Posted By Admin on May 26, 2010
Introduction
Toyota Motor Corporation has been a dominant name in vehicle manufacturing for several decades. Despite the patriotic drive in the United States to “buy American”, the company has held its own, remaining a dominant and continually growing company in the corporate world of transportation. Though this is quite an accomplishment, in and of itself, the many layers of the company reveal it to actually be a far more complex entity than the average consumer tends to realize. Quite an international entity, TMC has tackled the automotive market not only in its home-base of Japan and in America, but in numerous additional countries, including The Czech Republic and China. In addition to this, TMC has taken the initiative to remain current with contemporary issues of concern, addressing the additional corporate responsibilities of earth and environmental issues.
In light of this, they have not only launched the production of new vehicles, but the production of the IMV Project in India, South Africa and Argentina, for the purpose of creating and identifying “more efficient and productive supply systems on a global scale”(TMC, 2006). Much more than just a car company, the Toyota Motor Corporation resides in numerous geographical sites, functioning to not only promote vehicle production, but to promote continuing improvement in the experience of mobility, striving to advance a society “where there is harmony between people, the earth and the environment”(TMC, 2006). The following report provides a comprehensive analysis of this successful motor vehicle corporation, elaborating on its seemingly infinite facets and its many ambitious endeavors.
I. Present Status
Current Financial Performance
A company could not pick a more appropriate slogan than the slogan of the Toyota
Motor Corporation: Moving Forward– because that is exactly what they appear to be doing. Reporting sales last year in excess of $179,083 million, TMC earned the title of the 8th largest company in the world by the Fortune Global 500 and 12th in terms of growth and revenue by Forbes Global 2000 (Wikipedia,2006). With a one -year sales growth of 3.7% and a net income growth of 7.1%, their reported net income for 2006 was an impressive $11,681 million (Hoover, 2006). Headquartered in Aichi, Japan, this company established in the 1930's by Kiichiro Toyota is predicted to become the largest automaker within the next 2 years. Producers of the Scion and Lexus, TMC has been named as highest in quality for both these product lines by J.D. Power's, as well as Consumer Reports. The number of vehicles Toyota Motor Corporation sells has recently exceeded 8.54 million in a fiscal year, putting them right behind GM and actually outselling Ford in some fiscal months.
According to the Toyota Motor Corporation website, the company presented with the following return data for the 2006 fiscal year: Return on Revenues-8.9%, Return on Assets-5.2%, and Return on Equity-14.0%, with a shareholders' equity ratio of 36.8%. All return statistics are reflective of results after taxes (TMC, 2006). Enjoying huge market shares in several countries, TMC is the leader in market shares in Australia and commands an impressive portion of the U.S. market, reporting 1.61B shares out, in regards to a market cap of 207.44 Billion.(TMC, Yahoo, 2006).
This is in addition to significant market shares in Europe and Africa, as well as a fast-growing market presence in Southeast Asia (Wikipedia, 2006). Well on its way to becoming the largest and most successful auto manufacturer in the world, the Toyota Motor Corporation is not only outdoing itself each fiscal year, but quickly proceeding to outdo its most challenging competitors. While General Motors continues to remain the most dominant auto manufacturer, presently, Toyota's growth rate significantly surpasses that of GM, implying that it will only be a matter of time before the company catches up to the performance of its stiffest competition and exceeds it.
B. Strategic Performance
With a company that is as active in as many diverse projects and interests as The Toyota Motor Corporation, there are numerous objectives and goals, on varying levels, being pursued at any one particular time. The following section outlines some of the most definitive and prominent of TMC's objectives, strategies and policies. A discussion will also ensue as to whether these points correlate, overall, each supporting the promotion of the others, presenting consistency throughout. Unlike other corporations, the promotion of these goals is not just implied or presented on paper, but actually facilitated through practical application, proving that TMC is not a company that is just “all talk”, but one that truly aims to achieve its goals, maintain standards, and keep its word. This is evident not only in a fiscal sense, but in the many ethical initiatives and other endeavors presently being executed by the company. Some of these pursuits will be elaborated on in detail later in this report.
Mission
Above all, the overlying mission of The Toyota Motor Corporation is to “develop and provide innovative, safe and outstanding high quality products and services that meet a wide variety of customers' demands to enrich the lives of people around the world” (TMC, 2006). In order to insure that each and every segment of TMC excels in this mission, a number of principles and philosophies have been outlined in order to meet the corporation objectives in the most beneficial manner, demonstrating enhanced efficacy. In 2001, The Toyota Way was published as a means of clarifying “the values and beliefs that all employees should embrace in order to carry out the Guiding Principles at Toyota…” (TMC, 2006). Prior to this, TMC's management philosophies, business methods and values were simply passed on as implicit knowledge. However, with the increased growth of the employee population and the corporation's international growth, it became a necessity to define such principles in print.
Objectives
In order to uphold the TMC mission, specific goals and objectives have been identified as the aim of the company in keeping with its beliefs and building on its prior sales and financial success. The three main corporate goals are the following: 1) to steadily increase corporate value as a top management priority, 2) continue to introduce and produce products that fully cater to customer needs, and 3) to become an even more competitive global company(TMC, 2006). Overall, these intentions translate into increasing sales and profit, maintaining superior quality, and continuing expansion.
Strategies
Consistent with the overall corporate goals, Toyota Motor Corporation has adopted several strategies in order to implement the objectives above. These include:
a unique management system-focused on prompt decision-making and speeding up operations
a range of in-house committees
a system that emphasizes problem-solving and preventative measures-done by immediately flagging problems and sharing them with the appropriate individuals/departments (TMC, 2006).
Policies
Although realization of Toyota's goals are of the utmost importance, TMC recognizes the importance of increasing their feasibility by instituting an underlying set of policies and principles that must be considered in all activities in order to meet these objectives. The first is a set of Guiding Principles that outline the policies and philosophy by which all transactions should take place. The second is a set of behavioral guidelines, known as The Toyoda Precepts, which dictate the manner in which all transactions should occur. Both of these are summarized in the tables below.
Table 1.
Guiding Principles
1. Honor the language and spirit of the law of every nation
2. Respect the culture and customs of every nation and contribute to economic and social communities
3. Provide clean and safe products
4. Create and develop advanced technologies
5. Foster a corporate culture that enhances individual creativity and teamwork value
6. Pursue growth in harmony with the global community through innovative management.
7. Achieve long-term growth open to new partnerships
The Toyoda Precepts
1. Be contributive to the development and welfare of the country by working together
2. Be at the vanguard of the times through endless creativity & inquisitiveness
3. Be practical and avoid frivolity
4. Be kind and generous
5. Be reverent and show gratitude…
*All information cited from The Toyota Motor Corporation Website
Corporate Governance
Board of Directors
Key Players
The Toyota Motor Corporation has several key members, including founding President and Board Member: Katsuaki Watanabe. In addition, fellow board members and key personnel include: Fujio Cho, Chairman, Katshuhiro Nakagawa, Vice Chairman, as well as several Senior Managing Directors. Most notable of these is Takeshi Suzuki of the Finance and Accounting Group. Several additional Board Member and Executive Vice Presidents also reside in posts pertaining to different factions of the corporation. Other individuals earning mention are Honorary Chairman: Shoichiro Toyoda, and Hiroshi Okuda as a Senior Advisor and Member of the Board.
