Toyota Motor Corporation Essay Example
With 348,877 employees as of March 2016, Toyota Motor Company is a Japanese multinational which manufactures automotive with its headquarters in Toyota (Japan) (Stoller, 2017). It is said to be the largest automotive manufacturer in the world with 540 consolidated subsidiaries and 226 affiliates which are owned by several shareholders (18th August 2017) largely comprised of financial institutions (31.61%) and individuals (21.37%) as according to Toyota Global (2017). This large number of subsidiaries has enable direct contact between producers and customers.
Nkomo, (2014) Toyota Company was founded in 1937 to engage in assembly, design, manufacture and sale of cars, commercial vehicles and related parts and accessories for Japan, North America, Asia and Europe markets. It competes in the automobile industry which is at its maturity stage mostly characterized by product differentiation and innovation with other large multinationals including General Motors, Ford, Volkswagen and Isuzu. Just in time and lean manufacturing are its management philosophies and its business methods and managerial values are commonly known as Toyota Way which outlays guidelines and values which employees are required to embrace.
Toyota Motor Corporation Australia, whose trading name is Toyota Australia was started in 1958 as a subsidiary of Toyota Motor Corporation. It has its headquarters at Port Melbourne, Victoria (Australia). It has a vehicle manufacturing plant at Altona where vehicle models of Camry, Camry Hybrid and Aurion are produced for both domestic and export markets. Other Toyota Australia offices are located at Adelaide, Queensland, Darwin, Sydney and Perth. As stated in Toyota Key Facts (2014), approximately 3,837 employees are employed by Toyota Australia. It controls a large market share in the Australian market where it serves passenger and commercial market segments.
Toyota’s core products and services as according to Sosnovskikh (2016, p448) include personal mobility vehicles which comprise of new types of vehicles of new technologies, auto manufacturing where the company has developed safe and comfortable vehicles, environmental technologies where through the company’s guiding principle of respect for the environment the firm is addressing into the problem of pollution by using recycling technologies and new types of fuels which emit less pollutants, robot technologies and Toyota Financial Services. Toyota engine products of petrol, gasoline and diesel are grouped into flat-twin, staright-3, straight-4, straight-6, V6, V8, V10 and V12.There are five brands of vehicles produced by Toyota Motor Corporation which include Toyota, Lexus, Daihatsu, Hino and Ranz with approximately 70 different models under the Toyota brand some of which include Century, Land Cruiser, Sienta, Hilux, Avensis ,Porte, Caldina, Succeed, Crown, Premio, Mark X, Alphard and Vangurd . It’s SUV and crossover business is represented by products like RAV4, Land Cruiser, Fortuner and Prado including others. It is also engaged in the trucks and buses market where products like Toyota Hilux and Toyota Coaster minibus are found. It has also engaged in production and sale of hybrid electric vehicles since the introduction of Toyota Prius in 1997 a product which has achieved 10% efficiency improvement (German, 2015 p1). This technology which has been extended to its other products including Camry and Lexus. German (2015 p2) states that in 1997 Toyota Company introduced the first modern fashion of Prius hybrid vehicle model and which was latter introduced to the United States market in 2000. Toyota has evolved to dominate the hybrid model market in U.S in terms of sales standing at 66% in 2014 with Ford coming in second at 14%.
Foundations of Business (n.d p328) states that Toyota’s multi-branding approach has helped it cover a wide range of customers. The Toyota Prius which is a hybrid gas-electric car uses a computer software designed to enable it park automatically. It is also involved in financial services sector where Toyota Financial services with operations in more than 30 countries provides financial services for purchases, insurance and leasing of vehicles.
Toyota Global Newsroom (2017), Toyota is managed by a group of skilled and passionate executives who include Takeshi Uchiyamada as the chairman of Board of Directors who is deputized by Shigeru Hayakawa as the vice chairman of the board. The president of the board is known as Akio Toyoda. The board has a team of other members including the audit and supervisory board members and operating officers who are headed by Akio Toyoda as their president under who there are other executive vice presidents, senior managing officers and managing officers. Its Australian subsidiary is chaired by Max Yasuda and Dave Buttner as president.
As stated in Hierarchy Structure (2017), this multinational with its operations spread across the world its organization structure basically involves global management team, geographic/regional managers and product based managers. Its global management team makes the final decisions on all issues. Its 8 geographic divisions are headed by regional managers who report to the global managers at the headquarters. The product-based divisions are headed by product-based managers who are mostly concerned with development of product lines and brands.
Toyota Motor Corporation (2012) Toyota’s culture is commonly known as Toyota Way. Toyota values and business methods are elaborated in Toyota way which gives guidelines for the company’s global activities. These values have enabled the company grow rapidly through diversification and globalization. The values based on the pillars of respect for people and continuous improvement are evaluated and reviewed regularly to reflect the ever changing environment. Toyota Motor Corporation (2012) adds that Toyota Institute which was established in 2002 as an internal human resources development organization helps in promoting the Toyota Way. Toyota global mission of continuously making ever-better cars is enhanced by its global vision which touches on enriching lives of people and being at the forefront by leading the way to the future mobility through its commitment to quality, respect and innovation aimed at exceeding customers’ expectations by meeting its challenging going as they continue engaging their people who have talent and passion for the industry. Sosnovskikh (2016, p448), states that Toyota values and guidelines are based on five principles of kaizen (continuous improvement), teamwork, respect, Genchi genbitsu (go and see) and challenge. Genchi genbitsu revolves around assessing ways of making right decisions and achieving personal best to achieve the company’s targets. The corporate activities which aim at contributing to social and economic development are guided by the principle of respect for the culture and customs of the nations they operate in. Its long-term prospects are achieved through partnership in research and manufacturing which helps in enhancing mutual benefits. This corporate culture facilitates individual creativity and teamwork based on mutual trust and respect.
