University Report: Cultural Crisis of Toyota in International Business

This report delves into the cultural crisis experienced by Toyota Motors, highlighting the issues and problems that arise in international business operations. It explores theories on cultural miscalculations, such as the Stages Model, and discusses the management of business organizations across diverse cultures. The report emphasizes the importance of business ethics, particularly those aligned with Biblical Christian cultures, for achieving success in international markets. It provides strategies for managing cultural differences, including the need for thorough knowledge and respect for foreign cultures, as well as the importance of adapting business policies to align with local religious backgrounds. The analysis draws upon various academic sources to support its arguments and offers valuable insights into the complexities of global business and cultural sensitivity.

Running head: INTERNATIONAL BUSINESS
Cultural crisis of Toyota
Name of the student
Name of the university
Author Note:

2
INTERNATIONAL BUSINESS
Table of Contents
Introduction......................................................................................................................................3
Issues and Problems in the operation of International business......................................................3
Theories on Cultural Miscalculations..............................................................................................5
Figure 1- Stages Model....................................................................................................................6
Management of Business Organizations across different cultures..................................................6
Business Ethics to be followed according to Biblical Christian Cultures.......................................8
References........................................................................................................................................9

3
INTERNATIONAL BUSINESS
Introduction
The following report is based on the cultural issues that need to be addressed by each and
every organization while expanding their business internationally. There are numerous examples
in the past where large scale organizations have suffered badly just because they failed to meet
the cultural expectations of the countries where they ran their operations. Cultural difference is
one of the major considerations that determine whether the business is successful or not. The
failure of the product or services to add value and meet the desires of the local community will
only lead to loss. It is important for the organization to have a transparent idea about the persons
residing in the community and their culture. The case of Toyota Motors crisis in 2010 is one of
the best examples of such a cultural failure.
Issues and Problems in the operation of International business
The globalization of the modern market has forced the organization to operate in a
number of different countries having different cultural values. The crossing of geographical
boundaries has led to the establishment of a new range of multicultural organizations where
people from all the countries with different languages, different race, and religion are working
together (Bowen and Zheng 2015) . The organizations are having a gala time operating in such a
strange environment but operating and managing the company following the cultural values is
tough for the companies. An effective knowledge and use of cross cultural diversity can provide
the management of the organization with a source of experience and innovative thinking to
enhance the competitive edge of the organization. The main cross cultural issues that the
company faces are as follows;

4
INTERNATIONAL BUSINESS
a. Inadequate trust among the employees- Trust among the employees of the organization
is one of the main reasons for the success of the business. However working in a cross
cultural environment can often lead to inadequate trust among the different employees of
the organization. For example an American employee of an organization will have much
less trust with an employee of Asian origin as the cultures of both the countries are in
striking contrast to each other (Stahl and Tung 2015). The absence of trust among the
employees will weaken the operational efficiency of the organization.
b. Biased Nature- The biased nature that exists in the company structure also does not help
the cause of the company as because generalized perceptions of the employees of a
certain group leads to failure.
c. Wrong Communication- The case study of Toyota Motors has clearly shown that wrong
communication strategies have led to a media outburst in America where communication
comes first and action later. The Asian Company was wrong in their Public Relations
approach which led to the loss of their famed reputation both in America and also in the
world (Austen-Smith et al. 2017).
d. Perception- The people from developed countries of the world have a feeling of
superiority than the people coming from the less developed or developing countries. Such
wrong perceptions can lead to racism in the workplace and will lead to failure. The wrong
perception of the American customers by the management of Toyota Company is a
perfect example of the following.

5
INTERNATIONAL BUSINESS
Theories on Cultural Miscalculations
Contemporary business organizations follow a number of different theories to avoid
cultural shocks similar to that of Toyota crisis in 2010. Two of the main theories are;
1. Stages model- Stages Model is divided into different stages namely;
a. Pre-contemplation- In this particular stage people does not try to take action in the
coming future.
b. Contemplation- In this stage the employees of the organization tries to start the healthy
behavior in the coming future.
c. Determination- In this particular stage people tries to get ready to complete any activity
within a particular deadline. People act differently with the others in the workplace and
try to get an idea about each other.
d. Action- n this stage people change their behavior recently and within a short period.
e. Maintenance- The change in the culture of the people are tried to retain to have a bright
future.
f. Termination- The termination stage is the last stage where the cultural change is no
longer maintained.

