A systems perspective on the death of a car company

Purpose – The aim of this paper is to understand how large and apparently successful organizations enter spirals of decline that are very difficult to reverse. The paper examines the case of Rover, once one of the largest car producers in the world, which collapsed in 2005. An analysis of strategic and operational choices made over a period of 40 years investigates the reasons for, and consequences of, a growing mismatch between the context faced by the company (industry dynamics, market conditions) and its operational capabilities, a mismatch that ultimately brought about the company's demise. Design/methodology/approach – The paper is based on interviews with 32 people, including senior managers (including four chief executives), government ministers and union officials who were key decision makers within, or close to, the company during the period 1968 and 2005. Secondary sources and documentary evidence (e.g. production and sales data) are used to build up a historical picture of the company and to depict its deteriorating financial and market position from 1968 onwards. Findings – The company was formed from a multitude of previously independent firms as part of a government‐sponsored agenda to build a UK National Champion in the car industry. The merged company failed due to several factors including poor product development processes, poor manufacturing performance, difficult labour relations, a very wide product portfolio and a lack of financial control. Although strenuous efforts were made to address those issues, including periods of whole or part ownership by British Aerospace, Honda and BMW, the company's position deteriorated until eventually production volumes were too low for viable operation. Practical implications – The case of Rover highlights the importance of what has been termed “the management unit” in complex systems. The management unit comprises processes and routines to deal with challenges such as managing product portfolios, connecting strategic and operational choices, and scanning and responding to the environment. In the case of Rover, a number of factors taken together generated excessive load on a management unit frequently operating under conditions of resource scarcity. We conclude that viewing corporate failure from a systems perspective, rather than in terms of shortcomings in specific subsystems, such as manufacturing or product development, yields insights often absent in the operations management literature. Originality/value – The paper is of value by showing corporate failure from a systems perspective, rather than in terms of shortcomings in specific subsystems, such as manufacturing or product development; and yields insights often absent in the operations management literature. The Rover case featured in the paper demonstrates the usefulness of systems ideas to understanding at least some types of failure, not as an alterative to capability‐based approaches, but in addition to them

Bringing Japanese Continuous Improvement Approaches to U.S. Manufacturing: The Roles of Process Orientation and Communications *

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/71419/1/j.1540-5915.1995.tb01442.x.pd

New wave manufacturing strategies: Operational, organizational and human dimensions

Lean production (LP) is just one of several concepts which have been devised to express the radical new approaches which have taken place in manufacturing in recent years. Others are just-in-time (JIT), world-class manufacturing (WCM) and total quality management (TQM). In order to embrace the whole gamut of development, we have coined the term “new wave manufacturing” (NWM). Whichever term is used, our joint research to date gives us concern that the existing literature fails to address adequately certain crucial aspects of the organizational realities of such innovations. On the one hand, the operations management literature tends either to ignore the social and organizational dimension or pays scant attention to its importance. On the other hand, the organizational behaviour literature has not realized its potential because of its failure to engage fully with the technical and operational arrangements which it wishes to critique. In consequence, both sets of literature, while ostensibly assessing the same phenomenon, end up talking past each other, and their treatment of the recent important developments in manufacturing methods remain partial. In this article, we seek to clarify the main contours of the existing literature in order to reveal what is already known and what is as yet to be tackled in order to prepare the ground for a new phase of study. The article is organized into four main sections: the first assesses the key distinguishing features of new wave manufacturing methods; the second attends to what is known about the prerequisite social arrangements needed by these new methods; the third addresses current knowledge about social outcomes; and the final section sets out a research agenda consequent to this analysis