Toyota Motor Corporation’s CSR

This article discusses Toyota Motor Corporation’s corporate social responsibility (CSR) strategies and how they fulfill the interests of its stakeholders. It explores the company’s CSR areas, including employees, customers, investors, environment, and communities, and how Toyota addresses their interests through various programs and initiatives. The article also highlights the impact of CSR on Toyota’s financial performance and competitive advantage. Overall, Toyota Motor Corporation serves as a role model for effective CSR implementation.

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Corporate Responsibility
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Toyota Motor Corporation’s CSR
As a global automotive corporation, the company’s CSR activity primarily deals with
several stakeholders that have distinct differing interests and demands. Toyota Motor
Corporation’s main CSR areas arranged based on their importance in affecting the organization
are the employees, environment, investors, customers, and communities. According to the
corporation, the employees are the most essential stakeholders (Brammer and Millington, 2008,
pp.1332). The employees’ interests are job security, fair employment treatment, and career
development. Toyota’s CSR strategies address this group’s interests by offering them reasonable
salaries and wages as well as a career development program to advance the staff (Dunphy, Benn
and Griffiths, 2014, pp.27). For instance, Toyota Corporation has got an On-the-Job
Development (OJD) program, including training careers that are specific to career paths in the
organization. Such training courses comprise of Toyota Way Development, Management
Development, including Technical Development. Also, Toyota Corporation also provides
financial assistance to its employees who are continuing with formal education. As such,
Toyota’s CSR programs meet the needs of the employees as its main stakeholders.
The customers are the other stakeholders in the organization’s CSR. The group’s interests
are high-quality automobiles and service, accompanied by fair pricing. To address the customers’
interests, the corporation rapidly innovates based on The Toyota Way as well as the Toyota
Production System (TPS) that work towards maximizing efficiency, quality along with
innovation (Garriga and Melé, 2004, pp.61). Toyota Corporation puts most of its resources to
make sure that the customers are satisfied and they develop trust towards the company. The
corporation has got a “Customer First” policy that seeks to ensure the company offers products
and services that have exceptional performance. The corporation also tries to enhance trust and

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confidence among the customers by providing customer consultation sessions. As such, Toyota’s
CSR programs suitably cover the customer’s interests as stakeholders.
Investors are Toyota’s other major stakeholders. The corporation is of the belief that
investors are the backbone of the business. The investors are primarily interested in the
profitability of the business (Kramer and Porter, 2011, pp.72). The organization addresses the
interests of this group by emphasizing on the corporation’s global business strength. For
example, in the late 2000s, Toyota Motor Corporation experienced a recession and enormous
product recalls as a result of safety issues that include sticking pedal problem. However,
following Toyota’s reorganization in 2013, the corporation mainly focuses on enhanced business
resilience as the key priority over rapid expansion. To prioritize its investors, Toyota Corporation
aims at increasing the per share earnings. The organization closely watches the time when they
disclose shares and other related information to the investors. Hence, Toyota’s CSR makes sure
that the investor’s interests are addressed.
Nonetheless, Toyota Motor Corporation has got corporate social responsibility strategies
aimed at attaining environmental goals. As Toyota’s stakeholder, the environment’s main
interests are environmental conservation and business sustainability (McWilliams and Siegel,
2001, pp.119). Toyota Motor Corporation address these interests through the Toyota
Environmental Activities Grant Program. Using this CSR program, Toyota Motor donates funds
and automobiles for environmental conservation. In 2008, for instance, the corporation donated
an approximate of $1 million and five hybrid cars to support Everglades National Park. Besides,
across the United States, the Toyota Together Green Program supports several networks of
environmental initiatives and advocates. From the analysis, it is evident that Toyota Motor

