Global Automotive Industry and Corporate Entrepreneurship

The assignment discusses the global automotive industry's innovation economics, focusing on the race for global advantage. It references various studies on CEOs' transformational leadership, corporate entrepreneurship, and technology orientation in the industry. The assignment also touches on product safety and security in the global supply chain and co-opetition in Japanese supplier-networks.

Assessing Corporate Entrepreneurial
Health of Toyota Motor Corporation
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Executive Summary
Corporate entrepreneurship has been seen to be a process that allows companies to innovate and
extend their core competencies. Globalization and advent of technology has created a platform
where companies across various countries compete across global platforms. In order to establish
competitive advantage over a certain area of operations, corporations need to extend their
knowledge that can function as core competencies for them. Innovating changes through
products or processes allows corporations to maintain edge over business operations.
Committing and diverting possible resources towards innovative endeavors allows a corporation
to expand their innovative strategies as is regarded as corporate entrepreneurship. However,
corporate entrepreneurship is not as easy as it might appear to be as it encompassing adopting a
suitable culture and organizational climate matched to it. Moreover leaders within organizations
have to engage their employees in such endeavors so that they are able to innovate effectively.
The scope of current discussion is focused on evaluating corporate entrepreneurship endeavors
for Toyota Motor Corporations. The organization’s data has been collected through external and
internal sources and then data has been analysed effectively. Analysis of several published data
for the corporation reveals that it includes high intensity of corporate entrepreneurship which is
visible through the multiple products and processes that they have innovated as self-driving
automobiles, robots and so on. The leadership within the Company is committed to their vision
and mission statement which is to innovate continuously to make living comfortable.
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Table of Contents
Executive Summary.........................................................................................................................2
1.0 Introduction and Company Overview..................................................................................4
2.0 Theoretical Concepts............................................................................................................5
3.0 Research Approach...............................................................................................................6
3.1 Self –Reporting.................................................................................................................6
3.2 External Commentary.......................................................................................................7
4.0 Data Analysis and Discussion...................................................................................................8
Part A: Assessment of entrepreneurial intensity..........................................................................8
Part B: Assessment the Corporate Entrepreneurship Climate (CEC)..........................................9
5.0 Conclusion...............................................................................................................................10
6.0 Reference Lists........................................................................................................................12
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1.0 Introduction and Company Overview
Globalization and advent of technology has allowed knowledge becoming the most important
source of competitive advantage for a company (Goodale et al, 2011). Knowledge has capability
to render competitive advantage to a firm and provide future sustainability of businesses.
Multinationals are adapting processes that allow knowledge processing activity to be developed
and shared across the Company platforms. Companies globally are now focusing on
development of innovative products and processes or administrative structures that can provide
effectiveness and efficiency to the corporation. Incorporating in corporate entrepreneurship
requires development of strategies in order to support the same. Organizations that allow
employees to innovate set up a climate of corporate entrepreneurship, who in turn nurture
tomorrow’s competitive advantages (Atkinson & Ezell, 2012). The scope of analysis here
concerns Toyota Motor Corporations Entrepreneurial Health assessment to understand ways that
the Company adopts in order to integrate innovations.
Toyota Motor Corporation is a Japanese multinational corporation with its headquarters based in
Aichi, Japan. The automotive Company founded by Kiiichiro Toyoda currently operates
worldwide and has over 3.5 lac employees. The Company is considered largest automotive
manufacturing company in the world and fifth largest in terms of revenue. Takeshi Uchiyamada
is the current Chairman of the Company and Shigeru Hayakawa the Vice Chairman. Akio
Ttoyoda is the President of the Company. The Company manufactures luxury vehicles,
commercial vehicles, automobiles and engines and caters to global markets (Gómez-Haro,
Aragón-Correa & Cordón-Pozo, 2011). The Company is focused on innovation and since its
existence has innovated several processes and products for enhancing quality and efficiency of
its products in the market. The company has research labs on Bio-Technologies and Robotic
wings that are connected with inventing robots. The underlying vision and philosophy of the
Company lays focus on innovation for its growth in the entire world for product efficiency and
quality. The Company has invented kaizen principles for continuous improvement of its
production processes (Kuratko, 2010). The current scope of analysis here evaluates Toyota’s
innovative spirits that the company integrates in order to establish core competency in the
market.
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2.0 Theoretical Concepts
Corporate entrepreneurship strategy (CES) is a vision that an organization adopts by completely
re-orienting and re-organizing operations to explore entrepreneurial opportunities that are
focused on innovations. Employees are motivated to innovate in their jobs in order to make CES.
