twice annually to discuss these matters. Under this committee a sub-
committee is created. This sub committee is called the Business Ethics Improvement Proposal
Line. Since Honda places great importance on open communications, this committee is set up
to accept ideas regarding corporate ethics. The Business Ethics committee supervises the
operation of the sub-committee and submits status reports to the Board of Auditors.
“The only difference between a mob and a trained army is organization.” (Calvin
Coolidge, n.d.) Having an organized structure is a vital part of every company. The strong
structure in Honda Corporation on the other hand has been a good proof that having a
structure can bring much success to the organization. Not only does it allows leaders to
manage wisely, but also becomes a guideline to employees to organize and align themselves
appropriately in order to achieve the company‟s goals.
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 17/26
5.0. Toyota: The Story Beneath
Toyota Motor Corporation was Japan‟s largest car company and became the world‟s
third largest automobile company in the year 2000.By late 90s, Toyota was already producing
5 million units yearly and had 9.8 percent of control over the global market for automobiles.
Toyota‟s founder, Kiichiro Toyoda travelled to United States in 1933 and after returning to
Japan, he started off building a prototype in his father‟s loom factory. Then in 1939, the
company moved on and started off with a research center to work on battery powerred
vehicles. The 40‟S looks at Toyota growing and producing vehicles after vehicles which were
improved as time passed by. Apart from producing those vehicles, Toyota also went on in
establishing plants, bussiness developments and facilities like the Toyota Machine and Works
Co. Ltd.
The next decade unfortunately was hit by a financial crisis. In this decade, labor
dispute occured and voluntary retirement had to take place. This however, did not deter
Toyota‟s growth. In the same decade on 1957, within a few years Toyota opened its fir st plan
in the United States; Toyota Motor Sales USA Inc. Toyota also carried out its first export of
Japanese Passenger car called Crown to the States.In the 60s, Toyota was already making a
big name in the market. 1962 marked the 1 million production of Toyota vehicle
domestically. In the same year, Toyota also managed to open up a branch in thailand; Toyota
Motor Thailand Co. Ltd. Toyota also was awarded the Deming Prize for its outstanding
achievements and improvements. By the end of the decade, Toyota was already hitting 1
million worth of sales.
The next few decades see Toyota manufacturing new and improved models to fit the
technology advancements as well as their customers taste. In year 1992, Toyota created its
guiding principles and was anoounced to the public.The hybrid model, Prius was also released
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 18/26
in year 1997 which shows the world that Toyota pays attention to its environment. By the
end,on year 1999, Toyota was already exceeding 3 million in sales overseas annualy. The
millenium opened up with Toyota establishing the Toyota Financial Services Corporation. It
was set up in order to oversee Toyota‟s finance companies all around the world. (History of
Toyota,1995)
Till now, Toyota has never stopped producing excellent automobiles fro customers
and providing a healthy competition to its customers. The reason behind this immense success
cannot only be due to its quality product but also its excellent management which keeps their
customers as well as employees happy. In order for companies like Toyota to run smoothly,
employees play a big role in such organizations. Toyota has a dopted an excellent sytem in
order for the company to run smoothly.
5.1 Toyota: Developing People
“Because people make our automobiles, nothing gets started until we train and educate
our people.” (Toyoda,n.d.) At Toyota, the Human Resource department carries out more tasks
than just managing databases and it is definitely not a role that can be outsourced. In actual
fact, since people are so connected to its management philosophy, HR is one of the most
important and powerful departments in the company. Toyota believes that the growth of
human resources needs the handing down of values and perspectives. Thus, the Hr at Toyota
facilitates much more when compared to HR departments in other companies.
Among the first things that the HR department is asked to facilitate is, commitment
and tools for stable employment. Toyota‟s most important commitment is stable employment
and letting team members know that they are the most vital resource. Thus, investigating in
team member development is a must for companies like Toyota. Toyota has also made it clear
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 19/26
that should a terrible economic disaster occur, its employees would not be laid off like back in
the 1940s. By doing so, Toyota has provided its employees with a safety net that will enable
them to continously participate in any sort of activity that will further develop Toyota.
Besides that, the HR department makes sure that all their policies and practices are fair
and consistent. Almost all companies attempt to be fair and consisten in their policies,
however, this is done differently in Toyota. At Toyota, the HR representatives do not sit and
face their computers all day long,nor do they answer calls. Representatives there often roam
around throught the company, at every department to be up to date about the company‟s latest
happenings. This is actually referred to genchi genbutsu which means going to the site of the
work done in order to understand better the company‟s situation firsthand. In order to
continously be fair and consistent, Toyota bans promotion for employees being given without
the approval of the HR department.
