organizational culture and national culture of Automakers Comparison

Many countries developed their own automobile industries, and did so in order to create jobs, for national security reasons, and simply because shipping cars overseas was impractical for much of the 20th century. This paper will look at three major automobile manufacturers, one each from Europe, Japan and America, to examine the differences and similarities between them. Each company evolved differently, and did so on the basis of both national culture and in terms of the markets in which they operated. The companies studied are Ford, Hyundai and Renault-Nissan-Mitsubishi. The latter makes a nice case study because it is a French-Japanese firm, one of the biggest and most powerful transnational automakers, but a model that if successful might be replicated increasingly in the future.

American automakers are depicted both as monolithic giants, and as dinosaurs at the same time. It is only grudgingly that international press talks about a company like Ford as innovative – it seldom happens – but more as a company turning out standard product for a standard price. US automakers fell behind the innovation game in the 1980s and even ones that have successfully expanded internationally have struggled to shed their reputation as anything other than good producers. For Ford, this is something of reality, as the company rose to prominence more on the basis of its manufacturing strength than its design ("you can have any color you like, as long as it's black").

Toyota also built its reputation on production prowess, in its case its famous adoption of the lean methodology, building on some of what Ford did. Toyota is synonymous with lean (Onetto, 2014). Toyota wins market share again not on design but largely on the fact that it builds good cars at low prices. This is the way the company is often portrayed in business press. A good example of the reverence that the business world has for Toyota is in the shock used to describe the company's supply chain issues following the earthquake in 2011 – nobody really thought Toyota could have such struggles (Webb, 2016).
Renault-Nissan is starting to gain a reputation as a leader – not just in terms of market share (Schmitt, 2017) but as a master collaborator, having learned through the integration of its two largest companies how to work well with other companies, and use that as a component of strategic advantage (Shirouzu, 2017). So there are definitely some differences in the ways that these different automakers are portrayed in the media, and these differences seem to reflect the ways that these companies are internally, at least to some extent.

Ford's is definitely a power culture, with centralized control. The company is still run by the Ford family, and that alone makes for a power culture, but all of its key decision-making is localized in Detroit. There are some international subsidiaries, but Ford has really centralized its decision-making, its design and still a lot of its production as well. The result is a company that is quite conservative in its approaches, and that despite international expansion remains dependent on trucks in the US market for a lot of its success.

Toyota is a control culture as well. This is part of the Japanese approach, where hierarchy is very important. Automobiles are an interesting industry that way – most of the companies are very old, and have really not adapted very much to modern management styles. So while Toyota has more role-influenced decision-making, it is at the end a control culture with strong emphasis on hierarchy and centralized decision making. The influence of role-based decision-making can mainly be found in engineering, but that is the same as at Ford as well, because subject matter experts are allowed to influence decision-making within their area of expertise.

Renault-Nissan is an interesting case, as this is basically an alliance between two companies with distinct cultures. Both are old companies with typically centralized decision-making, but Renault-Nissan has built in a lot more of a task culture with an emphasis on collaboration. Element of role and control cultures still exist, but there appears to be more flexibility within the alliance to have a task culture, collaboration, and seeking of mutual benefit. That there remain strong power structures within both Nissan and Renault all but ensures a shift away from singular, centralized control structures, or even role structures, since many roles are duplicated within the alliance.

It is recommended that all of these companies move more towards a role-based cultural model. The reason is that while automobiles have become much more internationalized, there are some large players in emerging markets like China and India that are starting to reframe the nature of competition in the industry. Innovation and flexibility are going to be the norm going forward, so any company that wants to thrive in the 21st century needs to embrace a model of culture that encourages a more rapid pace of innovation.

An economic system will influence a society most especially in the area of risk-taking. A great way to look at this is to examine countries that have similar cultures but different economic systems. Of course you have the extreme of the two Koreas, or even the different Chinas, where capitalist and communist models showed that capitalist models allow for risk-taking that spurs economic growth. But a less extreme example can be found between the US and Canada, where the American model allows for much more risk-taking, and a more rigid Canadian model, while not restricting risk-taking entirely, certainly does less to encourage it than the American model.

This is one of the biggest reasons why some countries have lagged behind others in economic development. An environment with fewer barriers allows people to innovate at the pace dictated by the market, and to take more risks. By removing barriers, people are freed to thrive at a higher level. That said, there are certainly other factors, such as resource wealth, market size and proximity to markets. A small island nation like Tonga will never grow rich selling coconuts; it's far from markets, has no domestic market to support business, and even the most capitalist regime would not allow for the growth of a global enterprise there. But there are examples where resource-rich countries with decent-sized domestic markets still struggle to unlock their potential. Countries like Saudi Arabia, South Africa or Argentina have all the resource wealth, good local market size, and access to markets to compete with Canada, Australia or European countries, yet they all lag significantly because their economies are constrained by government and culture.