Risk Management at Toyota | PDF

Running head: RISK MANAGEMENT
Manage Risk
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Introduction......................................................................................................................................3
Context of the risk...........................................................................................................................3
Identification and assessing the risks...............................................................................................4
Plan for risk management treatment and current control process....................................................4
Role of the risk management plan in reducing the risk...................................................................6
Strength and weakness of the policies, procedures, and processes regarding the risk management
.........................................................................................................................................................7
Impact of external factors on risk management approach in context of Toyota.............................8
Tools, techniques to identify and measure the risks critical success factors in risk management...9
Role of the stakeholders to give shape the risk management plan................................................10
Monitoring process of risk management plan...............................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
Risk management in the workplace is crucial for the business organizations in order to
ensure safety of their workers1. However, in the automobile industry employees face risk related
to the hazardous substances during the manufacturing of car. Hence, it is important for such
organizations to implement risk management plan and to monitor it properly. Development of
the risk management plan provides safety to the employees by enhancing the awareness among
the workers in the organization. This current study deals with the reduction of accidents, illness,
and incidents associated with the workers of automobile industry like Toyota by developing a
proper risk management plan.
Context of the risk
Workers face risk regarding their health in the automobile industry. However, many
chemicals are present in the automobile industry, as a result, the workers are affected by the
chemical hazards2. As for example, in Toyota, the workers are often affected by Benzine that is
present in the automobile industry. This cause leukemia, unconsciousness, and death of the
workers. On the other hand, chemicals for auto-paint, fuel, oil, cleaner and solvent also harm the
health of the workers in the automobile industry. However, repeated exposure to such solvents
causes chemical bronchitis, which can damage the lung of the worker permanently. Based on this
context it is necessary for the management of Toyota to provide safety to the employees by
managing risks.
1 M Acharyya & C Brady, "Designing an Enterprise Risk Management Curriculum for Business Studies: Insights
From a Pilot Program", in Risk Management and Insurance Review, vol. 17, 2014, 113-136.
2 I Lončarski, "Risk Management (2016)", in Risk Management, vol. 18, 2016, 1-3.

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Identification and assessing the risks
Identification of the risk is crucial for the automobile industry, as it will enable the
authority to make preliminary protection for the employees3. Chemical hazards are the main risk
of the automobile industry that should be identified by the risk management team through
conducting a survey over the harmful chemicals that are present in this organization. In the
context of Toyota chemical bronchitis often occurs with the worker or mechanic. The reason is
identified of such disease and it has been found that isocyanate and solvents are the main causes
of such disease. Apart from benzene is another chemical that exhibits from the automobile
industry and causes leukemia of the workers. On the other hand, injury occurs with the workers
in Toyota while manufacturing the cars. However, by using quantitative and qualitative process
the risks are assessed and its impact is addressed4.
Plan for risk management treatment and current control process
Risk management plan includes identification of risk, analysis of the risk and
optimization of the risk and control of the risk5. Risk identification focuses on the current risks.
As for example, in context of Toyota chemical bronchitis, brain damage and leukemia are major
risks related to the health of workers. This may take 2-3weeks and workforce requires for this
action. Next, analysis of the risk focuses on the reason for the risk. In the context of Toyota
analysis of the current risks, highlight that chemicals like benzene, isocyanate and repetitive
exposure to the chemical solvents are the main factors of causing such diseases. Health
professionals are involved in this analysis and time required 1 -2 weeks. Financial resources are
3 N Sushil, R Garg & S Jain, "Continuity and change forces in Indian automobile industry: a case of tractor
company", in International Journal of Business Continuity and Risk Management, vol. 3, 2012, 99.
4 S Kumar Sharma & A Bhat, "Supply chain risk management dimensions in Indian automobile industry",
in Benchmarking: An International Journal, vol. 21, 2014, 1023-1040.
5 F Chakroun & F Abid, "Capital adequacy and risk management in the banking industry", in Applied Stochastic
Models in Business and Industry, vol. 32, 2015, 113-132.

