Management Theory And Practice Of Toyota Motors | Ethical Issues And Dilemma

The relationship between ethics, leadership and decision making

Discuss about the Management Theory and Pratice of Toyota Motors.

First of all, the requirement is to understand that what an ethical dilemma is. It is a situation in which company deals with some unethical issue that may or may not offer some benefits or gains to the company. This report will be discussed on the ethical issues and dilemma of Toyota Motors Corporation Australia which is known by its trading name Toyota Australia. The issue was poor safety and quality control in this organization. With the help of quality control and labor management, this organization cooped up with the ethical issues. A significance of leadership, ethics and decision making will also be discussed in regard to Toyota Australia. There are various leadership styles, and importance of the leaders in an organization will also mentioned with relevant data. A famous write said that “A leader is a person who knows the way, shows the way and goes the way”.

Toyota Motors Corporation Australia is a world famous car manufacturer that produces, develops and sells the vehicles like Tiara, Crown, Corona, Camry, Corolla, Apollo, Nova, Avalon, Aurion, Camry hybrid, etc. Toyota Motors Corporation Australia is also famous for its Lexus vehicles in Australia. It is a multinational company that is world’s second largest automaker of vehicles. The employees of Toyota were about 316,000 in the year 2008. The employees working in Toyota are from around the world. It is calculated that this company employee’s number is first after Toyota motors, the general motors’ in which the employees are 266,000. By the end of the year 1989, Toyota motors started its manufacturing in Europe where plants were installed and some other plants in United Kingdom.

There is an immense relationship between the three concepts as all of them are interconnected to each other. It is observed that the concepts of ethical behavior are applied by the leaders using effective decision making. The leaders are responsible in implementing the ethics into the organisation. They know how to manage the process of decision making through using ethics in the company. They embrace best practices that so that ethical decision can be determined at the workplace. Many business organizations face problems related to ethnicity that affects the process of decision making for the leaders. It is very relevant for leaders to understand the relevance of ethical behavior and decision making.

The Toyota Company was facing many social and ethical dilemmas that are related to their quality control and human resource management. These issues must be solved as soon as possible as the company is turning towards a global platform. These issues will lead in negative reputation of the company around the world. It is observed that the technology used in the car manufacturing is commendable. Also the technology present in the cars is also very attractive. It is a multinational organization that can be assumed on the first rank in the car manufacturing but the worst fact is that this company is facing ethical dilemma that must be improved (Avolio, & Yammarino, 2013).

First ethical issue of Toyota motors was “abuse workers”

First ethical issue of Toyota motors was that the workers of this company was tortured and abused. This is the reason due to which the plants of Toyota manufacturing in the Japan were famous. They were known as the worst sweat shops of the world. The operations taken place in the shops of Toyota motors were known as slavery and human trafficking. There are thousands of “Karoshi” who claimed against Toyota every year. The meaning of this term is “over work to death”. The suicides rates of the employees were very high as well as the employees were injured (Weaver, & Agle, 2002).

There was no criterion of compensation to the employees due to which Toyota motors has become a well known company of union busting. It was noticed that Toyota built their plants in the poorest states and countries so that they can take advantage of cheap labor resource around the world. The worst part was they keep the employees as a temporary worker for four years. The goals of this company were to lower down the average wages and salaries of workers. Due to this, Toyota is one of the most profits earning corporation (Dent, Higgins, & Wharff, 2005).

Globalization is providing huge opportunities for the company but due to the environmental issues and rules and regulations of the government, many companies are unable to take advantage from those opportunities. Companies are opening their branches in the international markets but they are facing many challenges due to the policies related to the environment. The manufacturing of motor vehicles is very high and governments of the countries are providing free trade pass due to the globalization (Gardner, Cogliser, Davis, & Dickens, 2011).

It directly or indirectly affects the companies like Toyota motors who are in the manufacturing of cars and vehicles and due to this many climatic changes problems are arising. It was observed that companies who are in the manufacturing of cars, releasing fumes. Toyota motor is also releasing fumes that contribute in the climatic and environmental problems. There is an invention of electric cars in the market that is a threatening situation for the car manufacturing companies including Toyota motors (Treviño, & Weaver, 2003).

The reality is that in future more appreciation will be received by electric cares due to fact that they are environmental friendly cars. This is the reason due to which Toyota motor is also planning to manufacture electric cars in the future to save itself from the competition (Reynolds, & Olson, 2001).

Second ethical issue of Toyota motors was “environmental issue”

The severe issue of Toyota motors is poor management of the quality control that results in poor quality of goods and services provided by the company. The desire of Toyota motors was too high as they want to supplant general motors’ which is world’s number one car manufacturing company (Sonenshein, 2007).

