Organizations adopt values and beliefs, which are then shared by all employees and business associates. This aspect helps in the harmonization of goals, objectives, and mission of an organization in its different operating units. This paper discusses the Honda Motor Co. Ltd’s organizational culture.
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The company was established in 1948 in Japan before growing to become a global organization in manufacturing automobiles, motorbikes, and other powered products including airplane engines.
Honda’s employees and customers are from diverse backgrounds ethnically, professionally, and in terms of nationalities. This aspect forced the company to adopt an organizational culture emphasizing on the importance of people, viz. employees, customers, and the society in contributing to its success.
The constituents of a firm’s philosophy define its organizational culture. This assertion suggests that organizational culture binds all components and sub-components of a firm to form one harmonious system having common goals and objectives albeit being constituted of differing components.
This paper discusses the Honda Company’s organizational culture and it evaluates its impacts on employees, society, and the organization (Honda Company). The objective is use the case of Honda to lay out a practical benchmark on the impacts of organizational culture on enhancing a company’s success.
Brief history of Honda
Honda engages in global business activities. It operates in China as a joint venture together with Guangqi, the Honda China, and the Dongfeng Honda. The company (Honda Motor Co. Ltd) was established in 1948. It started by manufacturing engines for bicycles. Later it engaged in manufacturing of motorcycles before progressing to manufacturing automobiles and other powered products such as generators, marine equipments, and garden equipments among others.
The company has been leading in manufacturing of motorcycles coupled with internal combustion engines since 1959. It has a production capacity for internal combustion engines in excess of 14 million units per year. In 2013, in the US market alone, the company sold 1,525,312 units of motor cycles.
Honda Motor Co. Ltd ventured into the robotics industry and produced its first robot – ASIMO, in the year 2000. It acquired the tag of the second biggest automobile manufacturer in Japan in 2001.
According to OICA Correspondent Survey (2012), by 2011, the company was 8th largest manufacturer for automobiles in the globe behind “General motors, Volkswagen group, Toyota, Hyundai Motor group, Ford, Nissan, and PSA” (p.1). In 2011, it produced 2,909,016 units of automobiles, which rose to and 4, 110, 000 units in 2012 (OICA Correspondent Survey, 2012).
In 2004, the company evidenced its ability to exploit the aerospace industry through the release of its GE Honda Aero Engine. This was followed by the release of Honda HA-420 Hondajet engine whose production started in the year 2012. In 2013, the organization invested more than 5.7 percent of its total revenues in further research and development activities. Therefore, it still seeks to captures more market share and increase its production capacity for different product lines.
Honda’s organizational culture
In its philosophy, which was developed in 1956, Honda Motor Co. Ltd outlines two main principles encompassing its fundamental beliefs. According to Furlan (2002), these are “respect for individual and ‘the three joys’” (p. 36). Initiative, trust, and equality constitute the values in the organization’s belief for respect of individuals.
The second belief – ‘the three joys’, borrows from the first belief. It focuses on the creation of satisfaction amongst the organization’s stakeholders, viz. customers, society, and employees. This aspect defines the organizational culture for Honda Motor Co. Ltd to constitute appreciation and value for all people in driving its success.
Team orientation and how Japanese culture affected evolution of Honda
Since the establishment of Honda Motor Co. Ltd in 1948, the organization has been pursuing the strategy of remaining competitive amid the sophistication of the business environment dynamics. In a bid to acquire sustained growth in an environment characterized by intense competition from rival organizations such as Toyota, Hyundai Motor Group, and General Motors among others, Honda Motor Co.
Ltd pays incredible concern to enhancing competitive advantage through creativity and innovation. The company holds that this aspect occurs when people are organized in the form of work teams to encourage knowledge sharing (Furlan, 2002). This understanding has fostered the development of teamwork-oriented, creative, and innovative work force for the organization across its global manufacturing plants.
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Sticking to one effective organizational culture inspired by the Japanese culture accounts for continued growth of Honda Company since its inception. The culture of people of Japan encourages the building of relationships amongst people (Chua, 2004).
Borrowing from the culture, Honda’s culture entails the embracement of the diversity of individuals in a bid to avoid fragmentation of the organization’s employees into groups defined by their respective cultural affiliations.