Level of Investment and Participation
Unlike the turnover rate and attrition of many corporations, key executives at Toyota seem to make it a lifetime investment. Undoubtedly, this is at least in part, a function of the family-oriented, team-driven, ethically-motivated environment that Toyota emulates. However, these corporate characteristics will be discussed in later pages of this analysis. Also both notable and impressive is the level of participation demonstrated by executives, even at the highest level. Fostering a genuinely reciprocal dynamic, top officials are highly involved in all aspects of the company, often presiding over many facets, while always promoting the underlying ethical tenets of the corporate philosophy. One example of this significant individual commitment is demonstrated by Mr. Takeshi Suzuki who dons not only the title of Chief Financial Officer, but also functions in the roles of Chief Business Development Officer, Chief Accounting Officer, and finally, as one of the several Senior Managing Directors. Not a unique occurrence, this is the case with other pertinent Toyota personnel, as well (Yahoo, 2006). And, yet, this level of commitment and participation seems to engage in the “trickle effect”, demonstrating itself at the highest levels and working its way down. Managers and personnel below the Board of Directors are not known to simply “rubber stamp” the decisions passed down to them, but are instead encouraged and even expected to engage in input and create improvements. In turn, the appropriate executives welcome such critique and utilize this constructive criticism to create a better product, enhanced work environment and improved production methods (TMC, 2006).
Corporate Contribution & Talent
In relation to corporate contribution, Toyota Motor Corporation has a significant, and consistently growing, international presence. Because of this, it is absolutely imperative for such a company to possess within it the knowledge, skills, cultural expertise and a broad spectrum of other talents essential to successfully functioning at its optimal potential. A vast array of skills is necessary to address the many diverse facets of such a large corporation. In addition to addressing the cross-disciplinary needs of such a large business entity, marketing at an international capacity presents its own set of challenges pertaining to cultural issues and foreign business practices. Employing high level executives in both Japan and the United States, those who hold the most power within TMC are well-versed and educated in both business and cultural issues. However, in an effort to cover all bases, both domestic and foreign, TMC has also established a committee specifically for the purpose of insuring appropriate management in all of these areas that is commonly referred to as the IAB. Comprised of “10 distinguished advisors from overseas” (TMC, 2006), members are considered experts in such areas as politics, economics, business, and the environment, among other specialties. This panel of advisors renders advice and constructive criticism, which TMC executives utilize to implement improved strategy and better overall relations, both inside and outside the corporation. For the purpose of further assurance of quality and feasibility in all endeavors, Toyota also engages a wide variety of committees and conferences– all for this same purpose of soliciting information and advice from a wide range of stakeholders. Some of these include the Round Table Conference, the Corporate Philanthropy Committee and the Stock Option Committee (TMC, 2006). It should also be noted that TMC stock is publicly traded on the NYSE and NASDAQ, with only 1% being owned by “insiders”, virtually diminishing any conflict arising in order to gain personal profit (Yahoo, 2006).
Top Management
Top Players and Expertise
Just below the Board of Directors exist several key management personnel. Too numerous to name each and every one of them, some of the most significant members of this prestigious group are as follows: Yukitoshi Funo, Chairman and CEO Toyota Sales, U.S.A., James E. Press, Chief Operating Officer, Toyota Motor Sales ,U.S.A., and finally, Bob Carter, Vice President and General Manager of The Lexus Group. These particular employees, as well as their counterparts, share many of the personal traits, as well as industry expertise, as their mentors on the board discussed above. Skills that they may not already possess are fostered through the corporation. While they all possess the qualifications and skill sets to perform in their respective functions, additional training and mentoring is an integral component of TMC. In addition, while all new hires are screened for the ethical and personal qualities that are consistent with the company's ideal, working in the Toyota environment nurtures continued understanding of the benefits of these assets through the strict adherence to the Toyoda Precepts expected of all. To further promote the acquisition of the TMC standard of knowledge, Toyota established the T-TEN program in 1986. As “the pool of people trained and qualified to maintain and repair today's technology-laden cars and trucks is in decline…Toyota offers its Toyota Technical Education Network to attract, develop and retain more highly skilled technicians” (Toyota, 2006). Graduates of this program finish with the extensive level of knowledge necessary to meet the criteria required of technicians at Toyota. For many who desire promotion, this technical expertise provides a strong foundation later applicable to higher-level management positions and beneficial to the company, as a whole
Performance Responsibility and Interaction
The performance achievements of the Toyota Motor Corporation are a function of employees at all levels. This is due to the reciprocal relationship within the corporation. While the Board of Directors and high level key officials may compose the company laws and guidelines that must be followed to insure success in all areas, it is often the input of other employees, especially management, that determine what guidelines need to be changed and what new ones need to be defined. Further, it is ultimately the compliance of lower level personnel that determine, through their behavior and interactions, whether or not these tenets are applied resulting in either success or failure. Top managers are integral in this process, often acting as a liaison between the guidance of key executives and the input of employees “lower on the ladder”. Further, it is the supervisory skills of these managers that monitor adherence to standards of the employee population and the success it yields. In this sense, managers are an absolute key component in the process of strategic management (TMC, 2006).
According to Toyota Motor Corporation's Annual Report, their strategic approach to management requires the implementation of many systems to insure adherence and success. Some of these mentioned previously are the IAB, the Round Table Conference, the Corporate Philanthropy Committee, the Stock Option Committee and, of course, the Ethics Committee. In addition, both expectations and preventative measures are articulated in the guiding principles, themselves, such as GP #5 stating that “through communication and dialogue with our employees, we build and share the value “Mutual Trust and Mutual Responsibility” and work together for the success of our employees and the company” (TMC, 2006). Employee performance that exemplifies this standard does not go unnoticed. While TMC is always open to new relationships, rising talent and fresh ideas, promotion from within the company is always a priority in this “family-like” environment.
III External Environment: Opportunity & Threats
Societal Environment
Economic
Excess Capacity
Numerous variables are presently factoring into the present and future sustainability of the Toyota Motor Corporation and the auto industry, as a whole. Of the various potential influencers, perhaps the most significant are those of an economic nature. The first of these is the issue of Excess Capacity. This is an area of concern that can certainly be considered a detriment to any auto corporation. Addressed by CSM Worldwide, a firm specializing in auto industry research, their findings indicated that in N. America and Europe (the two localities where the majority of revenue and profits are earned) “…excess capacity was an estimated 17% and 14%, respectively…(and that)…excess capacity conditions in N. America could continue for several more years but could be mitigated by the capacity reductions announced by Ford and GM” (CSM, 2006).
Pricing Pressure
Another influencing factor is Pricing Pressure. However, while this is certainly another issue of concern within the industry, it is foreign companies, such as Toyota, that have been the catalyst for such an event. Undoubtedly, excess production of vehicles (as alluded to above) has caused the need for lower prices in order to liquidate product that is overstocked. This has caused a pricing competition between manufacturers, each attempting to drop their prices lower or offer better rebates and lower-rate financing than the next. The result is a benefit for the consumer, translating into a “buyer's market”. However, for the auto manufacturers, pressure to continually lower prices to generate sales is resulting in significantly lower profit margins. Despite this, Toyota may actually find such an occurrence to be an advantage. This is because foreign auto manufacturers who are setting up shop in the United States (often referred to as “transplants”) are the cause of this pricing environment. The lower prices that they can offer with the construction of new, huge, efficient production plants in The States has forced American automakers to follow suit or lose sales (Yahoo, 2006). Therefore, in this case, it seems that Toyota is not a victim, but a perpetrator. It is TMC that has put the pressure on domestic auto manufacturers to crunch their prices, reducing their profit. Such an occurrence is a detriment to the “bottom line” of these American companies, which simultaneously strengthens the status of TMC in the market.
