In Search of Excellence New

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“In Search of Excellence”

Assignment 1

Dharshviny Sasidharan

SCM-006798



Introduction

“Excellence is in the details. Give attention to the details and excellence will come.”

(Perry Paxton, n.d.) Excellence is the goal of every man on the face of earth. Some find

excellence in building a reputable name in society and some find excellence through

academics. However, remarkable it is when some people turn their entire life searching for

excellence through businesses and organizations. These people make up the leaders in our

society. Their success story is known to everyone and even becomes inspiration to some.

Success to them however, never came rolling. Creating an organization that is able to function

smoothly as well as profitable needs a strong foundation, clear strategies, efficient

management style as well as values that will uphold the company‟s name. Even so, in today‟s

world, excellent companies keep merging everywhere and their secret to success is definitely

to have a management style that becomes a guideline to the companies. One such

management strategy that is worth mentioning will be the Mckinsey‟s 7S framework. This

framework consists of seven elements namely strategy, structure, systems, style, staff, skills,

shared values, or also known as super ordinate goals. Most successful organization is at least

made up of one of the S‟s. This paper will look at some of the most successful organizations

known to people which operate by at least one of the elements in the Mckinsey‟s framewo rk.

Some of the companies are AirAsia, HP, Intel, Toyota, Honda, and Starbucks.



1.0 AirAsia: A Brief History

Every man goes in search for excellence and none opts for the otherwise. However, one

man made the difference when he bought over the now world‟s best low-cost airline for

merely RM 1 (US$ 0.26). The history of AirAsia begun when TuneAir bought it over in year

2001 with only two aircrafts and RM40 million in debt. In 2002, AirAsia became the first

airline to introduce online booking services to customers who wished to book their tickets and

one year after that SMS booking was introduced. Within three years of introduction into the

airlines business, in year 2004, AirAsia was awarded the Asia Pacific Airline title by the

Centre of Asia Pacific Aviation. Finally, in the year 2009, AirAsia wins the „World‟s Best

Low-Cost Airline‟ title awarded by Skytrax. (Have You Flown AirAsia, n.d.). Currently,

AirAsia is still growing rapidly bagging titles and awards, beating other dominant airlines like

the Arab Emirates and Singapore Airlines and making a huge name in the airlines business.

The idea of buying over an existing heavily in-debt airline that ridiculed many at that point of

time now has proven itself, but the secret to it‟s success very much lies on the way Dato Seri

Tony Fernandez brought AirAsia up from scratch. Mention AirAsia now to Malaysians even

Asians for that matter, all they think of is its famous tagline, “Now Everyone Can Fly.” The

tagline truly suits AirAsia since statistics have shown that before its existence; only 6% of

Malaysians have ever travelled via air. (Tony Fernandes Legion D‟ Honneur, 2000). It is in no

doubt that, the success of AirAsia is due to its well-built foundation; its clear strategies,

excellent culture, values, and management style, which are observed by both the employees

and employers.

1.1 The AirAsia Backbone: It‟s Strategy

“A man who does not plan long ahead will find trouble right at his door.” (Confucius, n.d)

Strategy in an organization is a vital part for its growth. Without a strategy, a company‟s

success is at stake. The strategy used in AirAsia is very simple and straightforward. It consists



of four main pillars, which are safety, low fare, service, and simplicity. Maintaining the

„safety first‟ attitude in this company sees AirAsia collaborating with huge names such as GE

Engine Services Malaysia (GEES),a 50 year old company which services jet aircraft engines

as well as a leading manufacturer of large and small jet engines for commercial and military

airplane also engines for industrial applications and marine. In addition to that, GEES leads in

providing integrated engine maintenance services. The five-year deal made in year 2002 looks

at AirAsia spending a sum of 20 million USD in order to provide excellent safety features to

customers as well as to ensure that they are accident free. (Press Release, 2002).The next

strategy emphasized in AirAsia is their low fare, no frills concept. According to Merriam

Webster Online Dictionary (n.d.), the definition of „no-frills‟ is to offer or provide only the

essentials, not fancy, elaborate, or luxurious. AirAsia believes in getting their customers from

point A to point B in a short time. Hence, it exercises removing a few frills within its airline in

order to make it more affordable for everyone. Amongst the things that AirAsia has put aside

to fulfill their low-fare strategy are, no free food and beverages, free seating, ticketless

airlines, no refund and no loyalty program. AirAsia welcomes passengers to customize the

way they fly by enabling customers to purchase food and beverages, comfort kits and many

more from the cabin crew only if they need it. Implying ticketless airlines also saves

customers from the hassle of collecting tickets before the flight as well as saves the cost used

for paper, printing, and distributing.