In fact, the company believes that future success through innovation and creativity will emanate from the inclusion and engagement of a diverse work force. This aspect reflects the Japanese culture of insisting on building mutual relationships amongst different people in society (Chua, 2004).
The signs of the culture
In an attempt to evidence appreciation and value for all people in driving organizational success as the culture for Honda Motor Co. Ltd, it is necessary to consider the meaning and elements of organizational culture. According to Zahidul et al., (2011), organizational culture embraces the “shared basic assumptions that an organization learnt while copping with the environment and solving problems of external adaptation amid internal integration” (p. 5901).
Such assumptions teach all the work force of an organization the most ample procedures of seeking solutions to the experienced challenges. The beliefs also bind different elements in an organization into one harmonious major component, which is defined as ‘systems’ in the organizational systems theory.
Organizational culture defines the main operational strategy for an organization. For Honda Motor Co. Ltd, this strategy involves the utilization of people as a source of competitive advantage by ensuring that all stakeholders are happy with the organization through ‘the three joys’.
In an effort to ensure that all stakeholders for an organization are focused to common goals and objectives, it is important that they subscribe to a common way of thinking, interactions, values, and norms (Adel et al., 2007).
Organizational norms, values, and the way of thinking define an organizational culture, which should align with the business of a given firm. Organizational culture elements constitute some basic assumptions that when adopted and observed by all the stakeholders of an organization, especially the diverse workforce, can aid in enhancing the success of a company.
Stemming from the above arguments, the signs of organizational culture are incorporated in a company’s values, norms, and beliefs. These signs are integrated in an organization’s philosophy statement. In the philosophy statement for Honda Motor Co. Ltd, norms such as respect for people’s diversity and conducting business in a manner that ensures that all people share the benefits of Honda Company are emphasized.
In particular, the company states that its goal is to “provide joy for those who buy our products and produce our products” (Furlan, 2002, p.37). This aspect reflects the culture of appreciation of people as the most important resource that the company has for success.
The culture is also reflected in the principle statement. The company states its principle as, “In maintaining an international view-point, we are dedicated to supplying products of the highest efficiency, yet at a reasonable price for worldwide customers’ satisfaction” (Furlan, 2002, p. 38).
Here, the focus is on customers, which the organization maintains they are the cores reason for its existence, as part of its norms shared by various Honda associates. Considering the values and beliefs of the company in social corporate responsibility, it becomes even more evident that the culture of the company revolves around delivering value to people.
Honda Motor Co. Ltd emphasizes that is has an additional obligation to reduce the unintended impacts of its products on all people, both its customers and those affected by their consumption or society.
Drivers of the organizational culture
Trust, initiative, and equality are the three main pillars driving the culture of respect for individual in driving organizational success at Honda. From the perspective of equality, Honda Company stipulates that the norm of respect for individuals implies, “we recognize and respect individual differences in one another, that we treat each other fairly and that we establish relationships built on mutual trust” (Honda, 2014, par. 2).
Allocation of opportunities available in the company is based on individual capabilities, but not on sex, race, social economic status, nationality, age, or educational background (Furlan, 2002). This aspect implies that people working and interacting with Honda need to see the company as an organization embracing contribution of people in its success only through differences in individual capability and talent potential.
Through trust, Honda develops the ability to build its culture. The company creates trust by insisting on the need for people to help others where they are deficient, welcoming help where necessary, and sharing knowledge amid the demographic differences amongst employees. Through the culture’s driving aspect of initiative, Honda Company ensures that people are not bound by their preconceived arguments and ideas.
Rather, they require thinking in a creative and an innovative manner, which is driven by their own initiative and judgment (Furlan, 2002). Most importantly, they need to appreciate and understand that their initiatives match the company’s responsibilities and objectives, but not their individual differences.
Impacts of the organizational culture
Honda Company is a global organization. This assertion suggests that it employs and does business with people from diverse backgrounds. For instance, although originally established in Japan, the company has production units in China, India, Spain, Italy, UK, Belgium, and France among other places. Through the culture of appreciation and value for all people, the organization has been in a position to reduce challenges attributed to cultural diversity differences.
The perception that the company is Japanese does not reside in the mind of the diverse number of employees and consumer of the products offered by the company in the global market. This assertion explains why Honda has taken a significant lead in the automobile, motorcycles, and other powered products markets since 1959.
