Participative Leadership Style in Toyota’s China Division for Higher Performance and Effectiveness

The leadership behavior adopted by Toyoda was a more participative leadership, as suggestions were taken from the employees regarding business operations.  These employees were involved in making organizational decisions.  Toyoda gave more importance to each and every department in its China division.  The managers of each and every deprtmetn have to report to an executive vice-president who made decisions.  It was not necessary to wait for corporate approval from the Toyota headquarters.

This was a more of a kind of bottom-up management strategy.  It was a very positive leadership style as the lower level management are making important decisions about the department.  Hence, the performance and the effectiveness would be higher.  Considering the power-based leadership style, as the lower level management makes important decisions about the department, it could be considered as a democratic leadership style.  There is a fee flow of communication and flow of ideas from the lower level management.  The lower level management also participates in making important decisions.

Inaba realized that the Toyota’s US unit was not making enough profit.  He felt that a bottom-up kind of decision making was required.  He then released profit and expense information to the sales personnel so that they could understand their financial performance better.  In order to make greater profits, the manager gave price cuts to the rental companies.

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This improved the sales of the company.  According to the Tannenbaum and Schmidt Leadership Continuum, the decision-making process was given greater freedom by the company and hence was subordinate-centered leadership.  The manager was gave the subordinates the problem asked them ways of solving the problem and providing certain boundaries within which the decision could be made.

Gravis changed his organizational structure to suit the leadership style.  He began to shift the mangers and other staff to more appropriate situations.  He adopted a more task structure kind of leadership style, in which the objectives, the work to be performed and certain situational factors, are marked.

Starbuck give a lot of importance to the employee values and beliefs which in turn give rise to attitudes.  Attitudes in turn give rise to behavior.  Starbuck is known for its employee who provides a comfortable atmosphere at their coffee shops.  The company adopts a very aggressive business policy of combining with local firms that do understand the local environment or market, and trains their manager in the company headquarters for about three months.  If he suspects that the managers do not posses the right values and beliefs, he would not collaborate with them.

Herman Uscategui overheard one of the managers of a local firm make an uncomfortable racial remark.  He soon decided against working with that firm as he felt that the managers did not have an appropriate belief or values that could create a suitable attitude.  In turn the behavior of the managers would not be suitable for Starbuck to achieve its objectives.

The Starbuck administration is trying to create a positive attitude and behavior of its employees by generating appropriate values and beliefs in its employees.  The company gives a lot of importance to values and beliefs.  It adopts good measures to protect the environment, conserve energy and recycle material.  It supports an internal fund to help the employees that are in need.  The employees can also provide feedback about certain management decisions.  They can also provide more information of any employee action that would be in conflict with values of the company.

Reference:

Cresto, S. C. and Cresto, S. T. (2006). Chapter 5: Influencing, Modern Management, (10th ed), New Jersey: Upper Saddle River, pp. 299-322.

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