As one of the most well-known car company, Yellow Auto Company was built in 1989 and occupied 54 marketing share in 2008. Why can it develop so fast and increase their share great in less than 20 years? This paper aims to conduct the case study of Yellow Auto Automotive Company, from the perspective of psychology digging the decision making issues in this company. First, a brief introduction of the company is given to let readers know the basic information of Yellow Auto. Then the relevant decision making issues are analyzed combining the theory of psychology in making decision. At last, suggestions on how to maintain long and short comings of Yellow Auto are given and how to improve their decision making in the future is also discussed.
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introduction of the Company
Yellow Auto Automotive Company was built by two brothers, Can and Caner Sale in 1989. As a family company, its shareholders are acted by the owners and the assets came from the two brothers’ family. Yellow Auto owns two stores in Gaziemir and Cambidi respectively and acts as one of the most well-known car company over the worldwide. Yellow Auto aims at selling famous brand’s cars in different areas, such as Coca-Cola. They have two options of car market, first of which are high market demand models and second are those cars with special features according to customers’ needs.
Yellow Auto followed the development step and changes of the parent company. All the employees are required to adapt to the developing steps of technologies. The top manager put eyes on three important departments: finance, sales and after-sales services. The sales of Yellow Auto were supervised by a manager and they put a lot of attention on the face-to-face communication to attract customers. In their recruitment, Yellow Auto prefers active and highly-educated young people. Employees are required to ask every detail and not encouraged to make decisions by themselves. Many rules in the company management are unwritten but stored in hearts of the family members.
Yellow Auto always cares about the level of customer satisfaction. They figured out several ways to increase customer satisfaction. They made great effort to attract future young customers, and offered sufficient communication with existing customers, such as telephone conversations and sending text message.
Analysis on the Relevant Decision Making Issues in the Case
3.1 Relevant Decision Making Issues
What kind of issues in the case
Since 2001, top managers of Yellow Auto made a risk decision under the background of a serious economic crisis in Turkey. In the whole changing process, top managers made a lot of analysis on the psychology of employees. They even asked external consultants from a university in Turkey for help to assist the policy change process well operated. Therefore, this report is going to conduct the case study of Yellow Auto from the perspective of psychology.
What decisions made /how the decisions implemented by the company
Yellow Auto used to make several decisions in the whole changing process as the following.
First, top managers of Yellow Auto made the important decision, that is, to achieve a goal of having 50% of the market share in the field. It is a high risky decision due to the economic crisis. In order to promise the smooth going of this decision, Yellow Auto decided to ask help from academics in university. Under the guidance of the external consultants, change efforts are put on increasing physical working conditions, distinguishing tasks for managers and employees, designing careers plans for young generations, and “right person for the right job” principle.
Next the implementation of these decisions by the company will be analyzed from the perspective of psychology theory. According to the transactional analysis by Berne (1961), the human psyche consists of three ego states: parent, adult and child. Yellow Auto Company acts as the adult state. They owns strong objective and always are able to evaluate and critique. When implementing the decisions, top managers evaluate the results in time, face the actual effect of the changing process and make enough adjustment to make sure correct changing direction
What’s the result
After two years changing process under the suggestion from academics, the job satisfaction and organization loyalty of employees in Yellow Auto are enhanced greatly. The following increased profitability of the company is 25% more than the profitability result of 2001. Yellow Auto also extends their sales and added two stores around lzmir. In the future, the owners of Yellow Auto would maintain the good results and continue the investing in human resources. Through the cooperation with a university in lzmir, human resources of Yellow Auto will have a bright future and bring more good results.
Evaluations on the Issues and Decisions
How important are these issues and possible influences of these issues
People are often sort of reluctant in making decisions. Analyzing the psychology of decision making for managers in company is so important that the decisions by owners and top managers would determine where the company is going to. If top managers made the wrong decision, not only huge crisis will be brought to the future of company, but also the morale of employees and loyalty to the company may be affected greatly. There are several psychological approaches for the analysis of decision making, such as psychoanalytic, behaviourist, humanist, neurobiological and cognitive (Lecture 7). In this report, the psychoanalytic approach will be applied on analysing psychology of decision making.
Next, the changing strategy of Yellow Auto will be looked into from the psychology of the decision maker. According to Lauent and Kapferer (1985), there are four factors influencing individuals’ decision making: sense of oneself, perceived risk, social factors and hedonistic factors. These factors are not only suitable for the consumers, but also fitful for decider (Berne, 1964). On the consumer level, if people are willing to buy products from Yellow Auto, they must seek a feeling of satisfaction. All human beings own the potential of hedonistic factors. Good services and products can help consumers obtain superiority and good sense for themselves. Although perceived risk may exist in their mind, face-to-face communication by staff in the company will assist vanishing the risky feeling, such as employees in Yellow Auto. They are required to contact with consumers by phone calls and message, that gives consumers a family feeling and trust the company increasingly. As top managers, they must be familiar with the psychology of consumers for better management and marketing future.
On the other hand, from the perspective of managers in Yellow Auto, they are also decision makers. They made important decision for the company development. Sense of self is crucial for the top managers and shareholders. Based on their experience in the car market, they may be able to sense sensitively where the “big fish” is. However, 50% of the marketing share is such a huge risk based on the background of economy crisis. A smart manager should be able to put a lot of attention on the perceived risk and conduct some action, such as top managers of Yellow Auto. They asked help from academics in a local university, that is, they used social factors which can be reached to guarantee their company changing process. Those external consultants were professionally good at analysing psychology of employees and provided managers good suggestions to increase the satisfaction and commitment of employees. From the excellent results of Yellow Auto, that is, they had 54% marketing share in 2008, psychology of employees and managers play crucial rules in the marketing strategy.
