Review the reading below and provide one paragraph introduction and one paragraph conclusion

Honda company overview

Honda is a Japanese public multinational corporation. It is not limited to any specific product but spread far beyond its competitors & reigned in global for decades. It is usually known for manufacturing automobiles, aircraft, motorcycles, and power equipment. Honda Company dominated in motorcycling manufacturing since 1959 including other manufacturing. Honda motors is one of the largest automaker in the world with a diversified product portfolio. It registered record sales in the US market in 2015 and a strong performance in 2016. Honda has maximum revenue from North America and is the main driver behind company's growth. Honda has been continuously improvising with its products and providing wide range of technology. However, it is facing intense competition in the market with growing players targeting the global space.

Honda Company is a combination of two or more corporations which are engaged in different businesses that fall under single corporate group. Conglomerate industry usually possesses parent company & subsidiaries. This kind of industry is of low interest rates & is popular especially in the 1960s. The company was incorporated in 1946 by SOICHIRO Honda & Takeo Fujisawa with its headquarters at MINATO, Tokyo. It is a huge multinational company and is at worldwide. It company proceeds on its business functions on matrix structure. The company's revenue reaches to yen 14.60 trillion in 2016 with total equity yen 6.76 trillion. The company is stuffed with 208,399 employees & possess abundant human resources. The company secured second place in japans' automaker & is world's largest motorcycle producer.

Automotive Industry

The demand for new vehicles in the US is leading the way; with a combination of an aged fleet, new models, and attractive financing. The US economy continues to be a headwind, but has yet to slow down demand. The US sales market continues to recover from its recessionary lows and is forecast to reach 15.5 million units, the first time the market will have eclipsed the 15-million mark since 2007.Due to modest GDP growth rate, controlled inflation and better economic growth in economy auto sector is looking for robust growth in US. Honda motor is in good path to reap the opportunity in US market only. It can through its continuous research produce new technology driven automobile to claim the market share. Since last 5 years' economic indicator has changed positively, US economy has now fully come out of recession of 2008-09 and it will register robust growth in coming 5 years with controlled inflation and lower unemployment rate.

The automotive industry has rapidly grown in the last decade. With economic growth, innovation and technological advancement there has been increase in the demand of vehicles over the years. The automotive industry is an active sector in the economy and has a lot of growth potential. Along with growing demand there has been increasing competition in this sector with various players introducing multiple options targeting different segments in the market. The brands are focusing in positioning their virtual service offers and enhancing customer loyalty. The automotive industry is more customer centric, multichannel and multiform network are the key trends currently.

Economic environment of the automotive industry

Over the last five years the has been three key factors that have played a major role in the automotive industry.

Digitalization - better technology and innovation are key factors contributing towards growth

Customer behavior - lifestyle changes and customer behavior leads towards customer centric approach and enhancing customer experience

Industry pressure and competition - there increasing pressure among dealers with increasing number of players venturing into the market

In the coming years, the automakers will face challenges in terms of stricter regulations and norms. Electrified vehicles may become a viable option with a higher adoption rate. Even as the players focus on upgrading their features such as fuel efficiency, automation, sensors, etc. The trends reveal that in the coming years the market will be driven by shared mobility and connectivity of services as the consumer preferences will change due to regulations, technology and individual mobility behavior. This shift may lead to a fall in the overall annual growth rate of vehicle sales. However, in developing geographies and growing global consumer middle class it is likely that the automotive market will witness growth in coming years.

It has been observed that a major portion of the country's economic growth was connected to auto sales. When the automobile sector is doing well then, the economy is flourishing and vice versa. The US sales and North American assembly markets are seeing the numbers approaching the pre-recession levels. It has been observed that the sales had dropped significantly during the 2008 recession time. The demand for new vehicles in the United States is seen and new financing models making it more feasible for the citizens to purchase cars. It has been observed that sales have rebounded faster than expected.

Economic environment of Honda Motor Company and the auto industry

There is intense competition among the major players and marketing play a prominent role in the sales of automobiles. GM and Ford have been launching highly competitive products in the last two decades. Toyota's reputations took a beating in the last decade because of the 'sudden acceleration' issues in its cars. However, Toyota has recovered its image and gained the lost share. At present, intense competition in the US market is forcing them to innovate rapidly and provide more value to customers. Competition is also beneficial for the consumers as this brings down price, improves quality, and provides consumers with more choices.