Simplicity is the third strategy used in AirAsia. Simplicity in this company is defined in a

unique manner. Two of the obvious practice that AirAsia does is to standardize the systems

and equipments as well as simplifying its booking process. In order to efficiently handle the

aircrafts and make it easier for their employees, AirAsia make every effort to have the same

type of aircrafts. It is currently replacing all its old models with the new Airbus 300 models.

(Idris, n.d) This results in a simple way of handling and providing maintenance for the



aircrafts as well as making the training process for pilots and cabin crews a much easier one.

Apar t from that, AirAsia‟s simplicity is also implemented in terms of booking tickets.

According to HaveyouflownAirAsia.com (n.d), AirAsia was the pioneer in online booking of

tickets. A 3-step procedure was created to give customers a hassle free process of booking

tickets. All one needs to do is; book, pay and fly! Since this approach relies heavily on

technology, AirAsia went on in becoming the first to introduce its SMS booking to customers

where they can book tickets, pay for them, and even check their flight schedule through their

mobile phones. Both these system are fundamentals of practicing simplicity in AirAsia.

Finally yet importantly, AirAsia stresses on their services that they offer to customer at every

level. With the aim of being the lowest cost short-haul airline, one of AirAsia‟s visions

suggests that their services must ensure satisfaction of every guest. To facilitate that vision,

employees in this company are always friendly to their customers at every opportunity. This

includes flying on time and awarding their customers if the flight is delayed. According to

AirAsia, its flights in July have reported a 92% rate of punctuality. It also recently introduced

the on-time guarantee where passengers are entitled to a RM 200 AirAsia e-gift voucher if

their flights are delayed for more than three hours. Steps as such not only ensure that their

service are the best but also increases customer loyalty towards this company.

“Never be afraid of failure.” (Tony Fernandes, 2004). As the founder of AirAsia, he has

since come a very long way in the airlines business. AirAsia is a good example of how having

a strategic plan can benefit an organization. If it were not for this redefined business model

that it has today, AirAsia would not be recognized worldwide as it is now.



2.0 Hewlett Packard : It‟s Story

Who knew that a garage built by two university classmates would today become a

world-renowned company manufacturing electronic tools; things that we rely on so much

nowadays; laptops, desktops, printers and much more. The growth of HP was a remarkable

journey when both classmates; Bill Hewlett and Dave Packard created HP (Hewlett-Packard)

in year 1939. HP‟s first product created in that garage was an audio oscillator, a tool that

produces frequency or pure tone at a given time, which was bought by Walt Disney Studios to

be used for their film, called Fantasia. The following few years sees HP growing from a

simple garage to a rented building and continuously producing equipments and devices

alongside building its own unique corporate culture. In 1960, after 30 years residing at its

birthplace, Palo Alto in Loveland, Colorado HP opens its first manufacturing plant in the

United States. At that point, HP was very much established and had almost 3000 employees

under them with a profit of $ 60.7 million. The 70‟s witnesses HP becoming the pioneer in

producing a new range of computing products including the first scientific handheld

calculator, the HP-35. In the next decade, HP grows even more rapidly making its entry into

the computer industry creating computers, desktop machines, as well as minicomputers. HP

also begins to link their computers to its electronic devices and medical products making it

more powerful and faster. They also made entry into the printer business, producing inkjet

printers, laser printers and many more.

In the 90‟s the ever-growing company opens many labs all around the world in order to

provide a better service to people around the globe. In the same decade, Dave Packard

produces „The HP Way‟, a book depicting the excellent values and culture practices that have

been the guidelines to HP‟s extraordinary success. The end of the decade also sees HP giving

importance to its brand. HP releases its brand new logo with the print and media giving focus

on its history of invention and innovation. The birth of the new millennium looks at HP



simplifying its technology experiences for its customers and becoming the world‟s largest

technology company. Later in the decade, HP continues to grow steadily producing products

with the latest technology for its customers. At the end of the decade, HP bags awards for its

inventions and continues to make a name in the business world. (HP History, n.d.)