Consumer Spending
The spending trends of consumers is yet another variable that affects the success and sustainability of, specifically, TMC, as well as the rest of the industry. Presently, this appears to surprisingly be an asset. Despite the competition to lower prices, current trend projections have identified a spending pattern that is predicted to persist for at least the next ten years by marketing research data. This is the more frequent purchase of the upper scale clients who are purchasing high- end models at significant price points.(Yahoo, 2006) These frequent sales of high-end vehicles, such as The Lexus, bode well for TMC, off-setting any deficits due to lower economy class prices, and even increasing overall sales.
Energy Costs
This discussion of influential economic factors could not possibly be complete without mentioning the inflating cost of energy. With little explanation needed, the increasing gas prices over the past few years have undoubtedly made it more expensive to operate vehicles, resulting in the diminished sales of vehicles requiring larger amounts of fuel to run and exhibiting less fuel efficiency– most specifically SUVs and other full-sized vehicles.
Rising Commodity Prices
Rising prices of commodities used in vehicle production, such as certain resins and steel, have also affected the “bottom line”, increasing production costs and shrinking profit margins across the market.
Rate of Currency Exchange
Finally, fluctuations in the exchange rate of currency, specifically the diminished exchange rate of the U.S. dollar as compared to most other world currencies, has “created downward margin pressure on auto manufacturers that have U.S. dollar revenue with foreign currency cost”(Yahoo, 2006).
Socio-cultural
From a socio-cultural perspective, the result of an increased number of women
working over the past decades has been elevated household incomes, allowing for more frequent purchases of new vehicles (Yahoo, 2006). Another example of a sociocultural factor affecting not only the Toyota Motor Corporation, but the industry, as a whole, is an enhanced awareness of spending behavior patterns, based on targeted populations for different vehicle models. For example, middle-income families will be the market focus of SUV's, while sports models will be marketed to single purchasers with more of an expendable income (Mobility Trends, 2006).
Technological
The Toyota Motor Corporation has been affected by the environmentally-friendly demand for hybrid technology, promoting their development of such vehicles. This market demand is further supported by the necessity to find alternate means of fuel as an alternative to gas and the rising prices associated with it.
Task Environment
Industry Competition
Competition within the industry is a major influential factor for any auto
manufacturer. As discussed above, lower pricing and excess capacity has generated a buyer's market and a rivalry between auto dealers not present to such an intensive extent prior. Naturally, Toyota must consider such factors when marketing their own product lines.
Immediate Environmental Influences
A majority of the immediate influences that have the capacity to currently affect operations or performance at The Toyota Motor Corporation have been addressed prior, such as competition, economic issues,and buyer-biased market conditions.
Future Threats & Opportunities
Toyota Motor Corporation is in a unique position compared to its rival American
auto manufacturers. While there are overlying external factors that inevitably affect the sustainability and performance of the industry, as a whole, TMC is in a position to benefit from some of these. Some of these, specifically, are the pressure to lower prices due to excess capacity, inflated prices of gas and commodities, and production costs. Fortunately, TMC is the part of the catalyst in this situation, forcing the dominant American companies (their fiercest competitors) to diminish prices in an attempt to solidify sales. This, in turn, weakens the profit margin that these companies previously enjoyed, allowing the previously considered “underdog”, TMC, to now gain momentum in catching up to “the Big Three”: Ford, GM and Chrysler. This is partly a function of TMC's increased growth and production of significant manufacturing plants (such as in Texas), which allow them to provide more cost-efficient manufacturing.
In addition, TMC has become a front-runner in the new environmentally
conscious market, researching and manufacturing hybrid vehicles that address both the issues of environmental concern and gas inflation. Complimenting this, the aggressive promotion of their Lexus line caters to the current economic buying behavior pattern of higher income consumers who are making more frequent and more expensive purchases. Overall, it appears that in an auto market that is presently falling victim to less than satisfactory selling conditions, the Toyota Motor Corporation has evaded the detrimental impact. Their strengths of smart and cost-efficient production (including avoidance of producing excess product, which will be elaborated on in detail later), their strategic marketing and management practices, as well as their ability to capitalize on consumer patterns and concerns to promote sales is evidently paying off. In a selling environment that is presently diminishing the “bottom line” for others, the ability to overcome such obstacles is perhaps one of TMC's greatest strengths. The growth figures presented in the first part of this analysis are indicative of TMC's ability to conform to adversity and take advantage of otherwise negative influences when more dominant industry competitors could not.
Though few weaknesses lie within the Toyota Motor Corporation, perfection is an
elusive concept and thus, there is always room for improvement. Toyota did experience some negative publicity due to a 1991 lawsuit by Carryn Drattel-a Toyota driver who was victim of an auto accident (Public Bonds, 2005). At the time, she contended that TMC's lack of more appropriate and complete safety measures, specifically relating to airbag design, were the cause of her extensive injuries. Because of this and the often long-term unforgiving mind of certain consumers, TMC will undoubtedly need to continually implement only the highest industry safety standards in order to deflate any preconceived notions of inadequate safety design in their vehicles. Not TMC's only legal complaint, other lawsuits have been wagered, all of which have pertained to safety issues. However, such claims against auto manufacturers are not uncommon and often come with the territory as accident victims and families often seek to file suit against as many applicable parties as is realistically possible. In light of this it does appear that, again, TMC has demonstrated the capacity to learn from a weakness and transform it into a strength, as they now produce vehicles with only the most advanced safety features, and engage a production system which identifies defects or improper manufacturing in an immediate manner during the manufacturing process. This system is explained in detail in a latter section of this review.
In addition, the issues being faced by American manufacturers in response to
Union Employee Rights can be a potential weakness that TMC should simply be aware of and take measures to avoid within their own company. In these cases, the influence of auto industry unions has made necessary down-sizing a near impossible task, as employees who are laid off have a right to continuing pay benefits. Should a corporation need to lay off individuals due to a decrease in profit generation, it is counterproductive to still engage in paying this employee population and voids the fiscal efficacy of such a cutback. Though it is far from a present issue, a volatile market can make even the strongest and smartest manufacturers potential targets for such occurrences as the need to downsize the employee population. Toyota should evaluate the need for future documentation addressing the circumstances surrounding such an occurrence, therefore eliminating any potential threat of employee pay requirements despite the necessity of lay-offs. However, Toyota Motor Corporation's proactive approach to most problem-solving and preventative issues instills confidence that this will most likely not be an issue, as they will create an offense stance, long before they find themselves on the defensive stance. Finally, their conservative production methods, and smart management and sales strategies, can ward off any future necessity of cutbacks, maintaining a continually growing sales base.
Internal Environment: Strengths and Weaknesses
Corporate Structure
The corporate structure of Toyota Motor Corporation is illustrated by Chart 4 on page 11. Overall, final decisions of major significance, or ones that have the ability to make a company-wide impact, are determined by the board of directors. However, TMC is proud to announce the validity and consideration they give to the input of employees at all levels, as well as the consumer. Ultimately, it is this input that is the catalyst for final determinations of varying kinds and scope. The guiding principles articulate this process, stating that major decisions are only officially confirmed “after comprehensive discussions at cross-sectional decision making bodies” has taken place. (TMC, 2006). On a more immediate level, smaller scale decisions, such as those that apply directly to one specific facility are generally the primary decision of the on-site management and finalized by the site executive manager. Despite this, it is always required that any decisions are in compliance with the standards set for the overall organization. Again, this is stipulated clearly in the guidelines stating that the corporation (more specifically, the board of directors and chief executives) will “distinguish the division of responsibilities of each organization unit” and they must then ensure that their decisions are consistent with the standards and ethics of the rest of the organization, as well as the processes for determination outlined (TMC, 2006).