In short, the current economic environment faced by Honda is immense competition and rising protectionism measures in the USA. However, strong consumer confidence and consumer demand are two important positive indicators of the US auto industry. Moreover, pent-up demand, more leasing opportunities and a steady job growth is driving in the US auto sector.

Economic decisions of Honda Motor Company

Macroeconomic environment of a business is crucial to all its operations. This is because all its present and future operation depends on the surrounding business environment (Hu, B.2013). Honda has continued to embrace the changes that happen around its operations to ensure sustainability and profitability. The current global motorcycle manufacturing sector is full of competition. It therefore becomes crucial for every manufacture to evaluate their strengths and weaknesses and then identify the opportunities to exploit to gain competitive advantage. Research and Development (R&D) and innovation in the manufacturing process mark the epitome of Honda's competitive advantage. It is crucial for a corporation to bank on its competitiveness and maintain it for the prosperity of its product and services.

Safety and the Environment are now an integral part of any company's business operations. This is true of Honda for all its global and local operations. Honda is a Japanese based automobile company, it has numerous subsidiaries in Asia, Europe and North America. Due to the advancements in technology, Honda will be required to make use of the latest technological trends to stay competitive. The impact of technology affects the market because people are shifting towards the purchase of environmentally friendly cars.

The business level strategy at Honda is in line with its enterprise and corporate strategies. In the motorcycle industry, the corporation is striving to build its products and services very close to its customers in a total of 21 plants that are spread across 21 countries (Hu, B.2013). The corporation also conducts Research and Development (R&D) in a total of six countries. The research and development system is tailored in its approach to produce products and services that are durable and reliable at the same time (Hu, B.2013). The focus of the Honda foundation is to have three main dimensions; social, economic and environmental issues.

Tax rates, unemployment, and government fiscal policies

The fiscal policies of are concerned with government incomes (i.e. tax collection) and government spending. Monetary policy is conducted by central banks to regulate the money supply in an economy to achieve a targeted interest rate and/or inflation rate. Fiscal or monetary policies have immense impact on the economy as these two-affect investment, infrastructure development, growth rate, output level, etc. in an economy, which in turn can affect sales, business prospects and expansion plans for a company. For example, if a country takes expansionary fiscal policy (in which the government increases expenditure on infrastructure, social sector, etc.) or expansionary monetary policy (in which credit supply is increased and interest rate is lowered) there can be more demand for Honda cars and Honda can avail credit easily for its expansion plans. However, concretionary economic policies can have negative impact on the sales and expansion plans of the company.

Tax rates will have effects on the disposable income of people. Higher tax rates will leave less disposable income in the hands of people and lower tax rates will leave relatively higher amount of disposable income in the hands of people. High disposable income will have positive effects on the sales of Honda cars; whereas, lower disposable income will have a negative effect on the sales of Honda cars. Moreover, higher tax rates will also reduce profitability for Honda, as it would have to pay corporate tax to the government. High unemployment rate will leave less disposable income in the hands of people, which will result in fall in automobile purchase. On the other hand, low unemployment rate will boost automobile sales.

Government fiscal monetary policies

The fiscal policies of are concerned with government incomes (i.e. tax collection) and government spending. Monetary policy is conducted by central banks to regulate the money supply in an economy to achieve a targeted interest rate and/or inflation rate (federalreserve.gov). Fiscal or monetary policies have an immense impact on the economy as these two-affect investment, infrastructure development, growth rate, output level, availability of credit, disposable income, etc. in an economy, which in turn can affect sales, business prospects and expansion plans for a company (federalreserve.gov). For example, if a country takes expansionary fiscal policy (in which the government increases expenditure on infrastructure, social sector, etc.) or expansionary monetary policy (in which credit supply is increased and interest rate is lowered) there can be more demand for Honda cars and Honda can avail credit easily for its expansion plans. However, concretionary economic policies can have a negative impact on the sales and expansion plans of the company.

Tax rates will have effects on the disposable income of people. Higher tax rates will leave less disposable income in the hands of people and lower tax rates will leave a relatively higher amount of disposable income in the hands of people (Hussain, M. N. 2014). High disposable income will have positive effects on the sales of Honda cars; whereas, lower disposable income will have a negative effect on the sales of Honda cars. Also, high tax rate encourages people to save more and spend less, which will affect sales of Honda cars. Moreover, higher tax rates will also reduce profitability for Honda, as it would have to pay corporate tax to the government.

