Toyota's Operational Efficiency and Management Strategies

The assignment analyzes Toyota's business operations and how they contribute to the company's success and growth. It explores different leadership and management approaches used by Toyota, including decision theory approach, scientific management theory, and transformational leadership theory. The report also discusses the importance of operational efficiency in enhancing effectiveness and effectiveness of business operations.

MANAGEMENT AND
OPERATIONS

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Definition and roles, difference between and characteristics of both managers and leaders 4
P2. Different roles of management and leadership in application to different organisational
situations, supported by theories and concepts.......................................................................6
P3. Strengths and Weaknesses of different approaches to leadership and management........7
TASK2 ............................................................................................................................................8
P4 Key Operational Approaches to Operation Management and their Values for Toyota. .10
P5 Importance and value of operations management in achieving Business objectives of an
organisation .........................................................................................................................11
P6 Evaluation of Impact of External Business Environment Factors on Toyota.................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Operations management is the administration of entire business practices to develop the
highest level of efficiency and effectiveness. It is related with converting materials into goods
and services. In this report, Toyota is a given organisation which was founded by Kiichiro in
1933. The first production of Toyota was Type A engine and first passenger car was Toyota AA.
It is a Japanese manufacturer company. This report covers different tasks which includes,
different characteristic and responsibility of leader and manager to deal all business situation
effectively. At last, impact of external factors and values of operation management is also cover
in this project.
TASK 1
Introduction to the organisation you have chosen and its management structure
Toyota is a company of automotive sector which includes designing, manufacturing,
development, marketing and selling of motor cars. (Burns, 2014). Toyota are selling near around
10 million vehicles every every and have more than 350,000 workers working for them at current
position. Company holds its business worldwide in 28 countries for manufacturing process and it
sells its vehicles in more than 150 countries. At present every company uses organisational
structure and even Toyota does the same for achieving goals. The different management
structure that Toyota uses are listed below:

Illustration 1: Organisational structure of Toyota
(Source: Organisational structure of Toyota, 2018)
 Global Hierarchy: Although company have shown the significant growth in recent time
but still the uses the centralise business system where the regional head and business unit
head will report to companies global headquarter in Japan.
 Geographic division: At present, Toyota have divided its structure in eight regional
divisions among Japan, Europe, North America, China, Asia and Middle East, Asia and
Oceania , Africa, and Latin America and Caribbean. (Chiarini and Vagnoni, 2015).
 Product-based division The main feature management structure is product-based
divisions where company have divided department in four categories and they are: Lexus
International, Toyota No.1 for operations in Europe, Japan and North America.
P1 Definition and roles, difference between and characteristics of both managers and leaders
Manager can be defined as a responsible person who is in-charge for controlling,
administering the department and staffs working under him. The main duty of managers is to
ensure compliances with health and safety legislation (De Roover, 2017).
Leader can be defined as a person who have the superior power in his field, who orders
their inferior to perform particular task.
Difference between Manager and Leader

Bases Manager Leader
Approaches The approach of managers are to plan
details.
The approach of leader is to provide
directions.
Focus Manager generally focuses on process
and procedures.
The main focus of leaders is on
workers/people that how they are
working to achieve targets.
Characteristics of a leader and a manager.
Manager
 Manager must be result oriented which shows that they wants to achieve desire
objectives.
 Manager must know about the strength and weaknesses of their staffs.
 Manager should have the ability to deal with problems.
Leader
 Leader must have strong communication skills so they can coordinate with their
subordinates.
 Leader must have the ability to delegate right duties to appropriate group or individuals. Leaders must have passion regarding their work so their subordinates can be motivated
by seeing dedication level.
Role of a leader and manager
Role of leader: Leader plays the main role in guiding their group or individual. In context
of Toyota, leader have to link the connection between management and worker and act as
motivational leader for workers so they can help to achieve desire goal in future (Grant,
Trautrims and Wong, 2017).
Role of manager: In context of Toyota, the manager have been given different roles and
responsibilities that should be followed by them where they have to set different goals for
different group or team and delegate work among different group to achieve required target.
Managers are also responsible for all planning, organising, staffing and controlling works. The
managers of Toyota plays the vital role in generating profit every year.

