Analysing Toyota’s Organisational Practices: Management, Leadership, And Stewardship

Background of Toyota

The report brings about the discussion on the topic, “Managing, leading and stewardship, which discusses about the organisational practices. Every organisation in terms of the environmental conditions faces some of the challenges or issues, which hampers the performance of the organisation. There are a number of organisational theories that highlight on the questionable management practices. The management practices of every organisation are perceived differently by different managers, leaders, in context of the business environment. For drawing an insight into management practices and concepts, a case study has been taken for analysis to draw outcomes, from different perspectives. The analysis has undertaken on the case of the ‘Toyota’ and the company’s practices and issues, in respect of any management/organisational theory. In addition to the organisational theories, the report in the later part also focuses upon the criticism of the theory and suggestions towards better management practices (Bryson, 2018).

Toyota Motor Corporation, known as Toyota, is a Japan based multinational automotive, manufacturer located in Toyota, Aichi, Japan. Founded on 28^th august, 1937 it is a public company, dealing in automobiles, luxury vehicles, commercial vehicles, and engines. The founders and the other key persons of Toyota are Kiichiro Toyoda, and Takeshi Uchiyamada (Chairman), Akio Toyoda (President). The company has international existence in more than 170 countries across the globe. The company manufactures a number of automobile, which includes cars, minivans, and pickups. The models under the company are corolla, Camry, 4Runner, Land cruiser, luxury Lexus lines, and the other fully sized trucks.  The company is considered as the fifth largest in the world in terms of revenue (Weingarten et al., 2015).

Toyota engages in the design, manufacturing, and the sale of cars, minivans, and other sport related vehicles. The company also provides finance to the dealers and their customers to purchase or lease vehicles. Therefore, it sums up three business segments of the company including automotive, financial services and others. Toyota Motor Corporation highlighted some of the issues in their management and organisational practices through following cases. These were the case study on Total Quality Management and Lean manufacturing through lean thinking approach. Another was the issue or the case of the Swedish, which described about the managerial issues in the organisation (Bhamu and Singh Sangwan, 2014). The biggest issue was the recall in the history of the automotive. Toyota being one of the leading manufacturer in the automotive industry, affects the decisions and working of other industries. The managerial issues were noticed at the time of crisis in US, because of the policies followed by the company. Toyota follows a centralized management structure, which puts the authority of decision-making in the hands of the top executives of the company (Andre et al., 2015).

Issues in Toyota’s Management and Organisational Practices

The major issues in the organisational or managerial practices of Toyota include the Quality Control, Centralized management policies. The total quality management approach refers to the principle that every staff in the organisation has to be committed to ensure the quality in every aspect of the operations. Toyota has been practising from years on three components of the TQM, total quality management. These components are customer satisfaction, employee involvement, and continuous improvement. The issues in the managerial or organisational practices were the result of company’s desire for global expansion and the drive for earning huge profits. In the pursuit of achieving high profits Toyota, neglected the quality check of their manufacture, which hampered the reputation and the brand image of the company (Reddy, 2016).

With an increasing integrated role of the organisations in the business world, it has been analysed that the management’s role is becoming more complex and crucial to every organisation. The complex nature of the company has been studied from the perspectives of the ethics and moral theory and stakeholder organisational theory. Apart from the quality defects, the defaults in the practices led to the big issues in ethics. This was observed before and during the recall (Pearson, 2017). Due to the ethical issues, despite the quality the company suffered from the crisis of confidence. These all factors led to the negative impact on the stakeholders especially on the employees, and ignored the balance of interests of stakeholders wholly (Bundy, Vogel, and Zachary, 2018).

Discussing about the stakeholder theory and the theory of the ethics and moral values in any organisation like Toyota, it considers few aspects. These aspects are relative to the performance and success of the organisation. The belief that an organisation should maximize the benefits and interests of all the stakeholders in an organisation is the attribute defined by the theory. The interests of customers, shareholders, suppliers, employees, investors, and the community must be a highest objective for the company. The management theories put a great emphasis on the organisation’s practices, policies, processes as they set the rules or basis of guidelines for the members of the organisations to follow and achieve the objectives of the organisation (Bowen and Zheng, 2015).

Toyota, being a leading manufacturer plays an important role in the automotive industry. Toyota is known as lean manufacturing, which has become an important part of the company. Different stakeholders view or perceive the company in different manner. Despite the several recalls due to the quality defects, the company establishes to maintain the stakeholders interest, and changed some policies. Toyota stated that it would have the stakeholder’s oriented approach, which will include and fulfil the interests of all stakeholders who have interest and who affect the operations of the company. Every organisation has some of the stakeholders who influence the brand image, reputation or the profits of the company (Park and Roome, 2017). Therefore, company maintains an effective communication with their stakeholders, and their employees for the better communication of their ideas for achieving their goals. From the perspective of consumers, Toyota has the best brand perception especially on cars, which builds a unique feeling of trust and motivation to rely on the company. Being, a brand leader the company has a strong hold on the minds of the consumers (Garbelli, 2016).

Organisational Theories and their Impact on Toyota

The organisational or management theories in the company Toyota, has been effectively affecting the role of the practices, policies on the working of the company. Along with positive impacts, the stakeholder theory has been criticised to a certain level. Two main limitations, firstly it is anchored as a separate entity, which was mainly focused upon creation of economic value for itself and owners of the company. The second limitation is that it relies on regulation on the compulsory mechanism, for the externalities generated. As a result, to analyse the overall benefits, the stakeholder theory is  meant to highlight about the economic value creation rather than generating societal value.
There are some of the other theories which relates to the organisational practices of the company Toyota, is the agency theory (Li et al., 2015).The agency theory defines the relationship between the agents and the business. It relates to the relationship that includes solving the problems between the agent and the business, which may be the result of the unaligned goals. The theory of agency has also been criticised in the context of the company Toyota, in a way that it focuses only on the bilateral relationships and do not emphasize the importance or the relevance of the reality of the external environmental situations. Therefore, these organisational theories has been criticised by people from their perspectives, bases on certain grounds of the aspects of the management (Rees and French, 2016).

The company should focus upon both the internal and external environmental situations, and then devise strategies accordingly. Moreover, there should be more emphasis on value creation for both the organisational members as well as the society. The company must maintain the quality along with the quantity, which will be beneficial to all the stakeholders for the company. The company must aim at following the culture and ethics where it works, depending upon the nature and culture of the country and the organisation.

Conclusion

To conclude the above discussion, it has been analysed that the management or organisational practices play vital role in every aspects. These practices include stakeholder’s perceptions, CSR policies and others affect the performance and effectiveness of organisation in the longer-term. As with the context to the report, the company Toyota has been influencing the automotive industry largely. Over years, the company has received great importance and reputation, in the industry amongst competitors, which forms the stepping-stones of success for the company in future. The company has also faced some of the problems regarding the quality of their products i.e. cars. The report also included the application and implication of the management theories such as agency theory, stakeholder theory and the theory of ethics and moral values. These theories have been linked with the organisation. Toyota has achieved sustainability in terms of the operations, from years and has successfully implemented CSR policies effectively. Hence, the company is expected to achieve greater success in the coming future years.

References

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