Individual organization units are determined by a combination of three criteria: geography, function and projects. While specific locations are generally defined by function–designated as management facilities, production plants, research sites or sales venues, each specific location also has its own on-site management team, which is then overseen by upper level executives specializing in that aspect of the corporation and the details unique to its function. Therefore, organizational units and the decisions made in relating to them, are determined by geographic location, as well as function. Special projects are equally assigned key individuals, which oversee decisions pertaining to that particular locale and assignment.
The structure set forth by the Toyota Motor Corporation is a well-defined “chain of command”, which can be clearly identified by members of the company. This is in part due to the corporation's meticulous print literature detailing the organizational “hierarchy”. One of Toyota's definitive strengths, much time and effort has been put into outlining the organizational decision sequence, not only identifying which branches or site locations report to which upper level management offices, but even which employees report to which supervisors or managers within each locale. Apparently an issue of great importance to Toyota, such a structure is conducive to the smoothest possible execution of the entire operation, as well as a preventative measure to avoid any type of insubordination. Cross-sectional committees regularly review this structure, as well as the efficacy of its execution and the employees' adherence to it. This insures that it remains consistent with the overall company objectives, strategies, and policies, as well as between the varying site locations and functional aspects of the corporation. This collaboration and consistency allows the execution of all business facets to run like a “well oiled machine”. Any inconsistencies are immediately addressed and program alterations instituted where necessary. Strict adherence is maintained between American facilities, as well as those overseas by a board of international overseers, whose job it is to review continuity in operations among all units. Undoubtedly, reflective of the ethical standards and meticulous work habits of the culture that established Toyota, this undeniably beneficial strength is often in great contrast to the somewhat ambiguous or loosely enforced corporate structures of TMC's American counterparts.
Specifically listing all of Toyota's facility locations and the entity that each reports to within the corporate structure would be far too lengthy a task to complete as Toyota addresses are now a significant presence in many areas of the world. In addition, it is almost a moot point in light of their continuing growth, as it seems new expansion plans seem to be becoming public knowledge on an almost constant basis, making it almost impossible to formulate a complete and accurate list in full. However, establishing its N. American presence in 1957, they currently operate fourteen manufacturing plants, alone, with two under construction and plans rumored for even more. The final product from these plants is sold at more than 1700 Toyota, Lexus and Scion dealerships nationwide. Each of these sites conforms to the clearly defined corporate guidelines regarding structure, as well as the more than 38,000 employees that they employ (Toyota, 2006).
Corporate Culture
Toyota Motor Corporation's corporate culture seems to emulate the amount of emotional intelligence that most business entities now attempt to foster in their own environments. The reciprocal relationship that the corporation attempts to encourage allows each and every individual to feel as though they are a valued team member whose opinion and input is significant and appreciated. Individuals are encouraged to share ideas and critiques, and in order to do so, to think innovatively and creatively. Such an ambience fosters critical thinking and allows its employees to develop individual leader skills. On the other hand, the correlating concept of management (even at the highest level) being expected to listen to the thoughts and perceptions of those below them, utilizing this information to develop new policies, products and strategies, encourages executives to remain productive team-players and not just “hierarchical dictators” (Vault, 2006).
How employees and management are expected to behave, and the manner in which they should model all their interactions is clearly stated, without question. These expectations are undeniably defined in both the Guiding Principles, as well as the Toyoda Precepts. As mentioned earlier, these tenets not only detail how one should conduct themselves in business, but also the manner in which they should do so. TMC has a well-defined perception of the characteristics that their employees should possess, not only in regards to business acuity, but in an ethical capacity, as well. Unlike many cut-throat fiscally driven businesses, Toyota is driven as much by honor, as by the bottom line. They present a persona in which how they conduct themselves is just as important, if not more so, than meeting their sales objectives. And yet, this makes sense, as an enhanced public persona will certainly increase their fiscal earnings. This positively correlated relationship is key to their success.
The overall workplace ambience is intended to be not only one of teamwork, but one of “family”. It is an environment where all individuals are working towards one common goal. It is an atmosphere where reciprocity, respect, humility and appreciation are key. And, yet this is not a concept that ends with the employees, but a feeling that is intended to be passed on to each new customer, making them feel as though they, too, have become a member of the Toyota family. The way TMC words their objectives and goals is indicative of this attitude. In most cases, objectives do not just state the specified goal, such as “becoming the largest auto manufacturer world-wide”. But, instead, while the target goal is specified, the complete goal stated goes on to specify just how this goal is to be achieved, or in other words, in what manner it should be achieved. One example of such an aim is their creed to “become a truly global enterprise that is respected by all peoples around the world”, exemplifying not just their financial target of becoming a presence worldwide, but one that fosters respect and values the individual, as well as diversity while doing so. (Toyota, 2006). Clearly, the significance the corporation places on the type of environment they intend to sustain is apparent in each and every goal statement, as well as confirmed by the emphasis they place on the importance of their ethics committee which functions to review and maintain such moral standards.
Because of the manner in which goals are stated, consistency between TMC's intended corporate culture and its objectives, strategies, policies and programs is fairly constant. As stated above, how an employee should achieve each and every goal in an ethical manner is instilled into them on a persistent basis. The culture is not inconsistent with the corporation's goals, because they are determined with the ethical culture and workplace ambience in mind. The strive to apply the concepts of recognition and teamwork are also extremely conducive to all of the organization's goals, as this makes for employees who feel more valued and, in turn, will strive to put forth their best efforts. This improved performance improves the corporation, as a whole.
In regards to productivity, TMC employs a somewhat conservative approach, eliminating excess capacity or “waste”. This system is elaborated on in detail in a latter section. However, when speaking about productivity as an overall corporate goal they refer to their system as “automation with a human touch”, indicating the emphasis on human value and the residing emotional intelligence that is inherent in TMC's culture (TMC, 2006). In addition, the Toyoda Precepts, themselves, urge all levels of management in production and decision-making to “be practical and avoid frivolity” (TMC, 2006). In regards to quality, they openly state that their mantra is “quality first, customer first”, which again implicates an environment that dually places value on quality and people (TMC, 2006).
Because Toyota is now such a diverse international presence, it is extremely important that the corporation not only fosters a respect for the corporate culture, but that the corporate culture fosters a respect for the cultures of the countries the organization operates in. TMC seems to go above and beyond in this area, exceeding “political correctness” and extending what is indicative of genuine acceptance and appreciation for all ethnicities and cultural diversities. This is evident in several areas of the company literature.
Overall, it is undeniably apparent that Toyota strives to create an ambience of respect and appreciation for individuals within the company, while maintaining a persona of respect and appreciation for the external cultures in which they operate and the people which comprise them. Appreciation for the individual and promotion of a team atmosphere is evident in statements put forth by the Guiding Principles, such as the expectation for both the employees and company, as a whole, to “foster a corporate culture that enhances individual creativity as well as team value” (TMC, 2006). Meanwhile, their equally vehement goal to emphasize appreciation, respect and honor for cultures outside the corporate environment is also indicated repeatedly through Toyota's principles and tenets, such as in their oath to “respect the culture and customs of every nation and to contribute to their economic and social communities”(TMC, 2006).
Despite the intentions an organization places in print or the persona they often strive to put forth, the reality of the internal environment is not always consistent with these intents. However, in the case of the Toyota Motor Corporation it seems that employees who were interviewed in different capacities, as well as those who posted comments or blogs on the corporate culture, actually provided mostly favorable statements, remaining consistent with the corporate and cultural goals TMC has strived to maintain. It seems the only significant critique uncovered was one in which the organizational culture was identified as predominantly male-oriented. However, this could simply be a function of the industry content, itself, and its vast appeal to the interest of more males than females. This employee also reported that she did not feel inadequately treated in any way and that, despite, the disproportionate male population, she still felt a valued member of “the team” (Vault, 2005).