6
INTERNATIONAL BUSINESS
Figure 1- Stages Model
Source- (Picciotto and Mayne 2016)
Management of Business Organizations across different cultures
The management of organizational culture across different countries is important for the
success of the business in the particular country. The organization style differs from being
organic, informal or people oriented to match some of the most common sociological
dimensions. Cross Cultural management refers to the examination of human behavior within all
the organizations from an international perspective (Cavusgil et al. 2014). Cultural management
helps to compare the organizational behavior across different nations and cultures and tries to
improve the interaction of the co-workers, managers, executives, clients and many others as
such. The cross cultural management focuses on reduction of the cross-cultural differences and
barriers and the creation of awareness in order to have a better communication and cooperation
at the workplace (Tixier Jr 2017). It is very much tough for the managers of the organization to
keep the different employees of the organization under control and maintain the operational

7
INTERNATIONAL BUSINESS
efficiency. If the managers are successful in keeping the employees of the organization together
by keeping aside all the differences, it will be helpful to retain them much more easily. Therefore
it is utmost important for the business to recognize the business culture, values and ethics all
around the world where it operates (Oxford 2014).
Some of the main strategies that need to be followed by the management of the
organization are;
1. Thorough knowledge of the foreign culture-The first and foremost strategy in the
management of the organization internationally lies in the proper knowledge of the new
cultures like the language, food habits, special courtesy, perceptions and many other
similar cultural knowledge (Picciotto and Mayne 2016).
2. Respect for the particular foreign culture- It will be hard to gain success in a foreign
market by only having the knowledge of the culture. Rather the respect for the particular
culture can make the company more acceptable to the native residents (Ferraro and
Briody 2017). It will be unfair to judge a culture by terming it as superior and inferior.
Every culture is different from the other thus irrespective of their characteristics they
need to be respected.
3. Ignoring the cultural differences- This strategy is employed by the supervisors and the
managers of the organization after a certain period of time. This particular difference
helps the managers to remove the barriers to communication amongst each other and
establish proper understanding amongst them.
4. Management of the differences- The management of the differences is generally adopted
by synergic organizations (Forsgren and Johanson 2014). These types of companies

8
INTERNATIONAL BUSINESS
identify the effect of cultural differences that is a source of both advantage as well as
disadvantage. They treats the employees in the same way irrespective of their posts.
Business Ethics to be followed according to Biblical Christian Cultures
Each and every of the business organization that expands internationally must formulate
their business policies according to the religious background of the particular country. It will be
easy for an organization to attain a competitive advantage in a country if they respect the
religious background of the majority. This following part of the project deals with some of the
business ethics that needs to be followed according to Biblical Christian Cultures (Aldrovandi
2014). The critical problem of growth vs. no growth must be addressed with the theology of
creation.
Some of the main ethics as mentioned in Bible that must be followed by the business
organizations are;
1. Understand that God called us to work
2. Work so that you can share with those who need it
3. Work in such a way that glorifies god
4. Be faithful in your work so that you can earn respect from others
Therefore the aim of the business organizations should be to stick to these biblical references
and organize the business and formulate the policies in lines to attain success in a Christian
dominated country.

9
INTERNATIONAL BUSINESS
References
Aldrovandi, C., 2014. Cultural Apocalypse. In Apocalyptic Movements in Contemporary
Politics (pp. 195-220). Palgrave Macmillan, London.
Austen-Smith, D., Diermeier, D., Zemel, E., Diermeier, D. and Merkley, G., 2017. Unintended
acceleration: Toyota’s recall crisis. Kellogg School of Management Cases, pp.1-16.
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. Stahl, G.K. and Tung, R.L., 2015. Towards
a more balanced treatment of culture in international business studies: The need for positive
cross-cultural scholarship. Journal of International Business Studies, 46(4), pp.391-414.
Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L., 2014. International
business. Pearson Australia.
Ferraro, G.P. and Briody, E.K., 2017. The cultural dimension of global business. Taylor &
Francis.
Forsgren, M. and Johanson, J., 2014. Managing networks in international business. Routledge.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1), pp.23-34.
Oxford, R.L. ed., 2014. Understanding peace cultures. IAP.
Picciotto, S. and Mayne, R. eds., 2016. Regulating international business: beyond liberalization.
Springer.

10
INTERNATIONAL BUSINESS
Reiche, B.S., Stahl, G.K., Mendenhall, M.E. and Oddou, G.R. eds., 2016. Readings and cases in
international human resource management. Taylor & Francis.
Stahl, G.K. and Tung, R.L., 2015. Towards a more balanced treatment of culture in international
business studies: The need for positive cross-cultural scholarship. Journal of International
Business Studies, 46(4), pp.391-414.
Tixier Jr, J.S., 2017. Observations on Things Measured in the Bible.