It was observe that Toyota motors focus on the expansion of the organization by manufacturing great numbers but not on the quality and management of the company. There was an issue with the accelerators and gas pedals. This could lead the company to feel potential guilt for the criminal act also for the customer’s abuse. When any company gives priority to its bottom line interest instead of the safety and security of the customers in such cases the companies are declared as fraud and unethical company that must be terminated form the management and organisation (Reinartz, Krafft, & Hoyer, 2004).

It is one of the most effective theory in which is a quality improvement theory. The aim is to focus on all the good and bad results produced by the any activity takes places in Toyota. This theory relies on the intrinsic value of the consequences. It is little different from the ethical theories’ as under this theory the rightness and wrongness of any activity depends on the motive of the organisation. The utilitarian theory manages the decision making process of Toyota by providing effective ways and methods (Ordonez, Schweitzer, Galinsky, & Bazerman, 2009). The reputation of the company was going down due to the ethical issues. Due to this, the image of Toyota was severely affected. However, the company decided to improve the image by establishment various theories like utilitarian theory, ethical theory, etc. The president of Toyota motors, Akio Toyodo met the Prime Minister so that the company can regain the brand image and the confidence of the customers (Brokks, 2013).

Toyota is now applying descriptive ethical theories and how effective decision can be made in the company to normalize the situation. Descriptive ethical theory like utilitarian theory helps in analyzing the ethical decisions made by the managers. Now, the decisions are made through comprehensive discussions on the management at the board meetings and many other meetings takes place by the decision making bodies of Toyota motors. The decision passed by Toyota motors not only affects the customers but also has a significant affects on the investors, risk like high competition, volatile, etc. (Gardner, et.al. 2010)

Third issues – “Poor quality control”

Ethical theory or a theory of justice states that there must be freedom and equality in the organization. It is a situation in which the demand and need of the labors are fulfilled and provide them their equal rights. It is very important to keep the equity of the labor of the company to keep happy and satisfied. The Ethical theories of Toyota motors is based on a mutual trust and understanding between the labor of the company and the management (Mehri, 2006).

Toyota motors have realized the value of uses of theories, ethical decision making, vision, mission, etc. in which the reflection of effective leadership present. This can be visible by application of effective styles of leadership, managerial styles, and management of the quality control and labor, etc.

The view point of this theory is that a Toyota motors can do not any activity against any individual as they are the holders of moral and equal rights. The theory of ethics states that having a right refers to having a special kind of protection. There are various types of moral rights and rules for the employees working in Toyota that are applicable on all the employees. Ethical theory is constructive in nature as it claims that each individual should value the norms and follow them irrespective of any circumstances. In early time, Toyota was not able to fulfill the ethics of their employees as they were no paying right wages and salaries to their employees. There were many activities that do not come under ethical theory (Barney, 2001).

There are various mutual concepts between them like if there is justice in the organization of the employees than it is a signal that there is growth and development taking place in the right direction of the company.  This believes that the labor and company both share common goals that are to earn profits and revenue for the company which can ultimately benefit both the parties. The management of Toyota motors expects that the labor should remain stable in the company and give their best performance to the same. In exchange of this, Toyota provides labor a sense of justice and equality that help them to cooperate with the rules and regulation of the company. In order to have an effective practice of ethical theories, there must be good relation between the both parties (Lockett, Moon, & Visser, 2006).  

The type of decisions making applied in Toyota motors is very unique and philosophical. They believe in short term decision making which is more effective. They also think that despite of earning more profits and sales it is also very relevant to understand the role of the employees working in the company. This is the reason due to which Toyota motors observes with the managerial skills of the employees. Afterwards, the decisions are made by using virtue theory in which the philosophy of the companies are considered as right according to the morals. This principle is than applied to all the organization covering all the major areas of the internal and external environment of the company. It also helps to monitor the competition present in the external environment. This theory helps in effective execution of work and roles so that the objective of the company can be achieved (Carrigan, & Attalla, 2001).

Theories that can help the Toyota motors to correct the ethical issues in the organisation

There are four basic styles of the leaders that help the companies depending on the nature of the requirement like autocratic leaders, democratic leaders, bureaucratic leader and laissez-faire or delegating leader. The type of leadership style present in Toyota motors is autocratic style of leadership. Autocratic leaders are the leaders who have a direct control on employees. The process of decision making is also done by the leaders without the interference of any employees or team member. This type of leadership style results is rigid rules and regulations with disregard of the input and outputs (Giacalone, & Rosenfeld, 2013).