Corporate Resources
Marketing
Toyota Motor Corporation is presently pursuing several new marketing goals. While two of these target markets are geographically oriented, the third uniquely focuses on the environmentally aware demographic. Pertaining to these segments, the first objective is to continue their expansion into foreign territories, broadening their overall global capacity. On a more domestic level, TMC is taking advantage of the challenges presently faced by their fiercest competitors, in order to close the market gap and become the dominant auto manufacturer in America. Lastly, they are striving to corner the new and upcoming market segment of environmentally aware individuals with the production of their latest innovations in hybrid designs.
International activity:
TMC now has a total of 52 production bases in 27 countries, producing 5,610 units (in thousands) overseas last year, alone.
Domestic activity:
TMC produced in excess of 2,354 units (in thousands) in their domestic location of Japan, while opening a new location in Texas to meet the increasing market demand in the states.
The Market for New Innovations:
Through their Global Vision 2010, TMC seeks to “become a leader of global regeneration through its outstanding environmental technologies…in preparation for a recycling oriented society”(TMC, 2006). In light of this, they are presently marketing several new products conducive to this goal including the Prius, the first mass-marketed hybrid vehicle and several other innovations to complement this segment of the market. These are described in greater detail in the Research and Development section.(TMC, 2006).
Consistent with their aspiration to increase their global presence, become the number one auto manufacturer in N. America and the world, and, finally, to always be aware of the consumer needs and sensitive to ethical, economic and environmental issues, the execution of these specific target markets is conducive to the overall mission, objectives and strategies previously discussed. Further, the implementation of a hybrid technology and continual pursuits of technological improvements that mirror the present demands of the consumer and issues of the cultural climate, serves as confirmation that TMC is actually strategically upholding the causes their precepts, guidelines and promotional statements claim they are sensitive to. The subsidiaries and product lines generating these goals are obviously the Toyota brand, as well as the Lexus, Hino and Diahatsu. Lexus has just developed their enhanced model the RX400 to take advantage of the upper-scale buying market, while Hino caters to the production of trucks and buses, and Diahatsu focuses on the market for compact vehicles in Japan. Each of these subsidiaries and the models types that they specialize in are indicative of Toyota's marketing strategy to market by demand. Further, TMC's research and design facilities are used, in part, to functionally increase the marketing objectives. These facilities conduct major component and body design in five market regions: N. America, Europe, Australia, Asia, and, of course, Japan. One function of each of these R & D bases is to modify base vehicle models from Japan and alter them to reflect the tastes of each individual market.
In terms of market performance, Toyota has been excelling in selection of the product they produce, its selling price, promotion and placement. They have done this through the marketing strategies and techniques discussed above, in addition to their strategy of matching specific products within a certain market segment to an even more refined sub-segment. It is all of these marketing techniques, and the success they have yielded, that has demonstrated an enhanced knowledge of marketing and its application within TMC. This particular aspect of marketing allows them to construct a consumer profile for each of their models, identifying the needs of a specific consumer group and targeting them as the preferred market for a selected vehicle that fits those needs. For example, SUVs would be distinctly marketed towards those upper-middle class families who have a need for increased space and convenience. This is an effective way to manipulate the marketing budget in an attempt to render the optimal return in sales. The charts below illustrate the percentages of Toyota vehicles produced and marketed in each of the 5 major market segments, both domestic and internationally, as well as the percentage that each yields.
The chart above, Sales by Market Region, is most significant because it is indicative of a marketing trend that is currently present within Toyota. The huge segment of sales that are taking place in N. America, as indicated above, actually exceeds that which is representative of sales in Japan. This continuing trend demonstrates Toyota's increasing demand in N. America. Undoubtedly, this trend is contributing to TMC's expansion plans in The States, as is reflected by their new Texas production base. Despite that there is still a significantly higher percentage of vehicles being manufactured in Japan, than any other region, this will certainly change, correlating with Toyota's increased American popularity. This current trend will certainly contribute to future productions taking place outside of Japan, in at least an equal capacity, and will contribute to the growth of Toyota manufacturing plants in the U.S. This is consistent with TMC's strategy to produce where the demand exists. The result will be the emergence of significant revenue, taxes, new jobs and other economic factors that will arise as a dependent variable.
Finance
As one may already expect, Toyota Motor Corporation is flourishing in all aspects of the market. Not only are they succeeding where expected, but overcoming adversity and taking advantage of profit situations despite certain detrimental industry conditions. Unlike others, their strategic production plans and marketing strategies have allowed them to avoid such negative issues, such as production excess or diminishing sales due to rising fuel prices. The continued and consistent growth of Toyota has allowed it to persistently move in a progressive direction, not only turning a profit for the past decade, but steadily beating the previous year's revenues.
Toyota's increasing financial success is certainly a function of the successful execution of its objectives, missions, strategies and policies. Not only are all aspects of the organization consistent with the ultimate goal of positive fiscal realization, but this consistency creates an environment conducive to growth and profit. Quite simply, the complementary nature of all facets of the corporation has been responsible for TMC's growing “bottom line”. The meticulous attention paid to the interdependence of all company areas, has created an overall smooth flowing process that yields consistently positive results, especially in a financial sense. As of November, 2006, Toyota was reporting a net revenue of $21,036 Billion dollars!(Toyota, TMC, Hoover, 2006).
Other sales and financial figures have already been discussed throughout the prior aspects of this review. However, probably the most telling indicator of TMC's success is the numerous additional business ventures it is continuing to support and develop. Certainly, a company that was not enjoying a significant amount of financial success would not be in a position that would allow such a variety of projects of a varying scope. These include endeavors in the areas of biotechnology, energy, the environment, wellness, marine related projects, aerospace and entrepreneurial promotion.
In regards to the biotechnological field, TMC opened their business development division in 1989, the Toyota Venture Enterprise in '96 and, finally, Afforestation Business Development Center in 2001. In the area of Wellness, the company provides consulting information for wellness businesses, as well as outsourcing for medical and senior care institutions. In 1997, the Marine Business Development Fund was established, while TMC's Aerospace involvement includes spatial information services, flight training and airfield management. Finally in 1995 the Entrepreneurial Project was established, focusing on contracts for brake-related work, vehicle inspection services and many other varying opportunities for developing businesses. With the majority of these ventures occurring internationally and pertaining to an area that needs each specific type of development, these newest endeavors are another example of TMC's consistency in maintaining goals that are representative of all their missions, objectives and strategies. While each of these is an indicator of TMC's financial success, they also support causes that the corporation proposed to contribute to, while confirming their intentions of contributing internationally to a better world and the people in it.
However, despite all of the above-every figure, every new program, every growing trend and statistic that confirms it-the single most significant confirmation of Toyota's impressive and continuing financial success is in the amount of philanthropic activities they engage in yearly and in an ongoing capacity. Highlighting five major areas of contribution, the Toyota Motor Corporation financially supports causes pertaining to education, the environment, culture and the arts, international exchange and, of course, local communities.(TMC, 2006).
Research and Design
Toyota Motor Corporation's most dominant research objective is to “search for the means to produce the ultimate EcoCar”. In addition to translating this vision into a reality, they also strive to enhance and improve the present vehicle designs they manufacture, as well as the quality and efficacy of the components that comprise them. Overall, the majority of their research involves developing from the “perspective of achieving energy security and diversifying energy sources, which is necessitated by the dwindling supply of petroleum” (Toyota, 2006).