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required at this stage. Next, the risk optimization inhibits the transfer of the risk and risk
control refers to the measurement of the effectiveness of the risk assessment plan. Management
is involved in this process and time requires for 2-4 weeks. These stages require workforce,
financial resources, and technological resources. In the case of Toyota, some current actions that
follow to optimize and control the risks are:
Type of risk Cause of
risk
Current control
method
Responsible
person
Resources Outcomes Time
Leukemia Chemical
hazards like
benzene
Use of latex
gloves to reduce
the direct
chemical contact
with the skin
Establishment of
proper
ventilation in the
working place
Risk
assessment
team
Financial
resources
and
workforce
Reduction
of the
harmful
effect of
chemicals
2 weeks
Chemical
bronchitis
Exposure of
Isocyanate
and other
solvents
Application of
disposable
gloves like nitrile
gloves during the
Risk
assessment
team
Financial
resource and
workforce
Protection
of the body
from the
chemical
substances
2-3
weeks

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painting of car.
Use of diamond
texture gloves
and protecting
cloth during the
work
during work
Injury Due to use of
defective
equipment
Application of
advanced and
safe equipment
in the
manufacturing
zone,
implementation
of the training
policy for
continuous
improvement
Risk
assessment
team
Workforce,
Financial
and
technological
resources
Decreased
level of
injury like
bleeding,
cut, burn etc
3-4
weeks
Table 1: Risk Management Plan
(Source: Author)
Role of the risk management plan in reducing the risk
Risk management plan is effective for an organization to ensure the safety of the staffs in
the workplace. In order to reduce the risk from the workplace, it is essential for the automobile
industry to make a planning for managing the risk. Hence, risk management plan enables Toyota
to get a framework to manage the risk in a proper way. On the other hand, the risk management

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plan increases the awareness among the workers of Toyota as a result, they will take protection
during their work. However, such risk management plan is costly as the protective materials that
are used in this automobile industry are expensive. Therefore, often the employees feel
uncomfortable and irritation through such protective clothes, which affects the risk management
process. Apart from this, the risk management plan is beneficial for Toyota to provide the
assurance of the safety of the employees in the workplace. The organizational should support the
implementation of the risk management plan in order protect the employees from any type of
injury in the workplace.
Strength and weakness of the policies, procedures, and processes regarding the risk
management
Strength
Various policies, legislations, and procedures are involved in the protection of the
workers from any type of injury or illness in the workplace. According to the Health and Safety
at Work Act 2015, each organization should ensure the safety of the workers during their work6.
However, by following such Act Toyota is able to maintain the protection of the worker health
during their work. On the other hand, by following RIDDOR (Reporting of injuries, Disease and
Dangerous Occurrence Regulation 2013) an organization is able to report the death and injury of
the workers that cause in the workplace. This is helpful for Toyota to control the employees from
any accidents in the workplace. COSSH (Control of Substances Hazardous to Health Regulations
2002) is another practice of worker safety. By following this practice, Toyota will be able to
remove the hazardous substances from the workplace and ensure the protection of the
6 Y Malhotra, "Toward Integrated Enterprise Risk Management, Model Risk Management & Cyber-Finance Risk
Management: Bridging Networks, Systems and Controls Frameworks", in SSRN Electronic Journal, 2015.

