Managing, Leading and Stewardship: A Case Study of Toyota's Organizational Practices

This report analyzes the management practices of Toyota through the lens of ethics and moral dimensions, and stakeholder organizational theories. It also discusses the limitations of stakeholder theory and provides recommendations for better management practices.

Running Head: MANAGING LEADING AND STEWARDSHIP 0
Managing, Leading and Stewardship
9/11/2018

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Contents
Introduction...........................................................................................................................................2
Company Overview...............................................................................................................................2
Nature of organisations and Issues........................................................................................................2
Toyota case through the lens of Ethics and Moral dimensions, and Stakeholder organisational theories
...............................................................................................................................................................3
Theories reveal insights into Organisation practices..............................................................................4
Difference in perspectives.....................................................................................................................4
Critique of limitation of Stakeholder theory..........................................................................................4
Recommendations.................................................................................................................................5
Conclusion.............................................................................................................................................5
References.............................................................................................................................................7

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Introduction
The report brings about the discussion on the topic, “Managing, leading and stewardship,
which discusses about the organisational practices. Every organisation in terms of the
environmental conditions faces some of the challenges or issues, which hampers the
performance of the organisation. There are a number of organisational theories that highlight
on the questionable management practices. The management practices of every organisation
are perceived differently by different managers, leaders, in context of the business
environment. For drawing an insight into management practices and concepts, a case study
has been taken for analysis to draw outcomes, from different perspectives. The analysis has
undertaken on the case of the ‘Toyota’ and the company’s practices and issues, in respect of
any management/organisational theory. In addition to the organisational theories, the report
in the later part also focuses upon the criticism of the theory and suggestions towards better
management practices (Bryson, 2018).
Company Overview
Toyota Motor Corporation, known as Toyota, is a Japan based multinational automotive,
manufacturer located in Toyota, Aichi, Japan. Founded on 28th august, 1937 it is a public
company, dealing in automobiles, luxury vehicles, commercial vehicles, and engines. The
founders and the other key persons of Toyota are Kiichiro Toyoda, and Takeshi Uchiyamada
(Chairman), Akio Toyoda (President). The company has international existence in more than
170 countries across the globe. The company manufactures a number of automobile, which
includes cars, minivans, and pickups. The models under the company are corolla, Camry,
4Runner, Land cruiser, luxury Lexus lines, and the other fully sized trucks. The company is
considered as the fifth largest in the world in terms of revenue (Weingarten et al., 2015).
Nature of organisations and Issues
Toyota engages in the design, manufacturing, and the sale of cars, minivans, and other sport
related vehicles. The company also provides finance to the dealers and their customers to
purchase or lease vehicles. Therefore, it sums up three business segments of the company
including automotive, financial services and others. Toyota Motor Corporation highlighted
some of the issues in their management and organisational practices through following cases.
These were the case study on Total Quality Management and Lean manufacturing through

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lean thinking approach. Another was the issue or the case of the Swedish, which described
about the managerial issues in the organisation (Bhamu and Singh Sangwan, 2014). The
biggest issue was the recall in the history of the automotive. Toyota being one of the leading
manufacturer in the automotive industry, affects the decisions and working of other
industries. The managerial issues were noticed at the time of crisis in US, because of the
policies followed by the company. Toyota follows a centralized management structure, which
puts the authority of decision-making in the hands of the top executives of the company
(Andre et al., 2015).
Management Issues
The major issues in the organisational or managerial practices of Toyota include the Quality
Control, Centralized management policies. The total quality management approach refers to
the principle that every staff in the organisation has to be committed to ensure the quality in
every aspect of the operations. Toyota has been practising from years on three components of
the TQM, total quality management. These components are customer satisfaction, employee
involvement, and continuous improvement. The issues in the managerial or organisational
practices were the result of company’s desire for global expansion and the drive for earning
huge profits. In the pursuit of achieving high profits Toyota, neglected the quality check of
their manufacture, which hampered the reputation and the brand image of the company
(Reddy, 2016).
Toyota case through the lens of Ethics and Moral dimensions, and Stakeholder
organisational theories
With an increasing integrated role of the organisations in the business world, it has been
analysed that the management’s role is becoming more complex and crucial to every
organisation. The complex nature of the company has been studied from the perspectives of
the ethics and moral theory and stakeholder organisational theory. Apart from the quality
defects, the defaults in the practices led to the big issues in ethics. This was observed before
and during the recall (Pearson, 2017). Due to the ethical issues, despite the quality the
company suffered from the crisis of confidence. These all factors led to the negative impact
on the stakeholders especially on the employees, and ignored the balance of interests of
stakeholders wholly (Bundy, Vogel, and Zachary, 2018).