P2. Different roles of management and leadership in application to different organisational
situations, supported by theories and concepts.
Every company faces the problems regarding crises and other minor issues in an
organisation. In same way Toyota has also faced some different kind of issues recently and to
overcome from that situation, they followed different theories and concepts. They are:
 Stable Situation: In this company mainly focus on their policies and rules and
regulations to over come the situation (Greene and et. al., 2016). In terms of Toyota, they
are still reliable on their previous policies and rules for attaining better results. Even at
the time of recession, company wants to follow the same formulas as it helps by not
creating any dispute among their employees. The role of managers in this condition is to
come over with proper planning so that situation can be controlled. Also, leader support
their employee's by motivating them regarding their work as market condition is not
perfect but still their contributions towards company means a lot.
 Moderate Situation: In this situation, every organisation must keep themselves to handle
all situation effectively. In context of Toyota, they keep themselves updating in the field
of technologies regarding engines, motor parts etc. so that they can compete in the market
(Jacobs, Chase and Lummus, 2014). The managers of Toyota company plays the
important role in order to make sure that they are updated. Managers provide proper
training regarding new technologies that are implemented in recent time. In terms of
leaders, they deals with this situation by providing appropriate task by knowing all
strength and weaknesses of workers.
 Fast Changing Situation: At present, market is changing day by day as per the need of
customers. Company should know what their customers are willing from them. In context
of Toyota, they always loves to provide the service what their customer want from them
by launching new vehicles time to time with additional features (Kato and et. al., 2015).
The mangers of Toyota company prepare their strategy after listening to the demand of
their customers where as leaders helps their employee's by motivating to adopt new
changes which take place time to time.
There are some theories and concept to deal with above situation in context of leadership and
management.

 Classical Management theory: This theory believes that worker of company have only
needs regarding physical and economical needs. In terms of Toyota, they follows fast
changing situation and where they want their work to perform well. They believe in
productivity rather than needs of any workers.
 Trait theory of leadership: This theory is based on the qualities and traits of the leader.
It is best suitable theory for managing fast changing situation easily. Thus, it help an
organisation to enhance their productivity and efficiency level.
P3. Strengths and Weaknesses of different approaches to leadership and management.
Situational Leadership : The theory discusses about the leadership quality, where leader
need to adopt changes for acquiring goals (Littlefield and et. al, 2016). In terms of Toyota, the
leader applies this theory according to working experience of their employee's. The leader make
certain changes and take necessary step according to the situation. It is one of the theory where
leader need to take their decision as per the requirement of situation which arises in front of
them.
Strength Weaknesses
In helps to motivate employee's as it involves
decision-making process.
As this approach is for short duration, worker
needs to work according to the current
situation.
This theory mainly focus on creating
awareness among employee's.
Due to rapid changes this theory can create
problem by creating confusion among
individual/team.
Contingency leadership: This theory or approach is emphasizes the significance of both
leader's personality and the condition in which that leader operates. In the Toyota, it is mainly
observed there are two kinds of leaders. One is task oriented and second one is supportive leader
in nature. Therefore, leader help an organisation to deal with above all three situation and attain
better results in given time period. It is one of those theory which helps to preplan the leader that
how they need to perform on those situation where are performing their business activities by
going out of their comfort zone.
Strength Weaknesses
It does not need that people or employee be This theory is more difficult for the business

effective in entire situation. leader while selecting most suitable
contingency plan or approach.
It gives an effective way to assess leader style
that could be essential and useful to Toyota.
Constant variations to environment or structure
of the organisation is challenging for
management (Martínez-Jurado and Moyano-
Fuentes, 2014).
System Leadership: This is another theory that enables the leaders in an enterprise to
develop the situations where employees at the entire level can work productively to their
potentials (Mahadevan, 2015). This is a type of leadership theory that help Toyota leader to
overcome all issue arise in above situation in more essential and effective manner. This theory
help the organisation to being creativity and innovation within the company through which they
are able to take advantage in the competitive market.
Strength Weaknesses
This theory clarifies the thought on the
dynamism and complexity of the environment
and gives an effective framework for building
ideas.
The process is complicated and lengthy in
nature as it occupy different inter-related
parameters in it.
All the above mentioned leaderships are helpful for the company but to earn maximum
amount of profit by satisfying the customer Toyota try to follow situational theory. Because
theire main is to work as per the situation and demand which arises in front of them.
Conclusions on how managers and leaders have made an impact on the organisation
Hence, it can be concluded in the lights of above theory and approaches that roles and
duties of manager and leader are always different while operating the changes with in a
company. The decision-making ability changes according to the requirement of an organisation.
Strength and weaknesses are there if any members misguides the relevant information (Nielsen
and et. al, 2014). If Leader and Manager works together by proper coordination then they can
obtain appropriate result in future which might reflect positive impact in an organisation. Also,
it will help employee's for motivating themselves which will direct them to work for achieving
goals.