Making a huge success in the business world is a tough job. However, as an organization,

HP has achieved its success almost easily with the help of an amazing culture and

management style that is practiced in HP.

2.1 Built to Last: The HP Way

Mr. Packard, the founder of HP once said, “ We had to tackle almost everything

ourselves--from inventing and building products to pricing, packaging and shipping, from

dealing with customers and sales representatives to keeping the books, writing the ads and

sweeping up at the end of the day. Many of the things I learned in this process were not

available in business schools.” (Cranny, 1996) Handling everything in an organization is not

an easy task. Thus, both Bill Hewlett and David Packard came up with a management style

that has led their company to an outstanding success in the development of technology. Both

these masterminds created „The HP Way‟, a management style that has brought much success

and development to the growth of HP as an organization that is not only profitable but also

responsible towards their stakeholders, environment and many more. There are several

principles that HP has lived by. They believe that management in a company should

ultimately be about building relationships. Leaders in HP adopted the „management by

walking‟ style in order to keep connections close to their employees in the company.

“Personal communication was often necessary to back up written instructions. That was the

genesis of what became „management by walking around‟ at Hewlett -Packard Company.”

(Minton, 2007). Exercising this style has enabled them to find out what their employees are

working on, the problems that they encounter daily as well as their fresh ideas to enhance the



products further. In HP, they believe that by walking around, ideas from employees are

communicated better. Employees too, are regularly appraised on their performances and this

is usually done in an informal setting.

Besides practicing the management by walking style, HP leaders also practices the

management by objective style in their company. According to BusinessDictionary.com

(n.d.), management by objective is about having greater employee motivation and

commitment through participation in the planning process. At HP, they make sure that the

overall objectives are well grasped by everyone. When employees are well informed of the

objectives, the leaders at HP allow their employees to work towards those targets in the means

that they are comfortable with. The HP Way also sees its leaders establishing another policy

called the open door policy. The policy encourages executives to have offices with no doors

as well as to have open cubicles among their employees. This policy was used in HP in order

to build an environment of mutual understanding and trust amongst their staffs. It also

encourages workers to confide in to their executives about their problems, be it personal or

regarding work without any negative consequences. Apart from these, HP as an organization

pioneered the idea of working with flexible hours. This concept, often known today as the

„flexi time‟ enables workers at HP to start work at anytime as long as they complete a given

amount of working hours in a day. The „flexi time‟ concept that HP has given birth to is a part

of HP‟s belief that as an organization they must respect and have trust in people.

Packard once said “to remain static is to lose ground.” (HP History, n.d.) Hence, both

Bill Hewlett and David Packard devoted much of their time to create an innovative company.

However, HP‟S success must not only be measured through their products but also their

revolutionary management style that has become a source of inspiration to many businesses at

present. Now HP is still encountering immense amount of growth in profit as well as

employee growth.



3.0 Intel: History of Innovation

Intel Corporation is currently the main semiconductor producer in the world, with major

facilities in the United States, Europe, and Asia. Intel has uplifted the world of technology

since it was founded in 1968. Intel's creator, Robert Noyce and Gordon Moore, were from

Fairchild Semiconductor, established in 1957. While at Fairchild, Noyce and Moore created

the integrated circuit, and, in 1968, they decided to form their own company. They were also

joined by Andrew Grove, an employee at Fairchild. Grove remained the president and CEO of

Intel till the 90s. The company was integrated on July 18, 1968, as N M Electronics,standing

for Noyce and Moore, but quickly changed its name to Intel since Noyce and Moore sounded

like „Noise More‟. Thus, they decided on Intel and formed it from the first syllables of

'integrated electronics.' Intel gathered $5 million in capital before going public. In a few

months of its startup, Intel produced the 3101 Schottky bipolar memory, a high-speed random

access memory (RAM) chip and sees Intel continously producing products to make perfect its

earlier one. The company's biggest outbreak on the computer industry was on 1971 when the

introduction of the 4004 was made to the world; the first microprocessor. Similar to many of

Intel's earlier innovations, the microprocessor was a result of efforts to advance another

technology.