Global presence of Honda

Honda motors work as a global company and hence is being surrounded by major global environmental factors. One of the major environmental factor that effect the decision making of Honda Motors is economic environment. There are several elements of economic environmental factors that has played vital role for consideration while making decisions. Regional integration refers to economies being open to world, businesses have seen a lot of opportunities. For automotive industry, the opportunities, because of free trade and other integrations, are generally generated with the openness of developing countries. Openness implies losing boundaries for free trade. This has made arrangements for Honda to invest in developing countries and get leveraged of cheap labor and raw materials. To which production cost lowers to great extent. Such as Honda Motors has invested heavily in Mexico.

Not only trade independently, but Honda Motors has also reaped the advantages of renowned brands in local regions by making joint ventures, that is another form of integration. Such as General Motors team ups with Honda to manufacture fuel cells. Recently Hitachi and Honda have announced the joint ventures for the development, manufacture and sales of motors for electric vehicles.

The increasing tension regarding danger in which NAFTA lies today, there appears threat for Honda and similar automobile manufacturers. Because of NAFTA Mexico has become an important production base for makers like Toyota, Honda Motor Co., Nissan Motor Co. and Mazda Motor Corp. But now Trump has repeatedly said he will impose tariffs on cars imported from Mexico. Honda will stick with its North American production plans as it waits to see if President-elect Donald Trump will follow through on a campaign pledge to dump the North American Free Trade Agreement when he takes office, the Honda automaker's CEO said recently.

Dodd-Frank Act or the Sarbanes-Oxley Act and the impact of regulatory issues

The Sarbanes-Oxley Act led to greater internal control of financial reporting, and increased expertise and independence among more-focused boards, committees and directors (Thomasson, T. 2015). The ways that SOX changed public companies, however, are undeniable. SOX led to greater internal control of financial reporting, and increased expertise and independence among more-focused boards, committees and directors. It imposed new reporting, audit, disclosure and ethics requirements, and created internal reporting and whistleblower structures upon which the Dodd-Frank Wall Street Reform and Consumer Protection Act has built (Thomasson, T. 2015).

The net effect of Sarbanes-Oxley Act goes beyond its components. The legislation was not revolutionary in terms of the substantive changes it made, the existing laws that comprised the fundamental principles, duties and standards for corporate governance were largely unchanged (Thomasson, T. 2015).

Environmental regulations

Honda conducts its businesses in Japan and throughout the world (including North America, Europe and Asia). A continued economic slowdown, recession and the sustained loss of consumer confidence in these markets, which may be caused by rising fuel prices or other factors, could trigger a decline in demand for automobiles, motorcycles and power products that may adversely affect Honda 's results of operations (Hu, B.2013). Regulations regarding vehicle emission levels, fuel economy, noise, safety and noxious substances, as well as levels of pollutants from production plants, are extensive within the automobile, motorcycle and power product industries. These regulations are subject to change, and are often made more restrictive.

Utilizing the most advanced information technologies, Honda has developed and innovated itself continuously. The changes in IT lead to almost Honda 's operation was controlled more effective such as; On the production process: by using the innovation means of production and mode of production, like the auto fit machine, Honda can mass product to reduce the cost, save the time and increase the capacity. Working on auto industry, Honda always understands its responsibilities for environment. This does mean Honda has been developing and innovating technologies to reduce waste and pollution. In Japan, Honda is pro-activities with many projects such as beach clean-up project.

Ethical considerations

Ethics is a part of corporate responsibility where organizations are legally and socially obliged to run business in ethical manner. In recent news Honda, has been calling many of its vehicle because of faulty airbag issue. The air bag produced by Takata airbags has the issue of propellant inside the inflator which could explode in crash sending shards of its metal casing in time of crash (Cordero, M. 2014). This kind of mishap had made many people suffer serious injury and in some cases eyes are badly effected by metal shred. Honda is losing consumer confidence for such issues and people have started questioning their quality of product (Cordero, M. 2014). But calling all vehicle which use Takata airbags is big economic decision. There are three ethical point of views in which Honda can choose to handle this situation (Ralston, D. A, 2014):

1. Individualism - This suggest one should maximize profits while being in law (Ralston, D. A, 2014). But such acts of Honda are reducing customer satisfaction and will impact Honda's profitability and sales. Hence Honda need to recall the vehicles to sustain long term profitability.

2. Utilitarianism - This says one should "Maximize overall good" (Ralston, D. A, 2014) Using this theory if Honda would not have said about their airbag issue to its stake holder and they have come to know about it in other way it would impact its maximizing overall good agenda.

