a case study soichiro honda

Planning: “There is a Japanese proverb that literally goes ‘Raise the sail with your stronger hand,’ meaning you must go after the opportunities that arise in life that you are best equipped to do. ” * Soichiro Honda “Planning helps in forecasting the future, makes the future visible to some extent. It bridges between where we are and where we want to go. Planning is looking ahead. ” * www. wikipedia. org

Soichiro Honda, a simple apprentice boy, able to create the multi billion dollars business empire that the Honda Motor Company is today, what were the strategies and planning that he implemented that got him success, and took his small business into each and every part of the world. Honda always believed that knowledge is the key to success in business and that is why he always appreciated ideas of each and every one in his company.

As an apprentice automobile mechanic till 1936, Soichiro Honda was able to study the automobile industry from the basics, acquiring great deal of knowledge about the workings of machines, and the common faults in automobiles. And then when he was having difficulty making piston rings, he understood he needed a higher knowledge, and he went to Hamamatsu High School of Technology to acquire adequate knowledge but not a diploma. To prosper in business therefore, it is important to have sufficient knowledge of your industry, which you have to endure to update to remain abreast of modern trends.

Another strategy that Honda executed in his business, which made his business hugely successful, was to enlarge it into foreign lands. The US market allowed it to explore a huge market with boundless purchasing power. This enabled him to sell much more of his motorcycles than would have been possible if his business had remained in Japan only. Another big hit was when everyone thought the US market was not potential to sell motorcycles, because of the low image of motorcycles then in the US, the Honda Motor Company thought just the opposite.

And in just five years Honda had achieved their dream in the US. They had replaced the negative image of motorcycle with that of fun and excitement, making millions of Americans happily desiring to own theirs. Another strategy that has always been very much close to the Honda Company is setting big and achievable goals. After the “Cub” when the “Super Cub” was ready to be produced, 30,000 Super Cubs a month was predicted to be sold which was much more than the then prevailing market of 20,000 per month for all two-wheelers.

As most of the American customers were the “black leather jacket” customers the Honda Company had also promoted sales of larger and more of luxurious bikes as that was best suit as per the then market requirement of the U. S. Another strategy of getting publicity and popularity was by winning the various races such as “Isle of Man” races in 1961, then 1965 Formula I, 1996 Britisher Jack Brabham, who got eleven victories in Formula II, but as and when the company was done with its goal i. e. aining popularity they withdrew all its cars and motorcycles from the various races. Mr. Soichiro Honda along with Mr. Fujisawa have made it possible for Honda to come to a stage where it is today, from such a small scale business by way of setting big achievable goals and all the various kinds of flabbergasting and stunning ideas and strategies and planning to achieve such targets. Planning Process Organizing: “If you hire only those people you understand, the company will never get people better than you are.

Always remember that you often find outstanding people among those you don’t particularly like. ” * Soichiro Honda Organizational strategy is closely linked to market strategy. When a company first starts to move into the global marketplace, it should decide how it will behave in various markets. Companies with a multinational strategy tend to improve a decentralized organizational structure. This structure drives decision-making down to lower-level organizations.

Now, Honda is a company that has developed a multinational strategy and a decentralized organizational structure, whereby it spreads the control of their organization uniformly over all of their departments and it believes that no one department should have enough power to run the company. The executive council is at there at the top of the organizational structure. The decisions that the council makes are trying to maintain that the company keeps on making a high quality product and also keeps innovating new ideas. Honda has a very good horizontal lay out of their organization.

The various segments are laid out in such a way so that there is very little distance between top management and the lower level employees, which helps the employees to put up their ideas to the higher level of the organizational structure. Also Honda makes sure that there is an existence of “Respect for the Individual” with respect to various aspects such as trustworthiness among each other, equality, i. e. whereby all the employees are treated equally and then there are many other factors such as encouraging the employees to come forward with innovative ideas etc.

Then another thing that the company makes sure is that there is “Joy of Buying”, “Joy of Selling” and “Joy of Producing” – the three “Joy”. Overall Honda Motor Company had a well-designed Organizational Structure which motivated its employees and also brought a feeling of “Respect” among the employees. So Organizational Structure has also played a great role in the development of Honda from a small firm to the ruler in the field of automobile in the world. Leadership: “Many people dream of success.

To me success can only be achieved through repeated failure and introspection. In fact, success represents 1 percent of your work which results only from 99 percent that is called failure. ” * Soichiro Honda Mr. Soichiro Honda is a classic leader. He was a simple man and people shadowed him as he encouraged them. He was a person with dream and passion. He created the dream – a view of the future that excited people and directed them toward the goal. His leadership qualities start right from the very beginning of the invention of his dream.

Honda possessed all the qualities that a leader should. In 1937 when Honda wanted to produce Piston Rings and was lacking out of knowledge and to make up that lack of knowledge when he joined Hamamatsu High School of Technology he was very much focused to the subjects only which mattered to him and not anything else. He had refused to even take up any examination for the diploma saying “A diploma was worth less than a movie ticket; at least the ticket guaranteed you got into the theatre. ” Here it shows the quality of vision and focus that is inherent for a leader.