Later on, a Japanese calculator manufacturer known as Busicom, asked Intel to design

twelve cost-effective chips for a series of calculators. Intel‟s engineer Ted Hoff agreed to be

assigned to the project knowing that he would not be able to pull it off alone.However, in

order to solve that problem, Hoff conceived a plan for a central processing unit (CPU) on one

chip but is able to function exactly the same as twelve chips. The 4004 model was then

created, which crammed 2,300 transistors onto a one-eighth- by one-sixth-inch chip. In the

1970s, Intel had developed the erasable programmable read-only memory (EPROM), since



the standard ROM chips can only be programmed during its manufacture and is permanent,

any change required on the chip,results in the manufacture of a whole new chip. With the

creation of EPROM, Intel could offer its customers chips that could be erased and

reprogrammed with ultraviolet light and electricity. When it was introduced in 1971, EPROM

was still new and did not make it big in the market.

Intel's growth was such that from the 12 employees it had at the start, the number grew to

15,000 staffs in 1980. Such a development demanded a thorough approach to its corporate

culture. Fairchild's bureaucratic bottlenecks taught Noyce, Moore, and Grove that defining a

workable management style was very important. They kept the communication lines open by

having informal weekly lunches with employees while the company was still small, but that

system had become unmanageable. Hence, the founders lined out a carefully planned a

program giving importance to openness, decision making on the lowest levels, discipline, and

problem solving. With that, the company's top executives started giving up luxuries such as

limousines, expense account lunches, and private parking spaces to establish a sense of

teamwork with their subordinates. Intel also started highlighting its values amongst its

employees and higher management team.(Intel Microprocessor Quick Reference Guide,n.d)

In order to support its then mission which is “Do a great job for our customers,employees

and stakeholder by being the premeninent building block supplier to the computing industry

worldwide.” (Whetten,Godfrey,1998). In order to fullfill this mission, six values were created

as a part of its corporate culture. Although its mission has changed currently according to the

flow of time, the six values that were emphasized then remain a part of Intel‟s shared values.

Intel remained competitive through a combination of clever marketing, well-supported

research and development, and most importantly a vital corporate culture with significant

values being a part of it.



3.1 Their Ideals: The Intel Values

“A research confirms that organizations with a strong corporate culture based on a

foundation of shared values outperformed other firms by a huge margin.”(Kouzes, Posner,

2007). Intel as an organization which is almost 40-years of age has been practicing the same

set of shared values that were outline by their founders back in the 60‟s. Those six values that

Intel has practiced all along is a part of how they are defined as employees and as an

organization. Intel‟s values are more than jus words as they are something that the staffs live

by and their achievements are definitely the proof.

One of the first most important value that Intel stresses on as an organization is

customer orientation. An American born business man, Harry Gordon Selfridge once said,

“Customers are always right”. (Thinkexist.com, n.d.) At Intel, workers live by the same motto

too. Staffs in Intel are always advised to listen very carefully to their customers, suppliers, and

stakeholders. They are asked to clearly communicate mutual intentions and expectations

towards their customers. In order to keep their customers happy, workers are expected to

deliver innovative and competitive products and services regardless in what department they

are in. By practicing all these, the leaders of Intel believe that it will be much easier for

customers to work with them and indirectly resulting in customer loyalty and to Intel being a

vendor of choice. The second value that is given much emphasize is discipline. Intel observes

this value in terms of maintaining professionalism at all times as well as conducting their

business without compromising their integrity. This not only applies towards their customers

and suppliers but also towards their environment in the company. Everyone at Intel is

expected to keep their workplace safe, clean and injury-free as well as make and meet their

commitments as the Intel workers. Discipline also comes into play when any staff projects are

planned. Employees there must properly plan and fund these projects.



Their third shared value is quality. Employees at Intel go all-out to achieve the highest

standard of excellence in everything they do. The learning process at Intel is continuous

where employees develop, and improve in their field. The Intel staffs also take a lot of pride

in carrying out their duties. Most companies these days discourage their employees to take

risks when it comes to work. However, Intel on the hand encourages their staff to do so.

Hence, leaders of Intel have outlined taking risks as one of their core values. Innovation and

creative thinking are fostered among their staffs. In fact, staffs at Intel are told to embrace the

positive changes around them and challenge the status quo. “Those who never made mistakes

lose a great many chances to learn something.”(Luther, n.d.) Intel always supports their staff

to learn from their successes and mistakes. They also reward their employees for informed

risk taking.