CE has capability to improve organizational performance and organizations need to provide
supportive structure for developing an internal environment that can cultivate employee’s
commitment (Kuratko, Hornsby & Hayton, 2015). CE allows extension of a firm’s capability of
its core competencies and competitive advantages by taking entrepreneurial opportunities. CE
allows a firms business to create newer products and processes, which in turn allows market
developments by strategic renewal of operations that were existing. CE is initiated by certain
triggers that arise from the organization’s internal work environment and external environment.
Internal work environment contributes significantly to the development of a climate that in turn
triggers innovative ambience.
Managers can create a corporate climate that is conducive for employees to innovate within their
job roles (Marucheck, Greis, Mena & Cai, 2011). Managers have capability to select from
employees, similar to venture capitalists and then allocate resources to the employee such that he
can innovate in an effective manner. This entrepreneurial friendly ambience and atmosphere can
contain human resource management systems, controls, structures amongst other factors that can
provide climate for innovations to take place. Moreover, an organizational culture provides
social energy that is able to drive a corporation to adopt various procedures and processes to
create new products and processes. The basis for entrepreneurial culture is to focus on
empowering people allowing transfer of knowledge to take place, such that it can act in the best
interests of the organization by enhancing its effectiveness. Organizations that are capable of
developing an entrepreneurial mindset can successfully create entrepreneurship strategies by
considering opportunities that might arise in external environment. When an organization
decides to extend their entrepreneurial mind set then they generally undertake activities that can
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sense opportunities in external environment and then develop organizations capability to
mobilize knowledge as well as resources to exploit them. Combining entrepreneurial behaviours
along with strategic actions can allow development of successful corporate entrepreneurship
strategy. The theoretical structure provided here has allowed explanation of the concept of
corporate entrepreneurship and to analyse them in corporations that are using it.
3.0 Research Approach
Theoretical literatures have provided valuable background for the study of corporate
entrepreneurship climate within Toyota Motor Corporation. There have been multiple literatures
and internet sources available that have provided necessary inputs regarding entrepreneurial
activities that take place within the corporation (Chen et al, 2014). In order to analyse in-detail
various entrepreneurial activity that takes place within the corporation there are two approaches
selected as given below.
3.1Self –Reporting
Toyota Motor Corporation’s annual reports incorporate the various innovative endeavors that it
does for a particular year. The annual report includes the vision and mission statement of the
corporation along with its corporate social responsibility endeavors. The annual reports include
a detailed analysis of all innovations that take place within the Company (Dunlap‐Hinkler,
Kotabe & Mudambi, 2010). The Company apart from manufacturing of automobiles caters to
various other service range as financial services, builds robots and conducts research in
Biotechnology. Its annual reports encompass various innovations that are undertaken by the
company and developments done in each and every research. Automobile division of the
Company is engaged with designing and manufacturing of cars, mini cars, trucks and currently
self-driving cars along with their accessories.
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Automobiles manufactured by Toyota Motor Corporation speak volumes regarding their quality
and efficiency (Engel, 2015). They are forerunners in designing of 2 conventional types of
engine vehicles and hybrid vehicles. Their product lines include compact and sub-compact cars,
mini vehicles, luxury, sports, sport-utility vehicles and busses. It had launched world’s first
hybrid cars called the Prius in 1997. The innovation laid the blueprint for modern manufacturing
by means of Toyota Production System. It has developed a safety technology called the Pre-
collision System that comes with Steer Assist and Automated Highway Driving Assist. The
Automated Highway Driving Assist (AHDA) innovation ensures safer motorway driving. Other
innovations as Co-operative adaptive Cruise Control and Lane Trace Control allows better and
more enhanced driving experience (Morris, Kuratko & Covin, 2010). Its landmark innovations
were in devising of wireless charging systems for electric vehicles (EVs) and plug-in hybrid
vehicles (PHEVs). The charging technology allows charging automobiles easily. Toyota i-road
electric vehicles are a three wheeled personal mobility vehicles which was showcased in the
2013 Geneva Motor Show. Another major innovation of Toyota was the Toyota Winglet
launched in the year 2008 that could have speed of 3.5 mph.
Toyota’s Partner robot Program has been categorised into four parts as Mobility Support, Life
Support, Medical and Welfare Support and Work Support, is a part of Human Support Robot
(HSR). Its Walk Training Assist and Balance Training Assist robots provide rehabilitation to
injured patients in hospitals (Turró, Urbano & Peris-Ortiz, 2014). Kirobo is a robot designed for
space companionship. Thus, there are a number of innovative endeavors that Toyota Motor
Corporation has developed reported in its annual statements and corporate social responsibility
publications made.
