C3 – Competing

Chapter 3 reviews the cases of four companies – Ford, General Motors, Toyota, VW and looks at how different organisational models have been successful, and dominant, during different periods of the auto industry’s history. Each model demonstrates particular trade-offs, and all, in different ways, illustrate the dilemmas that auto companies face.

Chief amongst these is the need to reconcile heterogeneous market demand  which implies many different models and variants, possibly customised for different regional markets, with economies of scale –  which imply long production runs of standard products. Many of the organisational models found in the auto industry can be understood as attempts to reconcile this basic tension.

This diagram summarises these ideas:

Figure 3.3 The evolution of management paradigms in the auto industry

 

Selected Quotes

In 2015 [before the emissions scandal broke] concerns were starting to surface relating to whether VW had become too complex to be managed effectively. Platform and module sharing provides great efficiencies in design and production, and has allowed VW to provide enormous variety across brands, segments and regions. Sharing however also requires considerable coordination effort, and a strong, central mindset to enforce discipline”. (p.69)