A human needs a comfortable environment for him to be productive. Thus, one of

Intel‟s values highlights that every employee of Intel, regardless of their position must work

together in making Intel a great place to work. They request their staffs to always be open and

direct at all times as well as to maintain respect between each other all the time. Intel also

promotes a healthy and challenging work environment that will further develop their

workforce. They appreciate employees by rewarding and recognizing their accomplishments.

Staffs at Intel are not only assets to their company but is also ushered to become a good asset

to their communities. Last but not least, the sixth value that is underlined as a part of Intel‟s

shared values is results orientation. Intel sets challenging and competitive goals for their

employees to meet. They also make sure that staffs give focus to outputs and carry out their

responsibilities well. In a problematic situation, an employee is expected to approach the

situation constructively with confrontation and solve the problem. These duties are expected

to be executed flawlessly as they may hurt the image of Intel.



4.0 Honda: The History Behind

Mention Honda today and everyone would start talking about their automobile‟s latest

design, speed and so on. The popularity of Honda Corporation did not just rise but involved a

lot of hard work in bringing up the company. Honda Corporation was founded in year 1948

but the original history goes back much further in time. The man behind Honda, Soinchiro

Honda grew up in an environment filled with cars and motors. He worked as a trainee in

Tokyo‟s Art Shokai motor shop in the 1920s. Honda started off with Honda Technical

Research Institute in 1946.Two years later, this research institute was developed to become

Honda Motor Company in 1948 where it began by making and selling motorcycles.

The 1950s sees Honda keeping its focus towards motorcycles even as other motor

companies began shifting towards automobiles. In the same year, Honda launched „Juno‟

scooter which was the competitor product against Italy's Vespa scooter, and sales took off.

When it finished 6th place in the 125cc category at the Isle of Mann TT Race, Honda‟s name

began to make a mark internationally.

It has always been Soichiro Honda‟s dream to go international with his organization.

As a matter of fact, success at Japan wasn‟t his ultimate objective with the Honda

Corporation. He always had the impression and often told his friends and associates that

success in Japan would come naturally if Honda was successful worldwide. Honda then

started to open branches in other nations which include a Honda Shop in Los Angeles in 1959.

The first ever bike that was sold was the C100 Super Cub model. The company then easily

adopted “good products know no international boundaries” as their philosophy.

In the 70‟s, Honda experienced a major decision point as it began exporting the Civic

model to the United States which became the most successful and economical family vehicle.

The model was so cost-effective that its success boomed even though the entire world was hit



by the energy crisis. Soon after that, Honda began to sell the Accord model in the 1980s. It

also started building cars in the United States. In order to please its wealthy customers, Honda

created the sophisticated Acura line of automobiles compared to those who preferred the

practical Civic and Accord models.

At present, Honda is very well known for its quality in their automobiles in every type

of vehicle you can ever imagine. It is also becoming more responsible towards the

environment and is working on producing environmentally friendly cars such as the Insight.

Having a lower fuel economy and a lower price tag enabled Insight to become Japan‟s best

selling vehicle and indirectly becoming the first hybrid vehicle to top the list of

automobiles.(Honda Worldwide: Timeline, n.d.)

The success story of Honda would not have occurred if its leaders paid less attention

to its organization structure. The structure of Honda was carefully and cleverly arranged by its

leaders so that every one could carry out their responsibilities orderly. “Organizational

structure can be considered as the arrangement of organizational parts that exist to provide

organizational effectiveness.” (Erickson, 2005) Honda‟s success today is definitely

contributed by its efficient organizational structure.

4.1 Honda‟s Structure: The Winning Hierarchy

Honda considers their management to be one of the most crucial elements in inclining

the growth of its organization. Generally, Honda has six administrative regions worldwide

that executes and develops the business according to the fundamental corporate philosophy of

Honda Corporation. These regional administrations adopt long-term perceptions and stay in

close ties with the local communities. Honda has four business divisions which are

motorcycles, automobiles, power products as well as components. These divisions create

medium and long-term business plans. Each and every division targets to amplify its



performance on a global base. Functional operations such as Customer Service Operations, on

the other hand, support other functional operations in order to increase Honda‟s operational

efficiency. Apart from that, Research and Development activities are also conducted primarily

at Honda‟s independent subsidiaries like the Honda R&D Co. Ltd. The Honda group carries

out research and development activities proactively in order to create products which are

unique.