Toyota does not disable promotion entirely for its employess but rather give them slow
promotion through teamwork. As an organization that appreciates the long term relationship
that they have with their employees, Toyota is willing to be patient and let its employees to
grow and mature into the level of leadership that fits their capability. As a return,Toyota
expects its employees to have patience and grab the oppoturnity to learn and develop
themselves.
Last but not least, HR at Toyota develops the policy deployment employees can
continously improve their duty and solve issues by focusing it towards a common objective.
The HR department usually sets a common goal which is agreed by the higher management as
well as every team member and employee of Toyota. Each employee is also expected to have
a measureable objective that will be reviewed throughout the year. When team members feel
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 20/26
that they are valued as a long term employee at the company and that their fate resides to the
fate of the company, they work exceptionaly harder to give a better performance.
Toyota provides a model of a HR system that is real and successful. It is successful
and beneficial for both the owners of the business and for the team associates. The system
starts with the statement that people are the most vital resource and needs to be taken care of,
developed and challenged. Human resource management is one of the most noticeable and
essential department in the company since humans are the only competitive resource that
cannot be copied by any other organizations.
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 21/26
6.0 Starbucks: The Coffee Story
Starbucks became a lead in the coffee bussiness when three friends who were very
passionate about fresh coffee opened a small shop that sold coffee beans, brewing and
roasting accessories. Starbucks has recognized itself as one of the major corporate success
stories ever since its first store opened in Seattle in 1971, to its current 7,521 self-operated and
5,647 licensed stores, almost one-third of which are in countries other than the United States
operates and carries its brand name „Starbucks‟. The name „Satrbucks‟ originates from a
classic American novel which was called the Herman Melville‟s Moby Dick. The novel was
about the 19th century whaling industry.
Howard Schultz joined Starbucks after being hired by one of the three friends in 1982
and was sent to Italy for a house ware exhibition. During that, he visits Milan‟s famous
espresso bars. Schultz was very impressed with the popularity and culture that coffee‟s had
there. With that, he thought that Seattle has much potential into becoming a coffee-crazy
place. Due to its popularity, Starbucks expands beyond Seattle. It started off in year 1991 by
expanding to California. Then, in 1992 after going public, it underwent a remarkable growth
like no one has ever seen in the coffee business. By the year 1997, the number of Starbucks
outlets grew ten times more and started opening branches in countries like Japan and
Singapore. Not satisfied with its success, Starbucks soon started to venture out to make more
profit. It started serving its popular coffee at the United Airlines Flight and also distributing
whole bean and ground coffee to supermarkets. It also went on to produce coffee ice
cream.(History of Starbucks,2009)
In order to continue the company‟s success and growth now, Schultz believed that the
company has to continuously produce products which taste good all the time. For that to be
done, staff‟s at Starbucks must be trained thoroughly on how to prepare coffee the Starbucks
way.
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 22/26
6.1 Starbucks Staff
In order to adapt to the fast growth at Starbucks, leaders had to come up with the
appropriate systems to recruit, hire, and train baristas and store managers. Since giving
customers the „Starbucks Experience‟ was crucial, store staff was a vital part of Starbucks.
Starbucks' Vice President screens new candidates for positions in Starbucks by using some
simple guidelines. He says that, future employees must be passionate about coffee and must
have fun in what they are doing. (Thompson & Gamble, n.d.) At least 24 hours training in the
first two to four weeks is provided to every bartender or partner hired for retail jobs at
Starbucks outlets. These sessions includes classes on coffee history, drink preparation, coffee
knowledge for four hours, customer service for four hours, and retail skills, as well as a four-
hour workshop called "Brewing the Perfect Cup."
Those classes also teaches the Bartenders to use the cash register, weigh beans,
opening the bag properly, capturing the beans without spilling them on the floor, holding the
bag in a way that keeps air from being trapped inside, and sticking labels on the package
exactly one-half inch over the Starbucks logo. Training for beverage preparation consumed
more time as they were taught how to carry out activities such as grinding the beans, steaming
milk, learning to pull perfect (18- to 23-second) shots of espresso, memorizing the recipes of
all the different drinks, practicing making the different drinks, and learning how to make
drinks to customer specifications.
There were also sessions on how to clean the milk wand on the espresso machine,
explaining the Italian drink names to customers, sell an $875 home espresso machine, make
eye contact with customers, and take personal responsibility for the cleanliness of the coffee
bins. Future employees were also drilled in the Star Skills, three guidelines for on-the-job
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 23/26
interpersonal relations which are maintaining and enhancing self-esteem, listen and
acknowledge, and ask for help.