3.2External Commentary
External sources were evaluated using feedback from employees in glassdoor.com, magazine
review, journal reviews and all other reviews available on the internet. All possible feedback
available for the Company was taken into consideration and then compiled to arrive at this
section for the study. It was revealed that employees of the Company are provided resources and
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initiative in order to undertake innovative procedures and processes (El-Refaie, 2013). Along
with the innovation and research and development team, employees throughout the company are
provided ownership of their job roles such that they are able to easily innovate. The corporate
culture that could be understood from collecting varied data relative to the company revealed that
there is a spirit of innovation within the cultural climate. Managers form senior levels till the
juniors are given ample freedom to brainstorm ideas and discuss them in corporate meetings and
other conventions (Gómez-Haro, Aragón-Correa, & Cordón-Pozo, 2011). A feedback system is
also developed and included within the company that allows generating dynamic feedback from
its most integral stakeholder which is employees in order to initiate the process of change
through innovation. Thus, collecting feedback from the company’s internal stakeholders and
other external sources reveal a corporate entrepreneurial spirit within the organization.
4.0 Data Analysis and Discussion
Analysis of collected data is integral in order to assess corporate entrepreneurial spirit that is
present within any organization. As for Toyota Motor Corporation, there have been large
amounts of data and information collected that reveals prevailing ambience of corporate
entrepreneurship within the organization. However, an in-depth analysis of structure of the
organisation can provide valuable data.
Part A: Assessment of entrepreneurial intensity
Every aspect of analysis of data for Toyota Motor Corporation reveals extensive innovative spirit
within the organization. The Corporation practices kaizen along with Toyota Production Systems
that provides opportunity for continuous development in its processes. Such development of
processes at each and every step will allow incorporation of various methods that are used to
resolve problems (Zhang et al, 2010). Toyota’s Resource Utilization Subcommittee has decided
on reducing impact of Toyota Industries on the environment by better utilization of its resources.
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The two commitments provide ways which can help evaluate entrepreneurial intensity within the
corporation. This proves commitment to entrepreneurial intensity by the organization. The
leader’s commitment to motivate each and every employee within the organization further allows
application of corporate entrepreneurship to take place.
Part B: Assessment the Corporate Entrepreneurship
Climate (CEC)
Evaluating of data and information related to Toyota Motor Corporation allows assessing the
Corporate Entrepreneurial Climate present within the organization. Organizational climate that
fosters the spirit of innovations to take place includes four vital components to be present within
the corporation as structure, culture, controls and human resource management. an organization
hence need to realign its activities and structure according to provided framework to support
corporate entrepreneurship to take place (Murata, 2012). Toyota’s CE strategy is designing to
recognised strategic triggers such that more innovative efforts can be initiated from the
company’s end. Amongst four most integral parameters, structure of the Company has to be
designed in a manner that allows innovation, meaning horizontal structure is preferred compared
to vertical structure. In horizontal structure, leaders and managers are able to interact with
employees in a greater number of ways to allow encouragement of innovative efforts to take
place. Toyota has horizontal structure with presence of few layers that allows ease of interaction
between employees and managers as well as leaders. Managers easily share their ideas and
innovative areas on which employees can work to resolve problems. Employees on the other
hand faces ease of accessing higher levels of managers and leaders to discuss potential issues
they are facing and problem resolving techniques they are thinking about. This makes easier for
leaders to visualize talents within a pool of employees as well. Broader span of control and
decentralization within the corporation allows greater amounts of innovative endeavors to take
place (Wilhelm & Kohlbacher, 2011). Presence of open communication flow further allows more
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interaction regarding problem solving techniques to take place. It reduces an employee feeling of
smallness in the vast organization and greater amount of employee engagement to take place.
Controls over organizational resources or authority are relatively loose-ended at Toyota that
allows empowerment of employees. Employees work within teams with mutual trusts and
benefits shared amongst them. Open sharing of information amongst employees from varied
teams allows greater brainstorming of ideas and better problem resolution to take place.
Moreover at Toyota Motors jobs are defined I n a broad scope with presence of job socialization.