At a closer look, in order to supervise their management in a more effective way,

Honda hires outside directors to its Board of Directors. Its Board of directors consists of 20

members of which two are from external sources. This board functions to make major

decisions for Honda inclusive of legal issues. The Board of Directors meets almost eight times

in a year. The Board of Auditors on the other hand is made up of six auditors, three of which

are from outside. The corporate auditor‟s duties are to audit the directors‟ implementation of

responsibilities in accord to Honda‟s auditing standards, auditing policies and the decisions of

the Board of Corporate Auditors.

Under the Board of Directors, the Executive Council is positioned. The Executive

Council is made up of the President and the CEO‟s as well as nine other representative

directors. The main responsibility that the Executive Council carries is to discuss important

management issues within its scope of power. This council also discusses in ahead of the

agendas that will take place during the meetings of the Board of Directors. It also functions to

deal with important global issues. The council meets approximately 27 times in a year.

The Executive Council heads the six Regional Operations Council namely each for

Japan, China, Middle East as well as all the continents. The regional operations council in

order to improve the independence of each administrative region. It also ensures quick

decision-making. They have also been established in each administrative region to discuss key



regional management issues within the range of authority bestowed upon them by the

Executive Council.

With the intention of further increasing customer‟s trust, Honda has created the

Business Ethics Committee and included this committee in their organizational structure. This

committee consists of directors and five corporate officers and is chaired by the Compliance

Officer. This committee specializes in solving problems related to corporate ethics and

compliance. They meet twice annually to discuss these matters. Under this committee a sub-

committee is created. This sub committee is called the Business Ethics Improvement Proposal

Line. Since Honda places great importance on open communications, this committee is set up

to accept ideas regarding corporate ethics. The Business Ethics committee supervises the

operation of the sub-committee and submits status reports to the Board of Auditors.

“The only difference between a mob and a trained army is organization.” (Calvin

Coolidge, n.d.) Having an organized structure is a vital part of every company. The strong

structure in Honda Corporation on the other hand has been a good proof that having a

structure can bring much success to the organization. Not only does it allows leaders to

manage wisely, but also becomes a guideline to employees to organize and align themselves

appropriately in order to achieve the company‟s goals.



5.0. Toyota: The Story Beneath

Toyota Motor Corporation was Japan‟s largest car company and became the world‟s

third largest automobile company in the year 2000.By late 90s, Toyota was already producing

5 million units yearly and had 9.8 percent of control over the global market for automobiles.

Toyota‟s founder, Kiichiro Toyoda travelled to United States in 1933 and after returning to

Japan, he started off building a prototype in his father‟s loom factory. Then in 1939, the

company moved on and started off with a research center to work on battery powerred

vehicles. The 40‟S looks at Toyota growing and producing vehicles after vehicles which were

improved as time passed by. Apart from producing those vehicles, Toyota also went on in

establishing plants, bussiness developments and facilities like the Toyota Machine and Works

Co. Ltd.

The next decade unfortunately was hit by a financial crisis. In this decade, labor

dispute occured and voluntary retirement had to take place. This however, did not deter

Toyota‟s growth. In the same decade on 1957, within a few years Toyota opened its fir st plan

in the United States; Toyota Motor Sales USA Inc. Toyota also carried out its first export of

Japanese Passenger car called Crown to the States.In the 60s, Toyota was already making a

big name in the market. 1962 marked the 1 million production of Toyota vehicle

domestically. In the same year, Toyota also managed to open up a branch in thailand; Toyota

Motor Thailand Co. Ltd. Toyota also was awarded the Deming Prize for its outstanding

achievements and improvements. By the end of the decade, Toyota was already hitting 1

million worth of sales.

The next few decades see Toyota manufacturing new and improved models to fit the

technology advancements as well as their customers taste. In year 1992, Toyota created its

guiding principles and was anoounced to the public.The hybrid model, Prius was also released



in year 1997 which shows the world that Toyota pays attention to its environment. By the

end,on year 1999, Toyota was already exceeding 3 million in sales overseas annualy. The

millenium opened up with Toyota establishing the Toyota Financial Services Corporation. It

was set up in order to oversee Toyota‟s finance companies all around the world. (History of

Toyota,1995)

Till now, Toyota has never stopped producing excellent automobiles fro customers

and providing a healthy competition to its customers. The reason behind this immense success

cannot only be due to its quality product but also its excellent management which keeps their

customers as well as employees happy. In order for companies like Toyota to run smoothly,

employees play a big role in such organizations. Toyota has a dopted an excellent sytem in

order for the company to run smoothly.