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Theories reveal insights into Organisation practices
Discussing about the stakeholder theory and the theory of the ethics and moral values in any
organisation like Toyota, it considers few aspects. These aspects are relative to the
performance and success of the organisation. The belief that an organisation should maximize
the benefits and interests of all the stakeholders in an organisation is the attribute defined by
the theory. The interests of customers, shareholders, suppliers, employees, investors, and the
community must be a highest objective for the company. The management theories put a
great emphasis on the organisation’s practices, policies, processes as they set the rules or
basis of guidelines for the members of the organisations to follow and achieve the objectives
of the organisation (Bowen and Zheng, 2015).
Difference in perspectives
Toyota, being a leading manufacturer plays an important role in the automotive industry.
Toyota is known as lean manufacturing, which has become an important part of the company.
Different stakeholders view or perceive the company in different manner. Despite the several
recalls due to the quality defects, the company establishes to maintain the stakeholders
interest, and changed some policies. Toyota stated that it would have the stakeholder’s
oriented approach, which will include and fulfil the interests of all stakeholders who have
interest and who affect the operations of the company. Every organisation has some of the
stakeholders who influence the brand image, reputation or the profits of the company (Park
and Roome, 2017). Therefore, company maintains an effective communication with their
stakeholders, and their employees for the better communication of their ideas for achieving
their goals. From the perspective of consumers, Toyota has the best brand perception
especially on cars, which builds a unique feeling of trust and motivation to rely on the
company. Being, a brand leader the company has a strong hold on the minds of the
consumers (Garbelli, 2016).
Critique of limitation of Stakeholder theory
The organisational or management theories in the company Toyota, has been effectively
affecting the role of the practices, policies on the working of the company. Along with
positive impacts, the stakeholder theory has been criticised to a certain level. Two main
limitations, firstly it is anchored as a separate entity, which was mainly focused upon creation
of economic value for itself and owners of the company. The second limitation is that it relies

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on regulation on the compulsory mechanism, for the externalities generated. As a result, to
analyse the overall benefits, the stakeholder theory is meant to highlight about the economic
value creation rather than generating societal value.
There are some of the other theories which relates to the organisational practices of the
company Toyota, is the agency theory (Li et al., 2015).The agency theory defines the
relationship between the agents and the business. It relates to the relationship that includes
solving the problems between the agent and the business, which may be the result of the
unaligned goals. The theory of agency has also been criticised in the context of the company
Toyota, in a way that it focuses only on the bilateral relationships and do not emphasize the
importance or the relevance of the reality of the external environmental situations. Therefore,
these organisational theories has been criticised by people from their perspectives, bases on
certain grounds of the aspects of the management (Rees and French, 2016).
Recommendations
The company should focus upon both the internal and external environmental situations, and
then devise strategies accordingly. Moreover, there should be more emphasis on value
creation for both the organisational members as well as the society. The company must
maintain the quality along with the quantity, which will be beneficial to all the stakeholders
for the company. The company must aim at following the culture and ethics where it works,
depending upon the nature and culture of the country and the organisation.
Conclusion
To conclude the above discussion, it has been analysed that the management or organisational
practices play vital role in every aspects. These practices include stakeholder’s perceptions,
CSR policies and others affect the performance and effectiveness of organisation in the
longer-term. As with the context to the report, the company Toyota has been influencing the
automotive industry largely. Over years, the company has received great importance and
reputation, in the industry amongst competitors, which forms the stepping-stones of success
for the company in future. The company has also faced some of the problems regarding the
quality of their products i.e. cars. The report also included the application and implication of
the management theories such as agency theory, stakeholder theory and the theory of ethics
and moral values. These theories have been linked with the organisation. Toyota has achieved
sustainability in terms of the operations, from years and has successfully implemented CSR

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policies effectively. Hence, the company is expected to achieve greater success in the coming
future years.

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References
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Future generations of cathode materials: an automotive industry perspective. Journal of
Materials Chemistry A, 3(13), pp. 6709-6732.
Bhamu, J. and Singh Sangwan, K. (2014) Lean manufacturing: literature review and research
issues. International Journal of Operations & Production Management, 34(7), pp. 876-940.
Bowen, S.A. and Zheng, Y. (2015) Auto recall crisis, framing, and ethical response: Toyota's
missteps. Public Relations Review, 41(1), pp. 40-49.
Bryson, J.M. (2018) Strategic planning for public and non-profit organizations: A guide to
strengthening and sustaining organizational achievement. United States: John Wiley & Sons.
Bundy, J., Vogel, R.M., and Zachary, M.A. (2018) Organization–stakeholder fit: A dynamic
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stakeholders. Strategic Management Journal, 39(2), pp. 476-501.
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Li, G., Fan, H., Lee, P.K. and Cheng, T.C.E. (2015) Joint supply chain risk management: An
agency and collaboration perspective. International Journal of Production Economics, 164,
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Reddy, C.K. (2016) The Role of Crisis Management for the Sustainability in the Global
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Rees, G. and French, R. eds. (2016) Leading, managing and developing people. United
Kingdom: Kogan Page Publishers.
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