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How Toyota engineered its own downfall

by on February 18, 2010

How Toyota engineered its own downfall

As discussed in the class yesterday about the banking industry, my thought is the deeply buried American culture about freedom, optimism, gullibility and accolade for free competition play a very important role.  It’s a combined consequence and cannot easily be controlled by any single person.  So is the automobile industry.

Basically those CEO’s have two options: 1. to do whatever they can (I mean something not so pretty) to make their account book look nicer 2. to do something that may or may not benefit the company in the long turn (more rigid risk/quantity control, for example).  No one is going to do the later!  Meanwhile, If I do something and it turns out to be good (very likely), I get all the credits.  On the contrary, if it turns out to be bad, the whole industry takes the responsibility.  What would you do?  It’s a biased gambling.

It’s definitely the responsibility of the government to make sure this kind of gambling won’t happen again.  However the difficulty still lays in your culture, which is very, very hard to be changed.

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