5.1 Toyota: Developing People

“Because people make our automobiles, nothing gets started until we train and educate

our people.” (Toyoda,n.d.) At Toyota, the Human Resource department carries out more tasks

than just managing databases and it is definitely not a role that can be outsourced. In actual

fact, since people are so connected to its management philosophy, HR is one of the most

important and powerful departments in the company. Toyota believes that the growth of

human resources needs the handing down of values and perspectives. Thus, the Hr at Toyota

facilitates much more when compared to HR departments in other companies.

Among the first things that the HR department is asked to facilitate is, commitment

and tools for stable employment. Toyota‟s most important commitment is stable employment

and letting team members know that they are the most vital resource. Thus, investigating in

team member development is a must for companies like Toyota. Toyota has also made it clear



that should a terrible economic disaster occur, its employees would not be laid off like back in

the 1940s. By doing so, Toyota has provided its employees with a safety net that will enable

them to continously participate in any sort of activity that will further develop Toyota.

Besides that, the HR department makes sure that all their policies and practices are fair

and consistent. Almost all companies attempt to be fair and consisten in their policies,

however, this is done differently in Toyota. At Toyota, the HR representatives do not sit and

face their computers all day long,nor do they answer calls. Representatives there often roam

around throught the company, at every department to be up to date about the company‟s latest

happenings. This is actually referred to genchi genbutsu which means going to the site of the

work done in order to understand better the company‟s situation firsthand. In order to

continously be fair and consistent, Toyota bans promotion for employees being given without

the approval of the HR department.

Toyota does not disable promotion entirely for its employess but rather give them slow

promotion through teamwork. As an organization that appreciates the long term relationship

that they have with their employees, Toyota is willing to be patient and let its employees to

grow and mature into the level of leadership that fits their capability. As a return,Toyota

expects its employees to have patience and grab the oppoturnity to learn and develop

themselves.

Last but not least, HR at Toyota develops the policy deployment employees can

continously improve their duty and solve issues by focusing it towards a common objective.

The HR department usually sets a common goal which is agreed by the higher management as

well as every team member and employee of Toyota. Each employee is also expected to have

a measureable objective that will be reviewed throughout the year. When team members feel



that they are valued as a long term employee at the company and that their fate resides to the

fate of the company, they work exceptionaly harder to give a better performance.

Toyota provides a model of a HR system that is real and successful. It is successful

and beneficial for both the owners of the business and for the team associates. The system

starts with the statement that people are the most vital resource and needs to be taken care of,

developed and challenged. Human resource management is one of the most noticeable and

essential department in the company since humans are the only competitive resource that

cannot be copied by any other organizations.



6.0 Starbucks: The Coffee Story

Starbucks became a lead in the coffee bussiness when three friends who were very

passionate about fresh coffee opened a small shop that sold coffee beans, brewing and

roasting accessories. Starbucks has recognized itself as one of the major corporate success

stories ever since its first store opened in Seattle in 1971, to its current 7,521 self-operated and

5,647 licensed stores, almost one-third of which are in countries other than the United States

operates and carries its brand name „Starbucks‟. The name „Satrbucks‟ originates from a

classic American novel which was called the Herman Melville‟s Moby Dick. The novel was

about the 19th century whaling industry.

Howard Schultz joined Starbucks after being hired by one of the three friends in 1982

and was sent to Italy for a house ware exhibition. During that, he visits Milan‟s famous

espresso bars. Schultz was very impressed with the popularity and culture that coffee‟s had

there. With that, he thought that Seattle has much potential into becoming a coffee-crazy

place. Due to its popularity, Starbucks expands beyond Seattle. It started off in year 1991 by

expanding to California. Then, in 1992 after going public, it underwent a remarkable growth

like no one has ever seen in the coffee business. By the year 1997, the number of Starbucks

outlets grew ten times more and started opening branches in countries like Japan and

Singapore. Not satisfied with its success, Starbucks soon started to venture out to make more

profit. It started serving its popular coffee at the United Airlines Flight and also distributing

whole bean and ground coffee to supermarkets. It also went on to produce coffee ice

cream.(History of Starbucks,2009)

In order to continue the company‟s success and growth now, Schultz believed that the

company has to continuously produce products which taste good all the time. For that to be

done, staff‟s at Starbucks must be trained thoroughly on how to prepare coffee the Starbucks

way.