There is a reward system that recognizes and rewards employees in their appraisal for any
contribution to process or product innovativeness. An entrepreneurial learning culture with well
balancing of individual and collective emphasis makes it easier to accommodate strategy of CE
(Ries, 2011). Toyota’s vision and mission statement is clearly focused on the future and aims at
devising processes or products that can resolve human challenges or assist them towards better
future sustain ability. Moreover, entire team and focus of the corporation is to strive towards
excellence. The motto and spirit at Toyota is to devise products that are better, high in quality,
more effective and efficient. Customer driven focus allows the corporation to create innovation
through continuous contribution of their employees leading to celebration of innovation. All
relevant data sources and materials that has been evaluated for Toyota, reveals presence of
entrepreneurial mindset within the corporation. This is the only reason that has allowed the
Company to be innovative in the market with its leading branded products. the corporation has
been able to effectively set trends in the market with the several processes that it makes use of in
Toyota Production Systems. Its unmatched quality makes it a leader in the automobile market
and only a few competitors are able to match up to qualities that are being offered by the
Company.
5.0 Conclusion
Toyota Motor Corporation’s evaluation of corporate entrepreneurial spirit reveals that it is one of
the most innovative companies in the world. Its corporate innovative spirit and Production
systems have been adopted by various automobile manufacturing companies. Toyota is able to
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constantly integrate customer reviews and feedback into their production systems dynamically
resulting in highest possible quality in their products. In this manner they are able to cater to
exactly whatever customer demands are and then deliver them accordingly. The Company has a
well-established value chain that helps maintain positive relationships with its suppliers and
distributors. It employs positive relationship with their employees as well with various
engagement processes. Employees mostly help the Company extend their competitive advantage
strategy through their innovative endeavors. Hence, the Company provides various succession
planning and professional developmental opportunities to their employees. Therefore, it can be
concluded that Toyota’s innovative spirits has allowed its continuous innovative strategies to be
successful making it a leading automobile manufacturer around the globe.
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6.0 Reference Lists
Atkinson, R. D., & Ezell, S. J. (2012). Innovation economics: the race for global advantage.
Yale University Press
Chen, Y., Tang, G., Jin, J., Xie, Q., & Li, J. (2014). CEOs’ transformational leadership and
product innovation performance: The roles of corporate entrepreneurship and technology
orientation. Journal of Product Innovation Management, 31(S1), 2-17.
Dunlap‐Hinkler, D., Kotabe, M., & Mudambi, R. (2010). A story of breakthrough versus
incremental innovation: Corporate entrepreneurship in the global pharmaceutical
industry. Strategic Entrepreneurship Journal, 4(2), 106-127.
El-Refaie, A. M. (2013). Motors/generators for traction/propulsion applications: A review. IEEE
Vehicular Technology Magazine, 8(1), 90-99.
Engel, J. S. (2015). Global clusters of innovation: Lessons from Silicon Valley. California
Management Review, 57(2), 36-65.
Goodale, J. C., Kuratko, D. F., Hornsby, J. S., & Covin, J. G. (2011). Operations management
and corporate entrepreneurship: The moderating effect of operations control on the
antecedents of corporate entrepreneurial activity in relation to innovation
performance. Journal of operations management, 29(1-2), 116-127.
Gómez-Haro, S., Aragón-Correa, J. A., & Cordón-Pozo, E. (2011). Differentiating the effects of
the institutional environment on corporate entrepreneurship. Management
Decision, 49(10), 1677-1693.
Kuratko, D. F. (2010). Corporate entrepreneurship: An introduction and research review.
In Handbook of entrepreneurship research (pp. 129-163). Springer, New York, NY.
Kuratko, D. F., Hornsby, J. S., & Hayton, J. (2015). Corporate entrepreneurship: the innovative
challenge for a new global economic reality. Small Business Economics, 45(2), 245-253.
Marucheck, A., Greis, N., Mena, C., & Cai, L. (2011). Product safety and security in the global
supply chain: Issues, challenges and research opportunities. Journal of Operations
Management, 29(7-8), 707-720.
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Morris, M. H., Kuratko, D. F., & Covin, J. G. (2010). Corporate entrepreneurship & innovation.
Cengage Learning.
Murata, S. (2012). Innovation by in-wheel-motor drive unit. Vehicle System Dynamics, 50(6),
807-830.
Ries, E. (2011). The lean startup: How today's entrepreneurs use continuous innovation to
create radically successful businesses. Crown Books.
Turró, A., Urbano, D., & Peris-Ortiz, M. (2014). Culture and innovation: The moderating effect
of cultural values on corporate entrepreneurship. Technological Forecasting and Social
Change, 88, 360-369.
Wilhelm, M. M., & Kohlbacher, F. (2011). Co-opetition and knowledge co-creation in Japanese
supplier-networks: The case of Toyota. Asian Business & Management, 10(1), 66-86.
Zhang, P., Ma, J., Mani, S., Richard, M., Yokoishi, S., Glomski, B., ... & Miller, J. (2010). U.S.
Patent No. 7,722,991. Washington, DC: U.S. Patent and Trademark Office.
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