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Strength and weakness of the decisions made in the case
Pisharodi and Langley (1990) used to propose a Perceptual Process Model, assisting the analysis on perpetual process in the decision making. That model consists of three parts: selective attention and emotional maker response, perceptual organization and interpretation, and the attitude and behavior. The Perceptual Process Model is going to be used to analyze the strength and weakness of decisions made in this case.
First, under environmental stimuli, selective attention and emotional maker response are made (Pisharodi and Langley, 1990). That depends on a lot of factors, such as characteristics of the perceiver, assumptions and anticipation of future events. One strong strength point of Yellow Auto is that their top manager did well in this step. They perceived the right marketing trend and anticipate a bright and feasible goal for the company.
Next step is the perceptual organizaiton and interpretation. An important part is the mental process in it. Here the perceivers or managers should do the categorical thinking and perceptual grouping to make sure the feasibility of the assumption and anticipation. Top managers in Yellow Auto did the perceptual organazation and interpretation so that they obtained the results, that is, they cooperated with academics to guarentee the smooth going of the change. It is indeed one strong point in this case. However, each coin has two different sides. There are still some weaknesses for Yellow Auto. Their main point is focused on the psychology of the employees and they aimed to increase the job satisfaction and commitment of employees. Although the good morale and loyalty of employee are important for the company development and culture forming, it is vitally dangerous if all top managers’ attention is focused on the psychology analysis of employees. They ignored to put more attention on the marketing wave and flexible future. If marketing would suddenly change, all the previous work could not be efficient anymore. On the other hand, the competitors of Yellow Auto may be aware of this weak point of the company and attack Yellow Auto when the marketing is changing. If Yellow Auto is still paying attention on the psychology of managers and employees, but not to figure out strategies to face the changing market, Yellow Auto would be in big trouble.
After these two steps, Yellow Auto come out the attitude and behavior which is the last step of the Perceptual Process Model.
Recommendations
advices on ways of maintaining advantages and facing challenges¼‰and how to improve their decision making in the future
From the results of the change in Yellow Auto Company, they indeed did a good job; however, it still has the points to be improved. Here this report is going to give some advices on maintaining the advantages and how to improve their decision making in the future.
First, Yellow Auto should continue with their adjustment which maintains the current job satisfaction and commitment of employees. From the experience, increasing morale of employees indeed help people treat the company as their own family, so that they would take 100% effort for working.
Also, the recruited personnel for the “the right person for the right job” should be continued. That saves a lot of time for both managers and employees. From the psychology perspective, this change to some extent increases the morale and loyalty of employees. People can sense the feeling of being valued and nobody’s talent would be wasted in some meaningless position.
However, there are various sources of perceptual process bias that deserve more attention (Zajonc & Nieuwenhuyse, 1964). These perceptual process should be put enough attention by Yellow Auto. They may be able to slow down the development of the company. For example, the attribution error easily leads to the perpetual process bias. All human beings tend to see the favorable point as the future result. Actually that is rather dangerous. If top managers of Yellow Auto were with the attribution error, they would fail to anticipate the actual direction of marketing, so that they may not be able to make the very first decision, that is, a goal of 50% marketing share. Another serious perpetual process bias is recency effect (Broadbent, 1967). That’s why top managers in one company should have long distance insight, and be able to avoid the garble brought by some fancy recency effect.
Last but not the least, Yellow Auto should put more attention on the marketing wave and possible change. Although the good morale and loyalty of employee are important for the company development and culture forming, it is vitally dangerous if all top managers’ attention is focused on the psychology analysis of employees. Then other competitors would seize this opportunities to occupy the good marketing. The huge loss can be hardly saved by psychology.
Conclusion
This paper aims to study the case of Yellow Auto Automotive Company, from the perspective of psychology to investigate the decision making issues in this company. First, a brief introduction of the company is given to offer the basic information of Yellow Auto. As one of the most well-known car company, Yellow Auto Company was built in 1989 by two brothers and occupied 54% marketing share in 2008. Yellow Auto used to make several important decisions in the whole changing process. This report analyzed the implementation of these decisions by the company from the transactional analysis perspective. Next, the changing strategies of Yellow Auto are looked into from the psychology of the decision maker. And the strength and weakness of the decisions made in this case are analyzed based on the Perceptual Process model. One strong strength point of Yellow Auto is that their top manager did well in perceiving the right marketing trend and anticipating a bright and feasible goal for the company. However, their main point is put on the psychology of the employees and they aimed to increase the job satisfaction and commitment of employees. They ignored to put more attention on the marketing wave and flexible future. If marketing would suddenly change, all the previous work could not be efficient anymore. At last, suggestions on how to maintain long and short comings of Yellow Auto are given and how to improve their decision making in the future is also discussed. Yellow Auto should continue with their adjustment which maintains the current job satisfaction and commitment of employees. And the recruited personnel for the “the right person for the right job” should be also continued. However, there are various sources of perceptual process bias that deserve more attention, such as attribution error and recency effect. And Yellow Auto should put more attention on the marketing wave and possible change.
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