6.1 Starbucks Staff

In order to adapt to the fast growth at Starbucks, leaders had to come up with the

appropriate systems to recruit, hire, and train baristas and store managers. Since giving

customers the „Starbucks Experience‟ was crucial, store staff was a vital part of Starbucks.

Starbucks' Vice President screens new candidates for positions in Starbucks by using some

simple guidelines. He says that, future employees must be passionate about coffee and must

have fun in what they are doing. (Thompson & Gamble, n.d.) At least 24 hours training in the

first two to four weeks is provided to every bartender or partner hired for retail jobs at

Starbucks outlets. These sessions includes classes on coffee history, drink preparation, coffee

knowledge for four hours, customer service for four hours, and retail skills, as well as a four-

hour workshop called "Brewing the Perfect Cup."

Those classes also teaches the Bartenders to use the cash register, weigh beans,

opening the bag properly, capturing the beans without spilling them on the floor, holding the

bag in a way that keeps air from being trapped inside, and sticking labels on the package

exactly one-half inch over the Starbucks logo. Training for beverage preparation consumed

more time as they were taught how to carry out activities such as grinding the beans, steaming

milk, learning to pull perfect (18- to 23-second) shots of espresso, memorizing the recipes of

all the different drinks, practicing making the different drinks, and learning how to make

drinks to customer specifications.

There were also sessions on how to clean the milk wand on the espresso machine,

explaining the Italian drink names to customers, sell an $875 home espresso machine, make

eye contact with customers, and take personal responsibility for the cleanliness of the coffee

bins. Future employees were also drilled in the Star Skills, three guidelines for on-the-job



interpersonal relations which are maintaining and enhancing self-esteem, listen and

acknowledge, and ask for help.

All the trainees attended classes for almost 8 to 12 weeks. Their training was much

detailed, covering not only the information passed on to baristas but also the details of store

operations, practices and procedures. All these details are as set forth in the company's

operating manual, information systems, and the basics of managing people. Starbucks' trainers

were once all store managers and district managers with hands-on experience. One of their

major aims was to establish the company's values, principles, and culture and to pass on their

knowledge about coffee and their passion towards Starbucks.

Each time a new Starbucks outlet is opened, it undertook a major recruiting effort. 8

to 10 weeks before opening, the company placed advertisements to hire baristas and begin

their training. It sent a Star team of experienced managers and baristas from existing stores to

the area to lead the store-opening effort and to conduct one-on-one training following the

company's formal classes and basic orientation sessions at the Starbucks Coffee School in San

Francisco.

It is undeniable that employees are one of the company‟s greatest assets. What they

say, their actions in the workplace, and how happy and content they are in their position have

an impact on the company‟s brand, image, levels of service and ultimately the customers‟

satisfaction. Employees then ultimately become the brand carriers of an organization and thus

must be given the appropriate exposure towards the organization.



Conclusion

Success for an organization definitely does not happen by chance. It happens when leaders are

ever willing to prepare, plan and execute tasks in their companies. Hence, any organization

that aims for success must possess a first-class management style, share a unique culture and

own an outstanding structure. Companies that were used as examples above have the best

characteristics that have help them grow in terms of profit as well as human capital. Most

budding business these days pays more attention to obtaining income which will only result

them in obtaining a temporary name and success in today‟s market. However, in order to be

listed as the one of the finest organizations in the world, and has the potential of rapidly

growing, expanding as well as obtaining profit at the same time, a company must give stress

to its corporate profile. A successful company must stress excellent values in their

organizations. These values must be a part of their image, the way things are done, and all in

all, become something that they breathe and live with everyday. Emphasizing these values can

be done by ensuring that all their employees are well taken care off. They must also give

importance towards their environment which includes the community and nature itself. A fast

and growing trend amongst successful companies today are to establish the Corporate

Responsibility department which is responsible for giving back to the community and

environment. All these actions will not only give the organization a good image, but also

create an everlasting trust with their customers. Albert Einstein once said, “Try not to be a

man of success but a man of value.” (Success Quotations, 2002)



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