With an annual Research and Design Budget of 1,528 Billion in 2006, the 2007 fiscal year has been designated an increased budget of $1550 Billion (TMC, 2006). This aspect of the corporation budget has been consistently increasing for the past decade, reflecting the emphasis TMC is putting on their R & D segment of the company. Consistent with company objectives and their mission, this is partially due to the meticulous research going into the improvement of presently existing models, in order to assure an absolutely superior standard of quality and safety. This is undoubtedly a function of the previous litigious issues TMC has had to deal with regarding safety standards. The other objective of the R & D operation simply deals with improvement of old models and the creation of new and innovative vehicles. This is consistent with the corporation's marketing objectives to become the dominant auto manufacturer world-wide and to corner all aspects of the market. This includes targeting the environmentally aware consumer, as well as the cost-challenged consumer who can benefit from the purchase of a vehicle that uses alternative fuels, avoiding the necessity of falling prey to rising gas prices.
The role of technology in the R & D department is tantamount to none, utilizing only the most advanced means to create a second generation of selected models. Some of these include the Celica, which is now known as the Privia, the Soarer (which is identified in the states as The Lexus), as well as a new and improved Tacoma, Prius and Solara. In addition, a large aspect of this upgrading includes development of interior and exterior designs that are more suitable to customer preferences, as well as functional. Lastly, a great deal of improving pre-existing models entails the testing of products and parts manufactured in the United States in an attempt to ensure consistent quality and build on it. More effective emissions systems are a present focus regarding improving the components of vehicles.
While the role of research and design managers is to act as a liaison between upper management and the workforce, one of their most significant responsibilities is to work as part of a team, ensuring that the research and design efforts are consistent with the other goals of the corporation. For example, the design implementations should move towards vehicles and components that are more environmentally friendly. In addition to this, improved designs should include the variable of increased cost-efficiency for both the consumer and corporation, as well as take into consideration the feedback from buyers and dealers, as is reflected by sales and marketing surveys. This inventory of criteria is demonstrative of the cross-functionality of all R & D goals, as well as the amount of cross-functional teamwork that is necessary to facilitate such objectives. The table below reflects TMC's present research and design projects and goals.
PRESENT RESEARCH AND DESIGN PROJECTS
Development of Lean Burn Gas Engines
Development of Common Rail-Direct Diesel Engines
Development of Modified Engines that run on Alternative Fuel
(such as compressed natural gas)
Development of electric vehicles
Development of Improved Hybrid Vehicles & Fuel Cell Hybrid Vehicles
Creation of Enhanced Exterior and Interior Designs
Testing of Products and Part from The United States
(including Emissions)
Creation of Improved “Second Generation” Vehicles
Modification of Japanese Base Models to reflect Tastes of Each of the Five Major Selling Markets
In addition to the objectives and projects listed above, Toyota Motor Corporation is presently working on its next generation hybrid vehicle with the installation of the THS II. The THS is an acronym for the Toyota Hybrid System, which was already mass marketed in the Toyota Prius. With the production of the Prius, Toyota outperformed all other companies in this aspect, including the “Big Three”. At the time, no other car company had yet manufactured or developed such a beneficial alternative system and certainly none were close to mass marketing such a product. This was a huge feat for TMC, truly confirming its future in the forefront of the industry. Now, while other companies are still challenged to create such an engine, Toyota is already developing its second generation hybrid system, appropriately named the THS-II. Toyota's dedication to its hybrid research, as well as its other ventures, is demonstrative of the cross-functionality of the Research and Design projects and their dedication to the numerous issues TMC has claimed to support. These include the environment and alternatives to rising fuel costs.
Race Car Development
One last and final endeavor of the Research and Design teams at Toyota Motor
Corporation is that of developing race cars. Specializing in the production of the Formula 1, TMC works to create a better performing race car. They are presently becoming increasingly involved in the race circuit.
Operations
Jidoka and “Just-in-Time” Operational Systems
Consistent with Toyota's philosophy-oriented environment the corporation has established an operations system for production that is tailored to not only their goals, but the strategy and awareness by which they conduct all business. It is a “system that is steeped in the philosophy of the complete organization and imbues all aspects of
production…it has come to be well known and studied worldwide” (TMC, 2006). It is primarily based on two principles: Jidoka and “Just in Time” manufacturing.
Jidoka
Jidoka is a concept that highlights the visualization of problems and identifies them before manufacturing is completed. Utilizing state of the art equipment, this technology identifies a malfunction or a defective part immediately at its time of production. The machine involved is programmed to recognize this deficiency and automatically stop, forcing the operators to address the problem. “As a result, only products satisfying the quality standards will be passéd on to the next process on the production line” (TMC, 2006). Such a process promotes cost efficiency within the corporation, while ensuring an absolute standard of quality at all times. Undoubtedly, this is also a response to TMC's earlier litigious problems resulting from safety defects, providing an example of the company's pursuit to address a prior weakness and transform it into a positive strength. This process also exemplifies the corporation's ability to adapt, conforming to requirements not previously met and changing to better the entire operation.
Just-in-Time
The second concept inherent in the Toyota manufacturing system is that of “Just-in-Time” manufacturing, which declares that products or vehicles are produced only as consumer orders and demand require. It is this system that has, in part, allowed Toyota to evade the issues of excess capacity that Ford and GM have encountered. By adhering to such a system, costs can be kept at a minimum, while profit can still be maximized avoiding the necessity of selling at a loss just to move aging product.
The combination of Jidoka and “Just in Time” production is often attributed as the cause of the financial troubles that have fallen on domestic dealers. Technology plays a vastly significant role in TMC's manufacturing operations, immensely cutting down on lag time or time wasted from the slower pace of total human production. This is in contrast to TMC's American opponents, who still engage in predominantly human labor. Toyota does, however, still engage a large percentage of industry employees– enough to truly make an impact on the economy of any locality where they set up an establishment.
Integral Role of Mid-level Managers
Mid-level production and operation managers are probably some of the most integral members of the organization. It is their responsibility to oversee all operations occurring in the base that they preside over. This entails an enhanced ability to multi-task, see to meticulous details, engage in effective problem-solving should challenges arise, and the financial sense and insight to ensure that the rate of production will render the results necessary to meet the financial goals set for the overall corporation. In addition to these characteristics, managers in the area of operations must possess the unique amount of emotional intelligence that dealing with a large population of employees requires. For without the proper guidance, operational employees will lack the motivation needed to ensure timely quota completion. And, yet, these managers must also possess the necessary technological knowledge to oversee the operations that function in their department or facility.
Because the functions of these managers are so extensive, as well as so significant to the success of the entire corporation, special training facilities have been established to ensure their preparedness for such a position. The North American Production Support Center is one of these teaching facilities. Modeled after the original in Japan, it is meant to ensure that American managers receive the same level of expertise as their Japanese counterparts. Its purpose is also to ensure a consistent level of quality. Located in Georgetown, Kentucky, this newest training facility will serve plants that are located in the United States, as well as Mexico and Canada (Toyota, 2006).
Senior managing director of TMC, Atsushi Niimi, states that “as Toyota continues to expand its manufacturing worldwide, our regional production centers will play an important role in taking on the challenges we face…the NAPSC represents the hard work and commitment of our team members who are building a better, more successful Toyota” (Toyota, 2006). Gary Convis, executive vice president of Toyota Motor Manufacturing North America, explains the result of such a training regimen, stating that “through this cascading system at the NAPSC, we will train everyone using the same method…as a result, our team members will be able to better focus on quality, safety and efficiency” (Toyota, 2006). Training at the NAPSC will include:
hands on operational experience
techniques in stamping
body welding
painting
plastics
assembly
quality control
internal logistics
axle and engine assembly
machining functions
casting functions
The NAPSC is budgeted to host 29 training team members. This number includes
seven full-time regional trainers, all of which have been selected on the criteria of their 16 years of manufacturing experience (on the average). These individuals will preside over additional programs targeted specifically at management functions. These include:
production
maintenance
supervisor and management systems training
shop-floor simulations
observation and coaching of team members
Demonstrating Toyota Motor Corporation's deep commitment to excellence, this
98,000 square foot facility was built to follow all the guidelines provided by the U.S. Green Building Council. Such guidelines provided the facility with the appropriate guidance to make sure that they adhered to only the highest environmental standards for site development, selection of materials, water savings, quality of the indoor environment and energy efficiency. The building represents a $12 million investment, indicating TMC's commitment to standards (Toyota, 2006).
