Overview Of Honda Organization Model

Honda is a leading car manufacturer and the world’s leading maker of motorcycles. Founded in Japan in 1948, Honda operates on five core values: Dreams, Joy, Challenging Spirit, Passion, and Respect. Honda’s leadership has been greatly influenced by founder Soichiro Honda, who was an exemplary leader and remains a dominant example to the company. Honda was a person with vision and passion, who inspired others to follow his lead. He created a vision: a view of the future that excited people and directed them toward the company goal. When a clear vision is communicated to the company, a strategy and purpose becomes clear, and a concerted effort towards reaching logical goals becomes possible.

Honda’s management style differed from Japanese business traditions in that he emphasized individual achievement rather than company harmony. He hired creative people and promoted research that resulted in technological innovation. He worked alongside his employees with an enthusiasm that inspired them to perform better. One of Honda’s former presidents, Takeo Fukui, stated, “‘It is important for Honda to create many Soichiro Honda’s.’ That doesn’t mean Honda workers should imitate the founder, as the situations they face are often different from those he faced during his lifetime. Rather, it means that when a judgment call is necessary, a worker should ask himself or herself, ‘If I were Soichiro Honda, what would I do?’”. At Honda, the team leader is not a foreman but a motivator, guiding rather than ordering. Teams are organized according to specific functions of various sizes. Team leaders fill in for absent workers and train new employees. There is no reserve pool for absentees. Team leaders come early to check reports and review the previous shift's problems, then hold a short team meeting prior to production. All defective parts are reported by the team leader to the source who created the defect. Team leaders also help anyone falling behind. Team leaders are the breeding ground for future managers. Job rotations reduce boredom, increase morale and raise both understanding and quality. Honda has instituted a practice called waigaya, which roughly translates as “noisy-loud.” Waigaya refers to an informal session in which participants put aside rank in order to address the problem at hand. Any employee can invoke a waigaya, and executives must participate if called on. Waigaya encourages employees to question the status quo. Although waigaya may seem too freeform to be productive and may appear to lack a leadership component strong enough to produce real results, these meetings actually have an organizing framework that, at least in theory, ensures their success. According to Rothfeder (2014), waigaya has the following rules:

  1. Everybody is equal in waigaya, and all can express their thoughts with impunity.
  2. All ideas must be debated until they are either proven valid or rejected.
  3. Once a person shares an idea, he or she doesn’t own it anymore — it belongs to Honda, and the group can do with the idea what it will.
  4. At the end of waigaya, decisions and responsibilities are generated — a precise list of who is to do what, and by when.

At its full potential, the waigaya serves as a laboratory for innovation and has proved its worth several times in history of Honda. The success of Honda has not resulted from senior management coming up with all the answers. Salesman, cleaners, and those working on the manufacturing floor all contribute to how the company is run and thereby influence its strategic position. This ability to move ideas from the top to the bottom and back again in continuous dialogue is highly valued by the organization. Honda’s decision making is characterized by the “Ringi” system, where decisions are passed based on a consensus of all the employees in a department or even the entire organization.

Honda encourages its people to have a strong voice. They believe it is not possible for managers to control thousands of workers from above. It is the workers who must control themselves. Workers know their job best and are encouraged to think of new ways to strive for improvement. The collective mind of thousands of workers is utilized by smart management. Individualism is encouraged and non-conformity is stressed. People are free to take risks. Teamwork and individualism go hand in hand.

Transformational Leadership Exhibited by Honda “Transformational leadership involves inspiring followers to commit to a shared vision that provides meaning to their work while also serving as a role model who helps followers develop their own potential and view problems from new perspectives. Transformational leaders heighten followers’ awareness of the importance of certain outcomes while increasing their confidence that those outcomes can be achieved”. The leadership type Honda most aligns with is that of a transformational style. In his own personal pursuit for innovation and creating a superior product, Soichiro Honda has unwittingly entrenched these values into the Honda Motor Company. The Honda UK case supports the notion of a transformational leadership style, stating (identifying - if not direct quote) that 87% of employees hold true the company’s values and principals. This supports the argument that Honda had a strong transformational leadership style as he pulled his employees in line with his own personal vision. In the interests of helping his employees look beyond self-interest, Honda’s values are evident in the operations of the Honda Motor Co. today through the Zero-Level Emissions Vehicle (ZLEV) engine. This epitomized the transformational leadership origins of Honda through an attempt to create an environmentally friendly engine. “Not only does this provide employees with a sense of self-fulfillment in what they are trying to achieve but also contributes to raising awareness and a commitment to greatness that stems from creating a superior piston in the early days of Honda’s work”. The individualized consideration aspect of transformational leadership is displayed by team leaders who help anyone falling behind.

Differences between Honda’s Leadership Style and the Transformational Leadership Model Despite being a transformational leader, Soichiro Honda, also displayed use of the corrective methods of a transactional leader, such as severe criticism and punishment when a designer did not meet his expectations. He was known to scream, yell, throw things and hit engineers.

People’s immediate reaction was that they could not take it anymore and wanted to quit. However, soon they realized his intention was simply to make a point about how important vehicle design was and how rigorous they must be at every step. Although extreme, this was done to instill his values in all the engineers, not just the person at fault. Along with transformational leadership, laissez-faire style environment (hands-off leadership) is also observed in some areas like the waigaya. Also, at Honda, managers are told to solve their own problems, not to apologize to superiors for problems.

We believe the organization’s model makes sense because those who worked for Honda harbored no resentment, as they understood his passion for perfection and his commitment to safety. This was only possible due to the trust of Honda as their leader and his commitment to the vision of the company. Waigaya has also proved to yield great results for the company in terms of delivering new products and ideas, furthering our belief that Honda’s model works.

03 December 2019
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