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Corporation’s corporate social responsibility fulfills the interests regarding the natural
environment.
Toyota Motor’s last area of CSR are the communities. The communities are concerned
for their socioeconomic development. The corporation’s CSR strategies address the
communities’ interests using varying community development and support programs (Muller,
2006, pp.190). For instance, Toyota Motor has got education outreach programs that promote
literacy. Nonetheless, the organization’s Toyota Go Safely initiatives offers safe driving
education as well as tools to the communities. The company’s Meal Per Hour Program also
donates foods to Food Bank. Additionally, the corporation works in cooperation with the
American Red Cross in supporting community development. As such, Toyota Motor
Corporation’s CSR satisfies the communities’ interests.
Toyota Motor Corporation’s CSR Business Case
Toyota Motor Corporation’s key priorities of its financial strategy are sustainable growth
by continuously investing, enhancing profitability as well as capital efficiency, and preserving a
solid financial base. The organization’s three key priorities are facilitated by its corporate social
responsibility strategies. The organization’s social and environmental consciousness has
improved its competitive advantage. With its environmentally sound product, - Toyota Prius and
Body Shop- Toyota Motor Corporation has acquired a competitive advantage over its rivals for
its safe automobiles (Barnett and Salomon, 2006, pp.1110). Taking the opportunity, Toyota has
pioneered innovation, benefiting the communities, thus enhancing its competitiveness. The
Toyota Prius is the first of its kind, - a successful gasoline/electric- vehicle that has provides both
competitive and environmental advantages. Toyota Prius’ engine is hybrid, emitting only 10% of

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harmful gases emitted by normal engines, consuming half as much gas. In 2004, The Motor
Trends Magazine rated the car as the ‘car of the year’ and it is connected to the slogan “harmony
between man, nature, and machine”. Innovation is a corporate social responsibility practiced by
Toyota Motor Corporation to obtain a strategic advantage over its rivals such as Ford.
Competitive advantage is as a result of an organization implementing CSR strategies for the
company’s benefits (Nelling and Webb, 2009, pp.200). Incorporating CSR in its practices,
Toyota Motor has acquired an opportunity to premium price its products. Additionally, this has
helped the organization promote its products thus attracting customers, which translates to
improved organizational financial performance.
Also, Toyota Motor Corporation adopts an advertising method that infers that the
organization has got CSR attributes. The corporation uses corporate social responsibility as a
means of building a competitive edge, innovation, and reputation (Orlitzky, Schmidt and Rynes,
2003, pp.417). For instance, one of Toyota Motor Corporation’s CSR stunt is when it partnered
with SunPower Corporation and installed 2.28-megawatt solar electric power system on TMS
Ontario Part Center’s roof which is owned and financed by a third party. As a result of this,
Toyota Motor benefited both financially and environmentally without incurring any expenses. At
the same time, the company got brand exposure and promotion of its products. The photovoltaic
system completed in 2008 became North America’s biggest single roof power installation.
Due to the company’s concern of its stakeholders, - the employees, customers, investors,
environment, and communities- Toyota has posted better-than-expected financial performance,
and over the past five years, it has outperformed the automobile industry. During the 2018
financial year, the organization’s total assets were estimated at 5,258,500 (millions of yen) from
4,558,212 (millions of yen) in 2017. Cash flows from operating activities were 268,567 million

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yen and increase from the previous year which was 239,094 million yen. Net cash from
financing activities rose from 789 million yen to 153,303 million yen (Toyota-industries.com,
2019). Nonetheless, Toyota Motor’s adoption of CSR made it succeed during the 2010 financial
year despite the recall saga that affected a global fleet of almost 10 million vehicles.
Additionally, the customers are most concerned with the quality of the automobiles. Quality has
been a characteristic that has been emphasized by Toyota. The customers make the decision to
purchase a particular brand based on its reliability and durability (Salzmann, Somers and Steger,
2005, pp.32). To stress on quality, the organization has improved on their products safety and
have continuously innovated to ensure they build on customer trust. The company’s strong
reputation and brand image through its CSR strategies have helped boost its sales both
domestically and internationally. The customers are conversant with Toyota brand including its
popularity, hence they are more willing to pay to obtain its premium products. All these SCR
strategies have led to Toyota Motor’s high financial performance.
CSR Activities With Reference To the Concept of ‘Strategic CSR’
By taking a strategic corporate social responsibility, an organization can determine the
activities that they have resources to devote to being socially responsible. Additionally, they can
select activities that strengthen their competitive advantage. By incorporating CSR in an
organization’s overall plan, the company can make sure that the increasing shareholder value, as
well as profits, do not overshadow their need of remaining ethical to their stakeholders, -
employees, customers, investors, environment, and communities (Aguilera, Rupp, Williams and
Ganapathi, 2007, pp.841). The following are the major factors associated with Toyota Motor’s
CSR:

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Ecological economics is a multicultural field of CSR. Ecological economics includes
ecological sustainability, a wider field of history, psychology, anthropology, and archaeology
(Moon, Crane and Matten, 2005, pp.451). Highlighting the differences, environmental
economics can be inferred as economics’ sub-disciple that is applicable to the environment.
Toyota Motor Corporation, for instance, is regarded as the full-line automotive manufacturer,
signifying the best in terms of fuel-efficiency. Application of advanced engine technologies
aided the inventiveness in the manufacture of automotive vehicles. Toyota has also introduced
Electric Power Vehicles that comprise of Corolla, Camry, as well as RAV4. The three vehicles
reduce the level of fuel consumption that assists in the elimination of pump belt and hydraulic
lines.
Ethical ecology, on the other hand, is the study of corporate values, individuals, as well
as humans. According to Ihlen and Roper (2014), ecological ethics involves the evaluation,
justification, specified values, along with normalized characterization of diversified aspects.
Traditional ethics incorporates the adverse impacts of environmental conditions which are
dependent on the interest of humans. In describing ecological ethics, sustainability is the most
prominent norm that is considered (Siegel and Vitaliano, 2007, pp.781). Over the last decades,
Toyota has had some prominent ethical concerns. In the first case, the organization admitted their
negligence in safety concerns as well as delaying the investigation process, aimed at saving
money. Ecological ethics determine the most essential approaches for a customer that has been
dealing with Toyota’s product or service. Despite, Toyota Motor Corporation did not maintain
such purposes. In addition, the company’s name is also involved in other unethical behavior that
unjustified the maintenance of CSR.

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Discretionary ecology refers to the negligence of the most successful devices that are
related to a company’s sustainability. The policy signifies the policy maker’s decisions in
judging a policy’s oppositions, dominated by the pre-determined guidelines. Hallstedt (2015)
views a discretionary policy as actions taken to respond to the economic structure’s changing
scenario. In the past. Toyota Motor has faced some of these promising situations due to failure to
adhere to ethical behaviors towards the discretionary ecological aspect. In such a purpose, the
systematic issues are mainly the poor quality of the automotive products.
The areas for improvement in Toyota’s CSR is its communication during times of crisis.
To improve its communication plan, the organization may consider following Lyons’ formula, -
success in managing crisis requires timing, response, along with sincerity (Snider, Hill and
Martin, 2003, pp.178). For instance, if Toyota had reacted swiftly the moment it had identified
the problem with cars by sending communication experts to explain the issue to the customers
and how it planned to solve the problem rather than delaying the investigation process to save
money, it could manage to pluck itself from the crisis. In addition, Toyota Motor should always
develop a communication plan whenever they want to address the shareholders.
Conclusion
Toyota Motor Corporation is a role model for its use of CSR strategies in fulfilling its
stakeholder’s interests. The organization has got a comprehensive CSR approach that seeks to
address all its stakeholders. Regardless of the main challenges that are linked to product recalls
due to safety concerns and global recession, the corporation has taken the needful steps in
ensuring that its practices are on the right track of successfully maintaining efforts of satisfying
the stakeholders, - employees, customers, investors, environment, and communities, for high

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CSR performance. Such CSR strategies include job security, fair employment treatment, and
career development for its employees; high-quality automobiles and service, accompanied by
reasonable pricing for the customers; high profits for the investors; environmental conservation
and business sustainability including socioeconomic development for the communities.

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