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employees. Toyota has implemented the safety-training policy to increase the safety awareness
among the employees. Toyota Motor Corporation Australia Limited or TMCA policy includes
the development o safety culture in the workplace to ensure employee safety7.
Weakness
The major weakness of the safety training policy is often the employees fail to cope with
this policy as a result, their health is affected8. On the other hand, the organization often fails to
implement RIDDOR and Health and Safety at Work Act as proper communication is needed to
establish such Acts. Therefore, the green signal from the government is needed for the
application of such safety policies and these are often costly.
Opportunities
RIDDOR, COSSH are the vital policies of the safety measurement. However, the major
opportunity of such policies is to ensure the future safety of the employees during their work9.
However, in the context of Toyota implementation of such policies and procedures will motivate
the employees in their work and also increases the employee retention power of the organization.
Threat
The future threat of such policies is to monitor the policies properly. However, if the
employees of Toyota fail to monitor these policies appropriately then legal obstacle may occur to
them. This may hamper their business operation and establishment of the safety culture10. On the
7 N Scordis et al., "Principles for Sustainable Insurance: Risk Management and Value", in Risk Management and
Insurance Review, vol. 17, 2014, 265-276.
8 G Dionne, "Risk Management: History, Definition, and Critique", in Risk Management and Insurance Review, vol.
16, 2013, 147-166.
9 Scordis, N, Y Suzawa, A Zwick, & L Ruckner, "Principles for Sustainable Insurance: Risk Management and
Value.". in Risk Management and Insurance Review, 17, 2014, 265-276
10 Lončarski, I, "Risk Management (2016).". in Risk Management, 18, 2016, 1-3.

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other hand, incompliance with such policies is another threat that may harm the health of the
employees during their work and they will not able to get any compensation from the company.
Impact of external factors on risk management approach in context of Toyota
Political factor plays a great role in influencing the risk management approach in the
context of Toyota. However, the political environment of Australia is stable, which ensures that
the risk management process can be implemented in a proper manner11. GDP of Australia is high
thus risk management approach can be implemented easily. However, due to the economic
recession in 2008, a negative impact has left on the Australian economy. The risk management
approach is costlier, which may be difficult for Toyota to carry out due to the effect of the
economic recession. The social life of Australian people is advanced thus, they become aware of
managing the risk in the workplace.
Australia is technologically advanced hence, it will be helpful for Toyota to manage risk
in their workplace by utilizing the modern technology. In order to manage the risk, it is important
for the automobile industry to use the technology to implement the risk management plan12. As
for example, modern technology helps the management of Toyota to make an effective
communication through ICT (Information Communication Technology) regarding the risk
management approach with the employees. Legal factor plays an important role in
implementing the risk management approach in Toyota. However, this automobile industry
needs to comply with government rules and regulation of Australia while establishing a risk
11 N Mallikarjuna, "Quality of Worklife from an Employee Perspective: a Review Based on Automobile Industry",
in Adarsh Journal of Management Research, vol. 8, 2015, 26.
12 A Roeschmann, "Risk Culture: What It Is and How It Affects an Insurer's Risk Management", in Risk
Management and Insurance Review, vol. 17, 2014, 277-296.

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management plan. If the government gives green signal they will be able to carry out their risk
management planning otherwise they may be forced to change their planning13.
Tools, techniques to identify and measure the risks critical success factors in risk
management
Identification and measurement of the critical success factors in any planning is essential.
In the context of Toyota, they have established a risk management planning to reduce the illness,
injury, and accidents with the workers during their work. However, for the determination of the
critical success factors in risk management approach a team should be built to measure the
success of the risk management approach14. On the other hand, the workers can participate in
generating new ideas to identify the success factors in the context of risk management approach
of Toyota. Taking feedbacks from the employees and application of the multiple frameworks are
useful to identify the success factors in the risk management planning. On the other hand, use of
OAS (Objective, Advantage, and Scope) technique can be beneficial to measure the success of
the risk management planning in context o Toyota.
Role of the stakeholders to give shape the risk management plan
Stakeholders play an important role in managing the risk in an organization as without
the support of the internal and the external stakeholders it is difficult to implement the risk
management plan15. However, in the context of Toyota, the internal stakeholders like the
employees need to establish a proper communication between them to share information
13 A Botezat, "Austerity Plan Announcements and the Impact on the Employees' Wellbeing", in SSRN Electronic
Journal, , 2017.
14 C Chappell, The executive guide to enterprise risk management, in, Houndmills, Basingstoke, Hampshire,
Palgrave Macmillan, 2014.
15 P Scandizzo, "Securitizing Area Insurance: A Risk Management Approach", in Journal of Financial Risk
Management, vol. 02, 2013, 55-60.

