IDEAS home Printed from https://ideas.repec.org/a/eee/bushor/v57y2014i1p127-136.html
   My bibliography  Save this article

Strategic roads that diverge or converge: GM and Toyota in the battle for the top

Author

Listed:
  • Chowdhury, Shamsud D.

Abstract

General Motors (GM) and Toyota competed in the global automobile industry for many decades. While GM hung on to the Number 1 position longer than any other automaker, it lost this position to Toyota in 2008. It took Toyota 71 years to beat GM but only 2 years for GM to regain the top spot in 2011. Through a brief analysis of the history of these two rivals, I explain why GM and Toyota demonstrated different ways of falling from the Number 1 spot. I argue that the reason for the reversal of leadership positions for these two automakers can be understood by examining executive hubris and the way it either facilitated path dependence or promoted a departure from an established path for the perpetuation of market leadership. I then demonstrate how GM and Toyota acted contrastingly with respect to path dependence and how their CEOs injected hubris almost the same way in their decisions to hold on to the top position. Contrary to the longstanding myth, I also demonstrate that it was hubris—as opposed to humility—that characterized executive leadership in Toyota in its last 15 years. Recommendations for practicing or budding executives of large corporations are given.

Suggested Citation

  • Chowdhury, Shamsud D., 2014. "Strategic roads that diverge or converge: GM and Toyota in the battle for the top," Business Horizons, Elsevier, vol. 57(1), pages 127-136.
    • Handle: RePEc:eee:bushor:v:57:y:2014:i:1:p:127-136
    DOI: 10.1016/j.bushor.2013.10.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0007681313001754
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.bushor.2013.10.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Masaru Yoshimori, 2005. "Does Corporate Governance Matter? Why the Corporate Performance of Toyota and Canon is Superior to GM and Xerox," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(3), pages 447-457, May.
    2. Rehder, Robert R., 1988. "Japanese transplants: A new model for Detroit," Business Horizons, Elsevier, vol. 31(1), pages 52-61.
    3. Liebowitz, S J & Margolis, Stephen E, 1995. "Path Dependence, Lock-in, and History," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 205-226, April.
    4. Shamsud D. Chowdhury & J. Michael Geringer, 2001. "Institutional Ownership, Strategic Choices and Corporate Efficiency: Evidence from Japan," Journal of Management Studies, Wiley Blackwell, vol. 38(2), pages 271-292, March.
    5. Arnaldo Camuffo & Davide Riccardo Weber, 2012. "The Toyota Way and the Crisis: A New Industrial Divide?," Palgrave Macmillan Books, in: Luciano Ciravegna (ed.), Sustaining Industrial Competitiveness after the Crisis, chapter 3, pages 57-103, Palgrave Macmillan.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arménio Rego & Miguel Pina e. Cunha & Ace Volkmann Simpson, 2018. "The Perceived Impact of Leaders’ Humility on Team Effectiveness: an Empirical Study," Journal of Business Ethics, Springer, vol. 148(1), pages 205-218, March.
    2. Janina Sundermeier & Martin Gersch & Jörg Freiling, 2020. "Hubristic Start‐up Founders – The Neglected Bright and Inevitable Dark Manifestations of Hubristic Leadership in New Venture Creation Processes," Journal of Management Studies, Wiley Blackwell, vol. 57(5), pages 1037-1067, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francesco Lamperti & Giovanni Dosi & Mauro Napoletano & Andrea Roventini & Alessandro Sapio, 2018. "And then he wasn't a she : Climate change and green transitions in an agent-based integrated assessment model," Working Papers hal-03443464, HAL.
    2. Christian Dahl Winther, 2007. "Optimal research effort and product differentiation in network industries," Economics Working Papers 2007-19, Department of Economics and Business Economics, Aarhus University.
    3. Per Engelseth & Wuthichai Wongthatsanekorn & Chayakrit Charoensiriwath, 2014. "Food Product Traceability and Customer Value," Global Business Review, International Management Institute, vol. 15(4_suppl), pages 87-105, December.
