Principles of Management Section 410

The Power of Dreams

Introduction to Honda

Honda is a Japanese multinational corporation primarily known as a manufacturer of automobiles and motorcycles.

Honda was founded on 24th September 1948 by Soichiro Honda and Takeo Fujisawa.

Management involves coordinating & overseeing the work activities of others so that organizational goals can be accomplished efficiently and effectively.

Management of Honda

•Planning

Honda’s management has established the following goal for its organization. “Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality, yet at a reasonable price for worldwide customer satisfaction.”

Honda develops flexible plans, where they anticipate possible problems and solutions to those problems. Honda involves it’s staff in different types of planning. 1. Product Planning 2. Business Planning

Honda develops many plans and then carries out extensive brainstorming sessions where they first set objectives and discuss ways to achieve those objectives.

Management of Honda •Organizing Organizing is a crucial function to facilitate completion of any plans. Honda placed a team of specialists for various centers across the world, who were assigned specific tasks to accomplish goals.

•Leading Initially Soichiro Honda & Takeo Fujisawa used forceful personal leadership but later Mr. Takeo introduced “team leadership” where the boardroom system was used.

•Controlling Honda uses the “soft” approach where workers are put in complete control of machines. Human control is necessary where humans monitor what machines do.

Strategic Management

Step 1: Identifying Honda’s current mission, goals and strategies

“Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality, yet at a reasonable price for worldwide customer satisfaction.”

•“Accelerate our effort to strengthen the core characteristics that make Honda unique to accomplish further growth “ part of speech by Honda’s president.

•Another goal is to reduce total hydrocarbon emissions by developing “green” vehicles

Honda’s current global strategy is to put cost-effective plants in areas that best meet the needs of local customers.

Honda’s mission statement

Honda’s current goals

Honda’s strategy

Strategic Management

Step 2: Doing an external and internal analysis of Honda (SWOT)

Strengths

•Innovation •Market share leadership •Strong brand equity •Unique products

Weakness

Opportunities Threats

•High cost structure •They depend on profits coming in internationally rather than domestic profits

•Emerging markets •Expansion abroad •Demand for “green” cars

•Economic slowdown •External changes (government, politics, taxes) •Lower imports

Strategic Management

Step 3: Formulate, implement strategies and evaluate results

Honda creates it’s plan, for instance Honda recently revealed the “2010 Hybrid Insight Honda” and it plans to sell ½ million hybrid vehicles by 2012.

Honda is now implementing this plan by advertising & marketing all over the globe to increase sales of the new car.

In 2012 Honda will evaluate it’s results by comparing the desired state with the current situation.

Strategic Management Step 3: Formulate, implement strategies and evaluate results

Honda’s Annual performance cycle helps

them to formulate implement strategies and

evaluate results.

Human resource Management HRM means employing people, developing their resources, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.

Honda company employs 181876 workers. Soichiro Honda had the clear aim and created a trustworthy atmosphere in the company.

His employees soon came to understand that poor performance would not be tolerated. Due to his anger the employees called him Mr. Thunder, but they loved him.

The Human Resource Managing Department at Honda is given specific instructions on how to employ the best possible workers.

Human resource Management The objective of managers is to build relationships in which workers would see themselves working with the manager, rather than working for a manager.

Human resource management assume that if employees are happier at work the production would increase. The owners treat others as equal and often work in a workshop with employees.

Employees – an asset of the organization

Motivating Employees

Motivation can be defined as the process of arousing, directing, and maintaining behavior toward a goal.

Soichiro Honda placed human initiative and attention to all workers on the first place. He tried to create a better environment for his employees, attract specialists and motivate them to do their work in the best possible way.

Motivating the employees was one of the main objective of the human resource management at Honda.

Mr. Honda understood that encouraging his worker’s personal development, their wish for self-actualization will bring him success in business. He instilled in his employees the drive to learn without fear of failure, having built the road to success.

Motivating Employees

Mr. Honda paid much attention to experimental work and did not accept attempts to control him or his corporation via the traditional caste system.

Managing Operations “Taking an innovative approach to develop new efficiencies in managing our operations through their services” said Mike Wallace, manager of Honda’s MRO purchasing.

An example of the way Honda manages operations is when they use tracking software to monitor when motors and other machinery go into service. This has brought significant cost savings to Honda, making Honda very efficient.

Assembly Lines

“In today’s competitive market, you must keep up with the latest technology, but more importantly you must take care of your customers." stated Honda’s managing director

Honda is keeping up with technology like creating “green” cars, and wants to maintain profits but however it’s main focus is to provide excellent customer service.

Managing change & innovation

Honda’s current situation •According to this article, Honda ranked #1 on ACEEE’s “greenest vehicles of 2010”

•ACEEE is the American council for an Energy Efficient Economy.

•Honda Civic GX natural gas car earns the top spot for the seventh year straight.

•This shows that Honda is doing it’s best to keep up with the current social trends, one of which is being “environmentally friendly”

•Honda is going “green” inorder to satisfy the needs of those customers who are trying to reduce their carbon footprint on this earth.

•By producing such cars Honda is able to prove that it is a thoughtful organization.

Honda’s current situation •The American Honda Motor Co., Inc reports that the sales of the American Honda was up by 15.6 %

•This is a decline of 19.5% compared to 2008 results.

•The top three best-selling cars were Accord, Civic and CRV

•As John Mendel, the executive vice president of American Honda says “the good news is that the market appears to be stabilizing and we have more reasons for optimism in 2010.”

•Honda’s current sales have declined but not as drastically as other car companies, who were badly affected by the economic recession.

•Honda hopes & predicts that it’s sales will increase in 2010.

Honda’s current situation

•Honda has recently donated $300,000 to Haiti

•Honda is working with the Red Cross inorder to supply water pumps and generators to Haiti

•The major advantage for Honda in this situation is that they are getting good advertisement and can reestablish Honda company’s name as a thoughtful organization.

•Honda is also offering special gifts for their customers and any cash earned on those gifts will go to the Haiti relief fund

•We are all aware of the catastrophic earthquake in Haiti

Recommendations • In order to increase motivation among employees they should provide incentives such as badges for employee of the month.

•To reduce employee turnover Honda should have a strong organizational culture. They can enforce this by holding annual seminars for employees.

• In order to maintain a strong customer relationship and get constructive feedback they should create online questionnaires and chat rooms.

The rules that had been set by Mr. Honda and Mr. Fujisawa need to be modified according to the changing times as Honda is becoming more globalized.

• They should be able to adapt to different styles of management as each country has its own management styles.

References Following are the resources which helped us in analyzing and obtaining information:

•Google search engine helped to surf for information about Honda

•The Principles of Management textbook enabled us to understand various management terms and concepts.

•The Honda Book of Management provided information about the company’s management structure

•Articles from Bangkok Post enabled us to analyze the current situation of Honda

•The Honda company’s website contributed information about company’s background and recent activities