Then Honda started producing the 3 hp (98CC) bikes and was selling almost a thousand of them a month but was unable to have a proper cash flow of such sales and even then we see that Mr. Honda was more concerned about the product and about its engineering and not profits, this shows his customer oriented thinking which is another essential to become a good leader. Then comes where Honda did act as a proper guide to the employees and this can be observed from his characteristics as “Mr. Thunder” where he shows his elderliness if required to the employees to correct where he finds them to be wrong.

When Honda started producing four wheelers the production was having some problems and Mr. Honda’s approach had always been “to develop a special engine to solve each specific problem. ” So as a leader he takes up the job to attend each problem in a unique way. One of his best leadership qualities was that he treated all his employees equally and even he shared the same cafeteria and the same office as that of his subordinates. Along with it he also encouraged all the employees to come up with new innovative ideas and he made sure that the ideas are applied and were encouraged until a final decision was reached.

This leads to motivating the employees and also growth of the company. As a leader Mr. Honda himself has also done many creativities and one of them is “idea contest” whereby the employees were encouraged to bring in new ideas and the best one be rewarded and this kind of innovative ideas of Mr. Honda is very much motivating to the employees which makes him a good leader. In his company basically there were no employees as such or rather there were no superiors and subordinates but all of them were regarded as an “Associate” of the company which in turn brings a feeling of respect among the employees and Mr.

Honda always believed in “Respect for the individual” which again is a very essential to be a good leader. Mr. Soichiro Honda was a true trailblazer who had the ability to build a healthy working atmosphere within the group. Certainly, team work success does not happen without hard work of a leader. Mr. Honda focused on hard work and activities of a team for achieving the desired goal. He had set clear goals and everyone accepted them. Mr. Honda demanded concrete results, and he knew how to grasp these results.

He learned to see failures as necessary steps toward success. He instilled in his so called associates the drive to learn without fear of failure and build the road to success. Leadership Skills of Mr. Soichiro Honda Controlling: “I could not understand how it could move under its own power. And when it had driven past me, without even thinking why I found myself chasing it down the road, as hard as I could run. ” * Soichiro Honda “Controlling is one of the managerial functions like planning, organizing, staffing and directing.

It is an important function because it helps to check the errors and to take the corrective action so that deviation from standards is minimized and stated goals of the organization are achieved in desired manner. ” * www. wikipedia. org Coming to the type of controlling the Honda Motor Company follows basically a mixture of two types of controlling and they are Feedforward Control and Concurrent Control whereby before it launches any product in the market it checks for the defects(if any) and it also involves checking raw materials and also making sure that efficient personnel are appointed.

One of the most important part was Total Quality Management whereby all over quality of the products are monitored. When it comes to controlling the employees of the company Mr. Soichiro Honda controlled all the employees by mixing with them and working with them. The advantage of this type of controlling is that the employees did not even feel that they were being controlled but at the higher level Mr. Honda was doing his job. One of the examples we can take from the case whereby Mr.

Honda takes the tool from the person tightening the bolt wrongly and tightens it in a right way and then shouts on him for tightening it in a wrong way. All together Mr. Honda had always been able to have an efficient control over the organization structure and the company. Globalization: “Globalization has changed us into a company that searches the world, not just to sell or to source, but to find intellectual capital – the world’s best talents and greatest ideas. ” * Jack Welch

Honda stepped in for globalization since the time it realized that the key to success was “lighter, more efficient engines, getting more power from more thorough combustion. ” It started being globalized since 1959, when it won the Manufacturer’s Team Prize and also the first five places at the “Isle of Man” races in 1961. In mid-1959 Honda and Fujisawa thought that it was the high time that the company should step forward into the world market actively and with this the American Honda Motor Co. as formed in the month of June’1959 with the headquarter being at Los Angeles and with its own separate executive vice president being Mr. Kihachiro Kawashima. The company approached the Ministry of International Trade and Industry (MITI) for currency exchange but Honda was refused and had to start its operation in U. S. with a very small capital. Then they could not be very much successful in the U. S. market until they had started producing the larger and more luxurious motorcycles, which was the then market in the U. S.

These set of customers are known as “black leather jacket” customers. Then Honda stepped into the four-wheeler segment and by 1980 Honda had become the fourth largest maker of American cars. In December’1982 Accord started rolling out from the plant that was made in the U. S. and it had become a big hit in the U. S. The Accord was very much similar to the, the then premium car Mercedes-Benz 190E whereby they had a difference of just 2 points when they were tested for Road and Track, but however there was an almost $10,000 difference in the pricing.

Then gradually in the 1990s the company was awarded with so many global honours and achievement such as Civic winning the “Japanese Car of the Year Award” in 1992 and the in the year 1992 Accord won the “Motor Trend’s Import Car of the Year Award” and so on. All these achievement triggered Honda to spread out worldwide and capture the world market with the biggest asset it already had and i. e. a reputation in the World Market. Honda was known in the world market for its quality and pricing.


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