TASK2
Introduction to Key Operations of Toyota
Key Operations refers to main activities which a company carries out in order to
complete the system of revenue earning. In other words, operations refers to the activities carried
out by a company is order to produce high quality goods for the use of customers. Toyota is an
example of successful business operations as a global level. The key operations of Toyota
includes the design of goods and services, control and distribution system, quality management,
inventory management, layout design strategy. All these activities are included in the key
operations of Toyota.
Definition of all Operations and the Roles and Responsibilities of Managers towards these
Functions
The description of Operations of Toyota and the roles and responsibilities of Managers
are discussed as under:
Designing Goods and Services:
This operation deals in designing the goods and services of Toyota. It also adds new
features if any to the existing products of the company. This function is carried over by R&D
Department of the company (Schönsleben, 2016). The Roles and Responsibilities of Managers
of Toyota are mentioned below:
 Ensuring that the technical resources are managed effectively by working with the other
departments to co-ordinate the design resource.
 Ensuring that design team adopt and make effective use of the products provided. Mentor and develop the design team so that better results can be acquired from their
work.
Control and Distribution System:
This operation is very important factor in the operations of Toyota Company as this
factor is responsible for controlling the production process and ensuring proper distribution of
products in order to fulfil the demand of market as a whole (Smith, Maull and CL Ng, 2014).
The Roles and Responsibilities of managers are r:
 Ensuring proper and equal distribution of goods of the company.
 Checking whether right products are delivered at right place and at right time. Planning and managing the movement of goods in the supply chain.

Quality Management:
In this operation, it is ensured that all the activities and tasks related to maintaining and
providing good quality of goods and services to customers are done properly. The Roles and
Responsibilities of the Manager are discussed as under:
 Overseeing the entire process documentation of goods, when they are made quality
approved.
 Providing training to employees from time to time so that they may not make any
mistakes.
 Implementing quality programs in the organisation so that the impact can be realised on
other departments and further changes if any needed can be made (Song and Parola,
2015).
P4 Key Operational Approaches to Operation Management and their Values for Toyota
The key approaches to operation management for Toyota which can help in enhancing
their operation process are discussed below:
Total Quality Management:
This approach focuses on the continuously improvement in the quality of goods and
services provided by Toyota and the improvement will be made by taking feedback from the
customers. It will also make the product as per the needs of the customers (Burns, 2014). The
value of this approach for Toyota is defined as under:
Customer Satisfaction:
The goal of the company is to improve the quality of goods and services which can be
achieved through this approach. This improvement will led to the satisfaction level of customers
which they got from the use of good produced by Toyota.
Process Control:
This process will help in controlling the processes of the company such as the production
process, and this control will directly contribute towards the improvement of the quality of good
and services Toyota is providing (Chiarini and Vagnoni, 2015).
Systematic Approach:
By applying this approach, the knowledge of all the activities and their proper
functioning can be acquired. It ensures that all the functions are done in a systematic way which
reduces the chances of omission.