Appreciating that the only reason that Honda employs people is due to their contribution in enhancing the success of the company through technical, creative, and innovative participation in its operations makes the culture beneficial to the organization. Since the company does not recognize the demographic differences of people as criteria for employment, individual differences do not influence innovation and creativity of the organization.
In fact, the company celebrates high levels of knowledge sharing between various units irrespective of their location across the globe (Furlan, 2002). Through the organizational culture, Honda Company disseminates information coupled with knowledge across all functional units. This aspect implies that through integration of people’s diversity, knowledge sharing provides the mechanisms of enhancing both current and future success of Honda Motor Co. Ltd
Honda Motor Co. Ltd recognizes employees as important assets for enhancing its success. Recognition of the value of people for an organization prompts companies to invest in human capital management with the chief objective of “responsibly attracting, developing, and managing a firm’s biggest asset – people” (Bowles & Gintis 2007, p. 75).
This aspect underlines the reason why Honda Company invested more than 5.7 percent of its total revenues in research and development in 2013. Through the culture of respect for people as the most important source of Honda’s success, people feel valued. Consequently, they get motivated to work hard and effectively to maintain a positive relationship with the company.
Motivation and commitment of employees develops when there are no conflicts between employees and organization or employees and employees. In the context of Honda Company, its culture emphasizes on the existence of no difference amongst its employees. This aspect helps in building the belief that the organization trusts the capabilities of all employees across racial, sexual, age, socio-economic status, and nationality divide.
This aspect helps to eliminate perspectives of superiority and stereotyping of some groups of employees defined by a given demographic characteristic. Hence, allowing employees to communicate freely with other employees at the work places. In the process, knowledge sharing becomes possible, with the impact of fostering both work team and individual career and professional growth.
Products manufactured by an organization are consumed in an environment dominated by people who may be affected positively or negatively. Honda Company is aware that while its products are of benefit to the society in terms of improving their mobility, they also present challenges such air pollution and accumulation of other wastes related to their use (Furlan, 2002).
This aspect explains why the company believes in its culture of appreciating the value of people in its success, and thus it needs to ensure that its products deliver joy to society.
Joy for society immensely concerns Honda Company. In a bid to create this joy, the company endeavors to manufacture products, which only respond to societal needs (Furlan, 2002). Through the organizational culture for Honda, the society feels recognized and valued.
In return, the company is assured that it has trustful relationships with the society in which it operates globally. Consequently, Honda Motor Co. Ltd’s culture has the impact of creating trust between the organization and society.
Changing the organizational culture
System approach is one of the mechanisms of analyzing the operations and functioning of an organization. The approach entails considering an organization as a unit composed of different sub-units bound together and working harmoniously to constitute a single whole (Ackoff, 2010).
In case of loose bonds binding the sub-units, an organization cannot achieve its aims, objectives, missions, goals, and values as spelt out in its philosophy. This assertion holds due to organizational conflicts and misalignment of goals for each element.
The culture adopted by Honda Motor Co. Ltd achieves the concerns of systems approach for operations in an organization, which is highly utilized in Japan. The approach is pursued by organizations elsewhere in the world seeking to deploy the Japanese organizational models (Meadows, 2008).
Although the culture can be changed, the company may experience problems, especially now that global organizations migrate from the production-based system of operation to service-based systems. Service-based system appreciates roles of people in enhancing competitive advantage of an organization.
The central pillar for success of an organization depends on the ability to create a homogeneous organizational culture. Such culture constitutes shared values and beliefs that bind different elements of an organization together. Honda Motor Co. Ltd appreciates that it operates in a global market characterized by people from diverse backgrounds.
Hence, it establishes a culture appreciating people and their value in enhancing its success. In a bid to show that people are not ordinary assets for the company, Honda Motor Co. Ltd uses the term ‘associated’ to describe the special relationships it has with its people (customers, employees, and society).
The capacity of the organization to build and maintain the culture of good relationships with people explains its leadership in manufacturing of motorcycles, automobiles, powered products such as marines, garden, products, and now venturing into the aerospace industry products such as airplane engines.
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Furlan, U. (2002). Corporate Culture and Global Competitions: The Honda Philosophy. Emerging Issue in Management, 3(2), 34-43.
Honda: Why work for Honda? (2014). Retrieved from https://www.honda.com/careers
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