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regarding the safety that they have. On the other hand, support of the external stakeholders is
required. As for example, the external agencies that audits the organization to ensure its safety
process.
Monitoring process of risk management plan
Management, employees and the health professionals are involved in managing the risks
in an organization16. In the context of Toyota the management identify the risk and the reasons
are detected by the health professionals. Apart from this, other experts are also involved in
monitoring the risk management planning. In order to develop, implement and monitoring of the
risk management plan workforce, technical resource and financial resources are required. To
monitor, the risk management process regular observation of the implemented process is needed.
It is important to ensure that the implemented risk management approach is effective and
supported by Toyota. For this reason, monitoring is needed to get assurance about the
effectiveness of the risk management approach. Authorization of the management is needed to
go ahead with the proposed risk management planning. Monitoring process includes the
measurement of the effectiveness of the implemented approach. However, the issues regarding
the implemented risk assessment approach are also identified in the monitoring process17.
Benchmarking is another tool to monitor the risk assessment process.
16 N Mallikarjuna, "Quality of Worklife from an Employee Perspective: a Review Based on Automobile Industry",
in Adarsh Journal of Management Research, vol. 8, 2015, 26.
17 N Scordis et al., "Principles for Sustainable Insurance: Risk Management and Value", in Risk Management and
Insurance Review, vol. 17, 2014, 265-276.

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RISK MANAGEMENT
Conclusion
The current piece of work reveals the type of risk and its management in the context of
Toyota automobile industry. However, chemical hazards in this organization lead the employees
to face health issues as strong chemicals such as benzene, isocyanate is used in automobile
industry. Risk management planning consists of identification, analysis, optimization, and
control of the risk. However, it is crucial to identify the risk before its assessment. It has been
received that chemical bronchitis and leukemia often occur with the workers of the automobile
industry. In the context of Toyota, it is crucial to monitor the implemented risk management plan
to measure its efficiency. However, by collecting the feedbacks from the employees this
organization will be able to understand whether the risk management approach is suitable or not
to reduce the particular risk.

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References
Acharyya, M, & C Brady, "Designing an Enterprise Risk Management Curriculum for Business
Studies: Insights From a Pilot Program.". in Risk Management and Insurance Review, 17, 2014,
113-136.
Botezat, A, "Austerity Plan Announcements and the Impact on the Employees' Wellbeing.".
in SSRN Electronic Journal, , 2017.
Chakroun, F, & F Abid, "Capital adequacy and risk management in banking industry.".
in Applied Stochastic Models in Business and Industry, 32, 2015, 113-132.
Chappell, C, The executive guide to enterprise risk management. in , Houndmills, Basingstoke,
Hampshire, Palgrave Macmillan, 2014.
Dionne, G, "Risk Management: History, Definition, and Critique.". in Risk Management and
Insurance Review, 16, 2013, 147-166.
Kumar Sharma, S, & A Bhat, "Supply chain risk management dimensions in Indian automobile
industry.". in Benchmarking: An International Journal, 21, 2014, 1023-1040.
Lončarski, I, "Risk Management (2016).". in Risk Management, 18, 2016, 1-3.
Malhotra, Y, "Toward Integrated Enterprise Risk Management, Model Risk Management &
Cyber-Finance Risk Management: Bridging Networks, Systems and Controls Frameworks.".
in SSRN Electronic Journal, , 2015.
Mallikarjuna, N, "Quality of Worklife from an Employee Perspective: a Review Based on
Automobile Industry.". in Adarsh Journal of Management Research, 8, 2015, 26.