Six Sigma:
It is a process which makes use of some statistical tools and techniques which are focused
on removing the defects and process variability (De Roover, 2017). The process of Six Sigma
includes measurement, improvement and validation activities. The value that it provides to
Toyota is described as under:
Saves Time:
The use of this approach will reduce the process cycling time of Toyota so it will be able
to produce more goods in less time.
Reduction of Defects:
The defects which earlier were occurring are now reduced with the use of this approach.
It is so because now the employees will be able to identify the areas of defect and the effect it is
causing on the production. So these can be easily identified and eliminated.
Reduction of Variation and Waste:
When the employees are able to identify the areas of improvement than it can also be
used for eliminating the waste which are not at all useful to produce for the use of customers.
The elimination of these areas will also help in reduction of costs to Toyota (Grant, Trautrims
and Wong, 2017).
In this way, it is necessary to apply this approach to Toyota.
P5 Importance and value of operations management in achieving Business objectives of an
organisation
Control and distribution: In this, it is necessary management of Toyota need to review
each and every activity on regular basis because that will help to increase the satisfaction level
among the customer of Toyota. Proper controlling and distribution will help them to enhance the
profit of a company.
Transformation of raw materials into finished good to customers: It is important for
any of the organisation that how they perform there operation activities so that overall profit can
be increased. In context of Toyota, they are of those company which take their work seriously so
for that they are always dedicated that how they can utilise their resources so that they can satisfy
their customer.
Process and capacity management: It is the process of management where role of
leader and manger can be found where they are required to evaluate the outcome of the

company. In context of Toyota, their manger and leaders tries to collect the overall revenue of
the company just for the purpose of competing in the market place for the purpose of achieving
their targets.
P6 Evaluation of Impact of External Business Environment Factors on Toyota
The impact of external environment on the working of Toyota can be described by
making use of PEST Analysis. This Analysis is done in order to understand the impact of
external factors on the working of a company which is mentioned below:

Illustration 2: PEST analysis of Toyota
(Source: PEST analysis of Toyota, 2019)
Political Factors:
These are the factors which creates effect on the working of Toyota due to change in the
policies of the government. It has created a bad effect on the working of Toyota in Australia in
2014. The argument was related to the passing of a commission which targets the big businesses
in the country. Due to this, Toyota has decided to cease their business in Australia in 2017.
Economical Factors:
These are the factors in which factors such as inflation rate, currency exchange rate are
included. It can also be both beneficial and detrimental for Toyota. For example, the fall in
Japanese currency will led boost their revenues against both U.S. Dollars and Euros.
Social Factors:
The including in these factors are the society covering Toyota, demographics, culture,
attitudes, etc. The effect of use of vehicles to the environment is a big deal on which the auto
mobile manufacturing industries are working (Hitt, Xu and Carnes, 2016). Toyota is also
working upon this concern by focusing more on electric and hybrid cars.
Technological Factors:
These factors includes changes in the technology of a company which impacts upon its
working. In Toyota's case, the factors affecting are the rising use e-commerce, use of mobile
technology. The company is also having an opportunity to improve its capabilities and some of
its products, such as the spare parts.

Approaches to Leadership and Management to Improve Operational Efficiencies
Toyota can make use of Decision Theory Approach in order to improve its operational
efficiencies.
The description of this approach is discussed as under:
Scientific Management Theory:
This theory deals with the work that should be simplified in best manner to maximise the
productivity. In context of Toyota, the managers identify the situation in order to perform task
easily for employee's. If necessary then manager also take the necessary help of their employee's.
The approach to leadership which Toyota can use for improving their operational efficiency is
explained under:
Transformational Theory Of Leadership: This theory deals with leadership approach
which help an organisation to identify requirement of each employees . In context of Toyota,
they follows moderate technology where they help their worker to achieve required goals by
providing appropriate guidance for transformation. Thus, it is essential and useful leadership
theory which will help Toyota to enhance their operational efficiency in more significant
manner.
Conclusion and Recommendation for future improvements
According to the above given information it has been concluded that management of
business operations is important for the success and growth of an organisation. For achievement
of this, different number of management and leadership approaches used by the manager and
leader of the company (Hitt, Xu and Carnes, 2016). Along with this, managers and leaders of an
enterprise should apply a variety of approaches and principles to enhance efficiency and
effectiveness of the operations management.

CONCLUSION
From the above given report, it has been summarised, operation management is more
signifiant part for the growth of company. In order to increase efficiency level of business
operations, different number of leadership and management style is used by the company. Along
with this, different approaches to operational management is also used which will help an
organisation to improve effectiveness and efficiency in their operations.

REFERENCES
Books and Journals
Online
Toyota PEST Analysis. 2019. [Online]. Available
through:<https://research-methodology.net/toyota-pestel-analysis/>.