Toyota presently employs over 38,000 individuals in their workforce in N. America, alone. Including sales and manufacturing operations, research and development, financial services and design, TMC's N. American investment is currently estimated at more than $16.3 billion. The corporation's purchases from N. American suppliers sum up to more than $26 billion. By 2008, research and study estimates predict that the Toyota Motor Corporation will have the capacity and operational facilities to produce 1.88 million vehicles on the N. American continent. In addition to this, estimates reveal a potential production 1.44 million engines and the manufacturing of over 600,000 automatic transmissions (Toyota, Wikipedia, 2006).
Human Resources
Human Resources at Toyota Motor Corporation serves to meet the needs of all employees, as well as create an environment that is both productive and conducive to employee satisfaction. Toyota's HR department is fully aware that happy employees translate into better job performance. This equates to the kind of increased production and quality that renders satisfied customers. Ultimately, how well Human Resources addresses the needs of the employee population and how well they maintain an emotionally intelligent workplace environment directly correlates to Toyota's “bottom line” and overall financial success. This involves several areas of the employee experience that Human Resource Managers must attend to. These include: hiring quality individuals that possess characteristics consistent with company standards, continued training of existing employees, promotion of diversity, resolution of disputes, maintenance of an overall system of positive reinforcement, executing standards of evaluating job performance, and all other issues pertaining to maintaining satisfied employees and an environment conducive to this goal. Some of the major functions of this department are outlined and evaluated below.
Recruiting and New Hires
Probably the words of Honorary Advisor Eijii Toyoda describe it best: “because people make our automobiles, nothing gets started until we train and educate our people” (Toyota, 2006). Upon applying at any division or facility run by Toyota Motor Corporation, a potential employee must first demonstrate that they possess characteristics that are conducive to the ethics oriented environment of TMC. They must also show the willingness to learn and be malleable, agreeing to adapt as necessary. Once this has been established, all new hires go through extensive training before actually performing in their full job capacity. This includes trainings on overall company standards, ethics and expectations, as well as specific trainings aimed towards the job that they have been hired to perform. Part of this is reading material, including the booklet “Toyota-Developing People”, which is distributed to all employees: new, old, high and low. The purpose of this literature is to “create a common understanding that the source of Toyota's competitive spirit is in its human resources development and to promote the creation of workplaces where personal development takes place at all sites and at all levels” (TMC, 2006).
Trainings and Seminars
One of Toyota's most dominant strengths is that of the training and learning experiences that the human resources department organizes and provides for its employees. Of the utmost importance, TMC provides continuing training opportunities throughout an individual's career with the organization, hosting seminars at all career levels. This is due to the corporation's inherent philosophy that the business, as a whole, is only as good as its employees. They recognize that the employee population is the one most significant independent variable that sales and success is dependent on. In light of this, Toyota offers divisional training and assignments, as well as systematic company-wide workshops. Regardless of whether a training is specific to a certain division or a company wide enrichment opportunity, there is always a consistent emphasis on OJT or on the job training.
In order to identify the specific skills necessary for varying positions and to ensure that training is tailored to the employees' needs for the unique position that they hold, TMC has defined two broad employee categories. These are “Professional Staff” and “T-Shaped Human Resources”. They are defined as the following:
Professional Staff
o “Associates who can create added value on their own and contribute to society, as well as enhance their own strengths and exercise teamwork”.
T-Shaped Human Resources
o “Team members with a broad range of skills, such as English Language skills and operational knowledge (the crossbar of the “T”), as well as highly specialized knowledge and experience in a particular field (the vertical bar of the “T”).” (TMC, 2006).
Professional staff are generally those employees who occupy office and
engineering positions, while T-Shaped Human Resources are those who tend to function in the more technical positions. Based on these classifications, trainings are conducted for the entire corporation, as well as based on a specific division, the skills that division requires, and the level of those skills that they already possess. English language training is included as one of the areas of specialized skills taught to divisional groups (Toyota, 2006).
The Toyota Institute
In 2002, the Toyota Institute was established as one of TMC's training tools. Its purpose is to “reinforce the organic integration of global Toytoa companies by way of sharing the Toyota Way as well as to promote self-sufficiency” (TMC, 2006). More specifically, it serves to promote true globalization and the core values that are inherent throughout the corporation, outlined in the Guiding Principles and set forth in the Toyoda Precepts. A business within the business, its president since inception has been Fujio Cho, with the assistance of 16 full-time associates managing the operation, as well.
Within the Toyota Institute, two major programs of study exist: The
Global Leadership Program and the Management Development School. An integral portion of the training is specifically aimed towards middle-management employees, who are the “go betweens” of the operation, aiding the communication flow between higher executives and hands-on/divisional employees. The purpose for instituted a company-wide, all encompassing educational program for overseas, as well as domestic operations,
is to ensure consistency and that all middle-management personnel understand the full concepts of The Toyota Way, best practice sharing and drafting of action plans that are consistent among all TMC affiliates. In addition, the company stresses the importance of all divisions being empowered to function in a capacity and manner that is contributive to the “creation of a global human network” (TMC, 2006). The charts below illustrate the variables that comprise both the Global Leadership School and the Management Development School.
TWO MAIN COMPONENTS OF TOYOTA INSTITUTE
Global Leadership School
Objective Development of executive human resources capable of showing leadership from a global perspective
Content · Enhanced leadership ability based on the Toyota Way
· Reinforced business management knowledge and skills
Global human networking
Management Development School
Objective Training of management to systematically understand and implement the Toyota Way as it pertains to each core business area (production, sales, etc.)
Content Production: Understanding of the Toyota Way at various functions at TMC manufacturing companies
Sales: Understanding of the latest marketing methods, etc., based on the Toyota Way in sales and marketing
Attendants Middle management from around the world
Evaluation of Job Performance
In an attempt to conform to the fairest and most ethical standards possible, TMC has placed a significant emphasis on evaluating job performance up to four times annually, depending on position and longevity. It views these evaluations as an opportunity to identify areas where an individual can benefit to obtain advanced learning, rather than labeling of areas that are regarded as their failures, faults, or weaknesses.
Positive Reinforcement and Promotion
Rather than focus on the negative or deficient work performance, Toyota places great emphasis on positive reinforcement, offering incentives for a job well done. These are applicable to individuals, as well as to teams or divisions. Promotion from within is always a priority and employees are rewarded with promotions in responsibility, position and salary for excellence in job execution. Those who don't perform to standard are encouraged to strive for such recognition and aided by further trainings and the mentoring of team members.
Dispute Resolution
Should such an occasion arise where an employee has a grievance or a conflict appears to be irreconcilable between fellow workers, human resource managers are fully trained to engage in mediation and create a resolution that once again will instill harmony, mutual respect and appreciation between the parties involved.