3. Kantianism - The rule says - "Always act in ways that respect and honor individuals and their choices. Don't lie, cheat, manipulate or harm others to get your way (Ralston, D. A, 2014). Rather, use informed and rational consent from all parties" This supports the decision of Honda to recall all vehicles as in this decision all the framework of ethics in Kantianism is satisfied.

Besides the Takata airbag dilemma Honda has other ethical scenarios that can affect their economic decisions.

A business promotes their products through advertising, and it increases their customer. It is important to advertising in ethical manner. Unethical advertising misleading and give negative information by which customer dissatisfies. Negative advertising loses customer's faith. Honda motors create ethical advertising which makes its products better.

Honda motors used codes of ethics in which guarantee of confidentiality has been provided. They do not share employees, and customer's personal information top third party.

Honda motors use ethical sales practices, like honesty and integrity.

Honda motors use ethical price strategies they do not raise prices

Macroeconomic principles, theories, policies, and tools of Honda

Economists assess the success of an economy's overall performance by studying how it could achieve high rates of output and consumption growth. For such an assessment, three macroeconomic variables are particularly important: gross domestic product (GDP), the unemployment rate, and the inflation rate.

To begin with, Honda has looked outward from its home shores well before other manufacturers considered making or even selling products overseas. As long ago as the 1950s, when Honda was only a few years old, the company's founder, Soichiro Honda, bemoaned the limited growth opportunities in "little Japan," declaring that Honda Motor must "maintain an international viewpoint" and perceive the rest of the world as its potential customer base and factory footprint.

Honda's first strategy was to capture the global market with quality product with reasonable price. Honda stunned the auto industry with its 1974 Civic, the first car to meet stringent U.S. Clean Air Act emissions standards even as the large American automakers and Toyota were claiming it was impossible to economically produce an engine that lived up to the act's goals. Since such a global outlook it possessed it has never incurred losses in its history and has always been growing. It largely relies on consumer behavior as a demand driving factor.

Honda is a questioning, knowledge-rich organization, which demands that its workers at all levels continually poke holes in the status quo. Even as most major industrial corporations view robots and other forms of automation as the best way to reduce costs and maintain productivity, Honda prefers a different path. Honda's factories are purposefully the most labor intensive in the auto industry, employing robots only in areas that are dangerous or otherwise obviously less fit for humans than machines.

Honda believes that assemblers become disengaged and their enthusiasm for their jobs and, by extension, local innovation is muted by the presence of machines whose sole purpose is to build cars cheaper and faster than humans. It also maintains its high quality by constant research and development. Unlike other manufacturers, Honda can seamlessly produce multiple autos on a single assembly line, one after another, and switch a line over to a newly designed vehicle within hours. By contrast, it can take months for Honda's rivals to retool a factory for a new vehicle. With such efficient strategies, Honda, has managed to reach the top.

WRITTEN CASE ANALYSIS FORMAT (Ten points will be deducted from your grade if you do not follow this case format) You will be working on two (2) case studies. Your case analysis should not simply restate the facts of the case; they should take your understanding of the case to a higher level. Demonstration of a high level of understanding requires application of the various concepts and models as presented in prior management/business classes as well as this class to the situation in the case. Please analyze, do not report. This is the format to follow: 1. Cover Page: Name of the case, your name and date. II. Executive Summary: This should be the last section you work on. Start with a statement covering the contents of the case analysis. Include a brief assessment of the situation, strategic recommendation and expected results of recommended strategy. Do not exceed one and a half pages. III. Key Problems: Identify the core problems in the case. IV. Analysis and Evaluation: This section should form the bulk of your paper. Evaluate the problem and support your evaluation with facts. If you add exhibits then ensure that you discuss them. You are at liberty to utilize relevant models and concepts from your current and past business classes in your analysis. v. Recommendation: Recommend your strategic choice based on identified alternatives. Note that there are no perfect solutions. Do not forget to discuss the strengths and weaknesses of the strategy you have selected. Indicate how the strategy fits with the key problems identified. VI. Implementation Plan: This section should present the process by which the strategy can be implemented. Identify what should be done, who should do it and when it should be done. If there are challenges that should be considered then make sure you draw the readers' attention to them. Please note that your written case study will be graded as a "professional" report. Please critique your report for spelling errors and grammatical mistakes. What the company has done since the case study is of no importance. They may have implemented a strategy, different from what you suggested, making them more or less successful. This does not matter. You do not need to research the company outside of the case as provided.