All the trainees attended classes for almost 8 to 12 weeks. Their training was much
detailed, covering not only the information passed on to baristas but also the details of store
operations, practices and procedures. All these details are as set forth in the company's
operating manual, information systems, and the basics of managing people. Starbucks' trainers
were once all store managers and district managers with hands-on experience. One of their
major aims was to establish the company's values, principles, and culture and to pass on their
knowledge about coffee and their passion towards Starbucks.
Each time a new Starbucks outlet is opened, it undertook a major recruiting effort. 8
to 10 weeks before opening, the company placed advertisements to hire baristas and begin
their training. It sent a Star team of experienced managers and baristas from existing stores to
the area to lead the store-opening effort and to conduct one-on-one training following the
company's formal classes and basic orientation sessions at the Starbucks Coffee School in San
Francisco.
It is undeniable that employees are one of the company‟s greatest assets. What they
say, their actions in the workplace, and how happy and content they are in their position have
an impact on the company‟s brand, image, levels of service and ultimately the customers‟
satisfaction. Employees then ultimately become the brand carriers of an organization and thus
must be given the appropriate exposure towards the organization.
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 24/26
Conclusion
Success for an organization definitely does not happen by chance. It happens when leaders are
ever willing to prepare, plan and execute tasks in their companies. Hence, any organization
that aims for success must possess a first-class management style, share a unique culture and
own an outstanding structure. Companies that were used as examples above have the best
characteristics that have help them grow in terms of profit as well as human capital. Most
budding business these days pays more attention to obtaining income which will only result
them in obtaining a temporary name and success in today‟s market. However, in order to be
listed as the one of the finest organizations in the world, and has the potential of rapidly
growing, expanding as well as obtaining profit at the same time, a company must give stress
to its corporate profile. A successful company must stress excellent values in their
organizations. These values must be a part of their image, the way things are done, and all in
all, become something that they breathe and live with everyday. Emphasizing these values can
be done by ensuring that all their employees are well taken care off. They must also give
importance towards their environment which includes the community and nature itself. A fast
and growing trend amongst successful companies today are to establish the Corporate
Responsibility department which is responsible for giving back to the community and
environment. All these actions will not only give the organization a good image, but also
create an everlasting trust with their customers. Albert Einstein once said, “Try not to be a
man of success but a man of value.” (Success Quotations, 2002)
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 25/26
Reference
Confucius (n.d.) Brainy Quotations. Retrieved from http://www.brainyquote.com/
Cranny R. (1996) The HP Way: How Bill Hewlett and I Built Our Company. Retrieved from
http://www.strategy-business.com/article/8579?gko=933e9
Einstein A. (n.d.) Success Quotation. Retrieved from
http://www.quotationcollection.com/tag/success/quotes
Fernandes. T (2004) The Quote Garden. Retrieved from http://www.quotegarden.com/
Have You Flown AirAsia, (n.d.) Who we are and What we do. Retrieved from
http://www.haveyouflownairasia.com/
History of Starbucks (2009) The Emergence of Coffee Industry. Retrieved from
http://www.mhhe.com/business/management/thompson/11e/case/starbucks-2.html
History of Toyota (1995) History of Toyota.Retrieved from www.toyotahistory-aboutus.com
Honda Worldwide: Timeline (n.d.) History of Honda Corporation. Retrieved from
www.hondahistory.com
HP History (n.d) History. Retrieved from http://www.hp.com/hpinfo/abouthp/histnfacts/
Idris, F. (n.d.) Applying the rigid flexibility model in a service setting: A case-study of
AirAsia. Retrieved from http://www.poms.org/conferences/cso2007/talks/43.pdf
Intel Microprocessor Quick Reference Guide, (n.d) Microprocessor History. Retrieved from
http://www.intel.com/about/companyinfo/museum/archives/index.htm
Management by Objective. (n.d.) In BusinessDictionary.com Retrieved from
http://www.businessdictionary.com/
7/28/2019 In Search of Excellence New
http://slidepdf.com/reader/full/in-search-of-excellence-new 26/26
Minton P. (2007) The HP Way
(Review of the book How Bill Hewlett and I Built Our Company). Compass Points
Book Review. Retrieved from
http://www.strategyletter.com/cp_0798/BookReview.php
No frills. (n.d.) In Merriam Webster Online Dictionary. Retrieved from http://www.merriam-
webster.com/
Paxton, P. (n.d.) The Quotations Page. Retrieved from http://www.quotationspage.com/
Press Release, (2002). AirAsia & GE Engine Services sign major engine maintenance
agreement worth over US$20 Million. Retrieved from
http://www5.airasia.com/site/en/pressRelease.jsp
Tony Fernandes Legion D‟ Honneur, (2000) AirAsia Usage. Retrieved from
http://www.f1ezine.com/articles/feature
Whetten, S. Godfrey, D. (1998). Technology of Intel. Retrieved from
http://www.intel.com/technology/itj/