Diversity
For a corporation that strives to become a dominant international presence, it goes without saying that diversity is of the utmost importance. Toyota Motor Corporation is just one of these companies, spreading its wings from continent to continent, necessitating an employee population that has the cultural knowledge and ability to successfully and respectfully communicate with each and every community, worldwide, that TMC engages in business with. Toyota's emphasis on cultural diversity and the respect it places for each and every country, its laws, its cultural beliefs and business practices, people, and communities is apparent within the statements put forth in the precepts and guiding principles. However, even beyond this, there are two sub-groups of individuals that Toyota has felt a responsibility to recruit and encourage their participation within the TMC environment. These two populations are women and people with disabilities.
Women
As part of TMC's 2002 Diversity Project, several initiatives have been
geared towards the advancement of women within the corporation. Toyota expresses that this movement is based on the concepts put forth in their Global Vision 2010, aiming towards the “creation of environments featuring people from around the world with various abilities and values who are given the opportunity to experience self-reliance as individuals” (TMC, 2006). In order to promote a workplace atmosphere that is more attractive to female personnel, Toyota has implemented a three-pronged approach to accomplish such a task. Their goals are the following:
To help enable females to work and raise children at the same time
To assist in women's career building
To diversify the working environment and increase employees' awareness
As a component of this initiative, Toyota had introduced a system for mothers
which includes the following components:
A child rearing leave up to the child's 2nd birthday
Work hour reduction up to the child's 2nd birthday
The ability to work partially at home until the child's 8th birthday
Special breaks for child nursing care
Exclusion from late night duty and limitation of after-hours work until the child's 8th birthday
Use of childcare facilities within the workplace
One of the most attractive aspects of this Toyota initiative is the child care
facility, itself. Maintained as a learning conducive and nurturing environment, it is open until 10:30 every night. This allows both working mothers and fathers the opportunity to address their work responsibilities, as well as be able to put in later hours should an increased workload come into play. Based on the original child-care facility in Toyota City, Japan, appropriately named “Toyota Child Care Bubu Land”, the centers are all located on-site, allowing parents to check in on their children anytime throughout the workday or to be able to be present immediately should a problem arise. In addition, there is always a resident nurse on duty, complementing the many caring and nurturing child caregivers already present.
As a result of the Toyota Motor Corporation's Diversity Project and the
steps they have taken to make the workplace conducive to the lives of women, the number of female employees has now grown steadily each and every year since inception of the program. Statistics show that as of March, 2003, TMC employed only 5,800 females, accounting for a mere 9% of their total workplace population. Today, many new female students graduating with varying degrees are choosing TMC as their career choice. This is in part due to the awareness Toyota tries to promote at many colleges and universities, through recruiting seminars and literature, highlighting the many benefits available for the female employee.
Consistent with this tradition, Toyota held its first women's seminar, Career Design Forum, in November of 2002, targeted at approximately 400 female employees. The purpose was to “help the women build a network within the company and to give them the motivation to create their own career visions independently and actively” (TMC, 2006).
Individuals with Disabilities
Within the employee population at Toyota Motor Corporation, there previously
presided only 800 disabled individuals in workplace positions. This statistic was current as of March, 2003. While the current employment laws, and the EOE act, requires certain workplace environments to employ a consistent ratio of 1.8% of their employee population as individuals with disabilities, Toyota sought to improve this quota, becoming a leader in presenting these often talented potential employees with increasing opportunities. Overall, Toyota purports its aim is focused on “helping the disabled achieve autonomy within society, making it a basic rule to have them work together with other employees. Human consideration is given to the conditions of their disability at the business sites and ways are devised to accommodate them in the workplace…” (TMC, 2006). Toyota recognizes that despite certain limitations, these are individuals who can contribute in an equal, if not even more outstanding, capacity as their able counterparts. It is actually behooves TMC to take advantage of a population that has so much to give, when others do not and lack the insight to recognize their potential worth.
In general the “Law for Employment Promotion of the Disabled” provides that private companies which employ 56 or more employees must maintain a quota of at least 1.8% disabled individuals within that population. This includes both the intellectually, as well as physically, disabled. However, by the end of March, 2003, Toyota Motor Corporation had increased their percentage to an impressive 1.95%. This is a percentage of their employee population that has increased on a consistent basis every year since (TMC, Toyota, 2006).
The Results:
As one may guess, Toyota Motor Corporation generally employs individuals for life. Not just as a job position, but as a lifetime career choice, individuals who gain employment with TMC enjoy career-long security. The environment is conducive to the growth of the individual, as well as the growth of the family. As such, it provides allowances and assistance for all the challenges that life may bring. Whether this be pregnancy leave, child rearing help, training for promotion or other benefits, TMC seems to have it all. Such a comprehensive corporation makes it unnecessary to find employment elsewhere, due to lack of advancement, benefits or salary. It not only provides a career, but a family-oriented network of support that its individuals can lean on throughout their life span, maintaining professional and personal friendships that may otherwise be hard to come by.
Final Summation: Overall Strengths, Weaknesses, Opportunities and Challenges
Overall, Toyota Motor Corporation is a corporation that has the potential to become the front-runner of the auto manufacturing industry. In addition, it has the sustainability to remain a dominant entity and not just a periodic success. Of the many qualities that are conducive to making such an accomplishment possible, there are a few that seem to have the most significant impact in this area. The first of these strengths is TMC's all encompassing emphasis on the value of humans and the necessity of instilling within them a sense of value. Through the Guiding Principles, the Toyoda Precepts, and the manner in which management is executed, employees at Toyota are aware of their unique, and appreciated, position within the company. Unlike many American based companies, Toyota recognizes the value in valuing employees. For, in the end, it is their performance and motivation that can “make or break” the production and financial success of any corporation.
Ironically, another of TMC's strengths is in its application of technology and the utilization of machinery to aid in the manufacturing process. One of the first to execute such a system, their unique concepts of Jidoka and Just-in-Time have allowed them the speed and precision in manufacturing vehicles that has afforded them the opportunity to increase production profits and close the gap between themselves and their American based rivals, such as Ford and GM.
Despite these most recent accomplishments, Toyota, like any company, has not been without its disadvantages. One significant weakness of the corporation is its prior litigious issues and the claims of inadequate safety standards brought against them. Quite impressively, Toyota has undoubtedly turned this weakness into a lesson learned and implemented a standard of quality and safety that is now hard to match. However, the memory of the public is often unforgiving and opinionated, making it difficult for Toyota to overcome the preconception of negativity that such prior publicity may have instilled in some consumers. TMC must also work diligently to promote sustainability within The States, despite the current trend reflected by the mantra “Buy American”.
Toyota may also face future challenges as a function of its diverse expansion. Seemingly enjoying exploration into areas other than the auto industry, TMC must be cautious not to spread itself too thin. This is the downfall of many a corporation who enjoy success, seize the opportunity to expand into broader areas, and then lose sight of their fundamental area of expertise. However, in light of TMC's continual growth, it appears that this would not be an issue at this time or any time in the near future.
Lastly, Toyota has the unique opportunity to play a role in the overall advancement of culture. Not only does it possess the ability to make fiscal gains, but also the potential to actually change the future of mobility. Through its continued emphasis on environmentally-friendly research and alternative designs, TMC will continue to be a pioneer in the realm of improved transportation. While the corporation has already proven themselves with their Prius, the first mass-marketed hybrid vehicle, their present technological projects will certainly set future trends. In light of the information presented in this report, as well as the historical patterns of TMC, itself, it is fairly safe to assume that the results of their research and design team will not only set trends, but more possibly set the standard by which all future manufacturers will follow. In consideration of Toyota Motor Corporation's continued growth, the manner in which it executes its business, the value it places on human resources and the technological advances that are not only conducive to, but aimed at the improvement of culture, as a whole, it is hereby a safe assumption that Toyota will be the driving force in the auto industry before long–a force with the sustainability and feasibility to drive both American and international culture into the next era of mobility and convenience.
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