TY - JOUR
T1 - Strategic roads that diverge or converge
T2 - GM and Toyota in the battle for the top
AU - Chowdhury, Shamsud D.
PY - 2014/1
Y1 - 2014/1
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=84890858313&partnerID=8YFLogxK
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U2 - 10.1016/j.bushor.2013.10.004
DO - 10.1016/j.bushor.2013.10.004
M3 - Article
AN - SCOPUS:84890858313
SN - 0007-6813
VL - 57
SP - 127
EP - 136
JO - Business Horizons
JF - Business Horizons
IS - 1
ER -