In this style, a sole leader makes the organizational decisions that are based on his own views and ideas with no consultancy of any other member or even the management of the company. There is an immense potential in autocratic style of leadership if it is mixed with other styles of leadership like little bit of democratic and bureaucratic leadership styles. There is no scope of the effective communication in this leadership style. Neither, there is an establishment of good relations among the employees and team members. The biggest advantage of autocratic leadership style is that it provides fast results and very quick decisions no matter what would be the final outcome (Ledingham, Bruning, Ki, & Kim, 2000).

There are many disadvantages of autocratic leadership style that is the entire team depends on the leader and his decisions. It can be effective when the leaders are strong and competent. In such cases, the leaders have to take decisions on their own and the team worked efficiently and effectively. However, if the leader is not competent and do not have moral and ethical values than the companies have to struggle. An autocratic leader affects the ethical and moral norms of the company by imposing his own decision on other regardless of any other opinions and final outcomes (Callahan, & Jennings, 2002).

The organizational structure and culture of Toyota motors is an overall response of the hard work of employees and the managers. There are lots of challenges and issues faced by this company in the past but with the effective management this company has made a great position in the global market. It is a global leader of car manufacturing company so the culture and structure of Toyota motors is very innovative and dynamic (Waldman, Ramirez, House, & Puranam, 2001).

The aim is to maximize the human resource and their capabilities. It is not easy for such an international company to survive in a competition which is very tough. However, with the use of prominent policies and strategies, this company is enjoying a great position. The structure of Toyota motors shows that this company facilitates the learning of the employees by providing them training and growth programs. It also highlights the relevancy of development of appropriate support of the culture in the success of the business (Witziers, Bosker, & Krüger, 2003).

The company’s organisational and cultural structure is very much supportive towards principles, ethical issues, moral, innovation, beliefs m etc. The company believes that it is important to understand the needs and wants of the customers as well as of employees so that they can retain for longer period of time. There was a reorganization of Toyota motors taken place in the year 2013, in which this company had gone through from some corresponding changes. Before that, the company was very rigid and follows hierarchy. Now days, there is a change in the team work, quality, secrecy, etc. there are continuity in the process of improvements (Ziv, Wolpe, Small, & Glick, 2006).

The leader who is ethically strong and takes decision according to the social and moral values creates a very positive impact on the organization like Toyota motors. They help to improve the culture and behavior of the organization by imposing positive decisions on the team and groups. He is the one who is capable of bringing difference in the company through his focus on what is right and what is wrong. The desire of these leaders is to serve others and make a positive difference (Dane, & Pratt, 2007).

There are few activities that can show how Toyota motors are successful in the process of decision making. It is not easy for the leaders and managers follow each and every ethic. However, the managers and leaders of Toyota motors face the challenges and complexities and take ethical decisions so that the company is able to survive in the social environment. It is also important to manage ethnicity on a daily basis. Managers and leaders of Toyota motors take day to day ethical decision for the organization in order to be in a competition of sustainability and ethnicity (Srivastava, Bartol, & Locke, 2006).

It is relevant to the leaders to win the trust and confidence of the employees and they have to keep in mind that they should not done any activity that leads negative impression and erode the trust between the team and themselves. This is the way to operate in an ethical way in the company. It is not relevant that a company who is following all the rules and regulations can be ethical and moral in nature. There are other actions and activities that must be conducted to fulfill the ethical aspects of the company. It includes sustainability, human welfare, environment, social justice, equity, etc. (Jean-Marie, Normore, & Brooks, 2009)

It is also vital for the leaders to not to exempt any individual from meeting the expectation of ethnicity. There must be no excuse and reasons to break the rules for the ethical aspects. Many companies appreciate the ethical activities and moments and cheer those movements. Leaders should also discuss the ethical ongoing activities so that the employees become familiar to such activities and take effective participation in the same (Carroll, 2004).

Conclusion

As a conclusion for this report, Toyota Motors Corporation Australia is one of the most famous cars manufacturing company of the world that is facing dilemma with the ethical issues such as quality control, environmental problems, labor issues, and many others. In order to improve all these issues Toyota must follow all effective leadership theories and styles to be in borders of sustainability. This can help in the applicability of best ethical practices and ethical terms in the organization by the leaders of the company.

At last, a conclusion is made that leadership plays an important role in every company. Toyota motors also changed their leadership styles according to the ethics, sustainability and trust of the customers and the employees who are working with the Toyota motors. They have realized the value of effective leaders. This can be visible by application of effective styles of leadership, managerial styles, and management of the quality control and labor, etc. which is effectively described in this report. It is also observed that the process of effective decision making by the leaders in Toyota Motors Corporation Australia was lacking. They must use effective theories and leadership styles, etc. The leadership style of Toyota Motors Corporation Australia was not a combination of decision making and ethical behavior and also do not prioritized the ethics whether it is a big or small organization. It is very important to have a cause and effect relationship between the leaders and the employees that ultimately helps in the success of the organization.

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