    4. Zhewei Zhang & Youngjin Yoo & Kalle Lyytinen & Aron Lindberg, 2021. "The Unknowability of Autonomous Tools and the Liminal Experience of Their Use," Information Systems Research, INFORMS, vol. 32(4), pages 1192-1213, December.
    5. Vialle, Pierre & Song, Junjie & Zhang, Jian, 2012. "Competing with dominant global standards in a catching-up context. The case of mobile standards in China," Telecommunications Policy, Elsevier, vol. 36(10), pages 832-846.
    6. Eichengreen, Barry & Flandreau, Marc & Mehl, Arnaud & Chitu, Livia, 2017. "International Currencies Past, Present, and Future: Two Views from Economic History," OUP Catalogue, Oxford University Press, number 9780190659455.
    7. Virginie Tournay & Emmanuelle Rial-Sebbag & Doerte Bemme & Aurélie Mahalatchimy & Céline Granjou & Séverine Louvel & Anne Cambon-Thomsen, 2013. "Producing 'Human Elements Based Medical Technologies' in Biotech Companies: Some Ethical and Organisational Ingredients for Innovative Cooking," SciencePo Working papers Main hal-01560540, HAL.
    8. Kari Kemppainen, 2004. "Competition and regulation in European retail payment systems," Microeconomics 0404008, University Library of Munich, Germany.
    9. Murmann, Johann Peter & Frenken, Koen, 2006. "Toward a systematic framework for research on dominant designs, technological innovations, and industrial change," Research Policy, Elsevier, vol. 35(7), pages 925-952, September.
    10. Andreas H Hvidsten & Jon Hovi, 2015. "Why no twin-track Europe? Unity, discontent, and differentiation in European integration," European Union Politics, , vol. 16(1), pages 3-22, March.
    11. Magrini, Marie-Benoit & Anton, Marc & Cholez, Célia & Corre-Hellou, Guenaelle & Duc, Gérard & Jeuffroy, Marie-Hélène & Meynard, Jean-Marc & Pelzer, Elise & Voisin, Anne-Sophie & Walrand, Stéphane, 2016. "Why are grain-legumes rarely present in cropping systems despite their environmental and nutritional benefits? Analyzing lock-in in the French agrifood system," Ecological Economics, Elsevier, vol. 126(C), pages 152-162.
    12. Giovanni Dosi & Richard Nelson, 2013. "The Evolution of Technologies: An Assessment of the State-of-the-Art," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 3-46, June.
    13. Moldaschl, Manfred, 2010. "Why innovation theories make no sense," Papers and Preprints of the Department of Innovation Research and Sustainable Resource Management 9/2010, Chemnitz University of Technology, Faculty of Economics and Business Administration.
    14. Kverndokk, Snorre & Rosendahl, Knut Einar & Rutherford, Thomas F., 2004. "Climate policies and induced technological change: Impacts and timing of technology subsidies," Memorandum 05/2004, Oslo University, Department of Economics.
    15. Simeon Simeonov, 2020. "Path Dependence: Determinants and Impacts of Technology Adoption," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 300-310, June.
    16. Ormazabal, Gaizka, 2018. "The Role of Stakeholders in Corporate Governance: A View from Accounting Research," CEPR Discussion Papers 12775, C.E.P.R. Discussion Papers.
    17. Carmichael, Fiona & Ercolani, Marco G., 2016. "Unpaid caregiving and paid work over life-courses: Different pathways, diverging outcomes," Social Science & Medicine, Elsevier, vol. 156(C), pages 1-11.
    18. Windsor, Duane, 2009. "Tightening corporate governance," Journal of International Management, Elsevier, vol. 15(3), pages 306-316, September.
    19. Carolina Castaldi & Giovanni Dosi, 2003. "The Grip of History and the Scope for Novelty: Some Results and Open Questions on Path Dependence in Economic Processes," LEM Papers Series 2003/02, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    20. Bhattarai, Charan Raj & Kwong, Caleb C.Y. & Tasavori, Misagh, 2019. "Market orientation, market disruptiveness capability and social enterprise performance: An empirical study from the United Kingdom," Journal of Business Research, Elsevier, vol. 96(C), pages 47-60.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:bushor:v:57:y:2014:i:1:p:127-136. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/bushor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.