Growth And A Whole New Set Of Problems

Here is a good article about Toyota and how success has created problems.

Toyota has been able to stage its astonishing assault on world markets by maintaining ruthless quality and cost controls. In addition to being the most profitable automaker, it consistently wins top quality awards from J.D. Power & Associates. To Toyota President and CEO Fujio Cho and other executives, the guiding principles have always been clear. They needed only to keep implementing concepts pioneered by the late blunt, flamboyant engineer Taichi Ohno such as kaizen (continuous improvement), just-in-time delivery and other elements of Toyota's "lean" manufacturing system.

But while the rest of the world fears Toyota, insiders are concerned about the company's ability to manage its growth and maintain the quality of its products. The company now has 260,000 employees in 26 countries. But it has not yet been able to develop the sophisticated decision-making balance between headquarters and local operating units that some Western multinationals have achieved. As a result, the company can either centralize decision making in Japan or allow it to devolve to U.S. or European managements. There seems to be little middle ground.

Growth can create so many problems that it can sometimes ruin a company if it comes too quickly. One of the toughest things to do in business, in my opinion, is lay the foundation to prepare for growth. It usually means spending money you don't have so that you can handle business on a larger scale. Of course, you may not grow as fast as you think, in which case it would have been nice to have that money for something else.

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