Toyota Employees Benefits and Attributes
Toyota employee’s benefits as stated by Toyota Motor Manufacturing Canada Inc., (2017) range from competitive pay, incentives to pension plan. External salary surveys are carried out annually to see to it that employees are fairly rewarded. Bonuses on company and individual achievements are also awarded which help in implementing the kaizen principle. A discount is also offered to the employees and their immediate families for purchase of Lexus and Toyota vehicles. Maternity and parental leave is also offered to its employees even for adoptive parents. Toyota benefits program also comprise of health care benefits where permanent employees are enrolled. This health care benefit covers life insurance, critical illness, long-term disability, dental, medical and accidental death and dismemberment where employees are supposed to choose the level of coverage.
The employees also benefit from 19 days paid time off for permanent employees excluding statutory holidays and floating holidays. Toyota boasts of a stable work environment with employees also benefiting from pension and retirement under its competitive defined contribution pension plan where employees make contributions according to their needs. On-the-job training which includes skills training, skilled trade programs, in-house apprenticeship and online training programs are also provided to its employees. Toyota also offers incentives for professional development and membership as well as educational opportunities outside work. Special tools, safety tools and glasses are also provided for employees in those positions which require protective equipment. All these benefits which vary according to location are designed to give the employees the motivation needed so as to be and keep in line with its corporate strategy and tactics.
Employee experience, capabilities and competencies are seen as their major motivations to innovate. Toyota provided a conducive environment for employees to exercise their abilities and strengths in thinking and creativity through its respect for people principle. This environment which is facilitated by the inspiration of management is created to provide for openness in thinking for the continuous improvement in production for its kaizen principle. To achieve this kind of competency the employees are put under continuous learning programs which has enabled Toyota to become a learning organization. To be able to show respect to the people and processes of Toyota the employees are expected to observe humility in their work.
Toyota’s Company Performance
As stated in Toyota Global (2017) and as shown in Table 1 below, the financial results for the year which ended in March 2016 the operating income for Toyota Motor Corporation globally increases by 103.4 billion Japanese yen to 2.8539 trillion yen attributed to reduction in costs. This is an equivalent of AUD 32.97 billion (at the current rate of 1 AUD for 86.5595 Japanese yen on 19/8/2017). A total annual dividends of 210 yen (AUD 2.426) per share were awarded for common shareholders. This was based on total net revenues of 28.4031 trillion yen for 8, 681,328 units of sale. This amount of revenue was a 4.3% increase from the previous year. The units of sale in the financial year ending March 2016 decreased by 290,536 units in the previous year. With such amounts of revenue it stood at position 11 worldwide in terms of most profitable public companies of the world (Stoller, 2017). Toyota also happens to be the largest company in Japan in terms of market capitalization.
Table 1: Toyota Company Financial Performance Consolidated
|Fiscal Year||Financial Indicator|
|Operating income return on revenues||Pretax return on revenues||Pretax return on capital||Return on assets (R.O.A.)||Return on equity (R.O.E.)||Shareholders’ equity ratio|
Source: Toyota Global <http://www.toyota-global.com/investors/financial_data/financial_data.html>
In conclusion Toyota Way which is a reflection of Japanese culture has helped in developing the company strategically around the globe where it has contributed in providing low cost quality products by use of qualified human resources and technological innovations. The strategy of penetrating international markets and cutting costs while still maintain the quality of its products has also enabled the company achieve success. Toyota’s continued investment in its corporate pillars of respect and continuous improvement together with investing in the right human resources and placing them in the right place has seen the company grown tremendously, helping it compete with the other global giants. Investments in research with the right partners and spread of its operations has also helped the firm directly reach its customers.
Foundations of Business, First Edition n.d. p328. Faculty of Business, Government & Law, University of Canberra http:www.canberra.edu.au 1
German B. 2015. Hybrid Vehicles, Technology development and cost reduction: Technical Brief No. 1, International Council on Clean Transport, Available from; <http://www.theicct.org/sites/default/files/publications/ICCT_TechBriefNo1_Hybrids_July2015.pdf > (19/8/2017)
Hierarchy Structure, 2017. Toyota Company Hierarchy Structure. http://www.hierarchystructure.com/toyota-com accessed 18/8/2017.
Nkomo T., 2014. Analysis of Toyota Motor Corporation, Available from; <https://scholar.harvard.edu/files/tnkomo/files/analysis_of_toyota.pdf>
Sosnovskikh S., 2016. Toyota Motor: Corporation Organizational Culture, University of Greenwich.
Stoller, K., 2017. Forbes; The World’s Biggest Public Companies; Available from; <https://www.forbes.com/companies/toyota-motor/> (18/8/2017).
Toyota Global, 2017. Financial Results, [online];<http://www.toyota-global.com/pages/contents/investors/financial_result/2016/pdf/q4/speech.pdf > (18/8/2017)
Toyota Global Newsroom, 2017. Toyota Corporate Executives. Available from; http://newsroom.toyota.co.jp/en/detail/1481087/ accessed 18/8/2017
Toyota Key Facts, 2014. Toyota the Company. Available from <http://www.toyota.com.au/toyota/company/key-facts> (19/8/2017)
Toyota Motor Corporation, 2012. 75 Years of Toyota. Toyota Way 2001 [online] http://www.toyota-global.com/company/history_of_toyota/75years/data/conditions/philosophy/toyotaway2001.html accessed 19/8/2017
Toyota Motor Manufacturing Canada Inc. 2017. The Benefits. Available from; <http://www.tmmc.ca/en/careers/benefits > (18/8/2017)
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