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Date Submitted: 01/04/2012 03:48 PM

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Introduction Since 1957, when Toyota Headquarters was established in Hollywood CA, Toyota Motor Sales Inc. has been a major player in the Motor Sales market in the United States. Now almost 35 years later Toyota is still one of the top vehicle manufacturers in the United States. Recently, the head management used the Central Atlantic Toyota (CAT) as experiment in which regional managers are given more control over their finances, human resources, marketing, and information systems. After successful experimentation, the company is considering expanding CAT as a country wide system. This case study identifies and analyzes the issues and problems included when to convert to this new business model, and recommends possible courses of action to be taken by the company.

Toyota Motor Sales Statement of Issues / Problems As stated before, Toyota Motor Sales Inc (TMS) is considering changing their current business model into the experimental Central Atlantic Toyota Experiment (CAT) model .There are issues involved with the proposed change.

The first issue within the company is the reward system. Currently the organization rewards its employees on a car by car basis and its managers on a cost basis. The evaluator, Al Wagner, has admitted that he uses subjective data to evaluate the regional managers (RGM’s). This reward system focuses on the short term rather than the future of the organization. Another issue, as stated above, is that RGM's may begin to focus only on the short term of the organization rather than the long term. It is important that the company’s focus be divided according to what they deem as appropriate. TMS has been with its current model since it first appeared in the United States. This may cause some hesitation within the company to switch to a new system. Since they are comfortable with the current model and it is working fine, “why change it?”, is the question that many people within the organization may ask. With CAT being implemented some...