Managing the Organization: Toyota's Business Operations Report

This report provides a comprehensive analysis of Toyota Motor Corporation, a leading multinational automotive company. It begins with an executive summary and an overview of Toyota's historical background, corporate strategy, and organizational structure, including recent changes and their implications. The report delves into stakeholder management, financial performance over the past five years, and competitor analysis. It examines both the internal and external business environments, including Porter's Five Forces and PESTLE analysis. Furthermore, the report highlights Toyota's initiatives in environmental sustainability, particularly the rise of hybrid vehicles. It concludes with recommendations and a discussion of the challenges and opportunities facing Toyota in the automotive industry, emphasizing the importance of adapting to market conditions and maintaining a competitive advantage. The report includes detailed tables and figures illustrating key financial and operational data, providing a thorough understanding of Toyota's position in the global market.

Running head: MANAGING THE ORGANIZATION
Managing the Organization
Name of the Student
Name of the University
Author Note

1MANAGING THE ORGANIZATION
Executive summary
The following report has aimed at bringing out the market conditions of Toyota Motor
Corporation in Japan and all over the world. It is one considered one of the most successful and
reputable car companies in the world. It operates in several countries in different continents. The
overview of the organization has been discussed in this report. The hierarchical changes have
been brought out to measure the significance of the success story of Toyota. The environmental
analysis has been done on the company based on both the internal and external business
environments. The different challenges that the company faces in the competitive business
environment have been gone through as well. The ways they can deal with all these challenges
have been recommended. The financial performance of the company has been described through
proper analysis. The financial performance of the company in the last five years has been quite
extraordinary. The initiatives of Toyota in catering to environmental sustainability have been
noted down. The rise of hybrid vehicles by Toyota is found to be one of the most crucial factors
for the growth of the company. Therefore, their commitment to protect the environment is indeed
praiseworthy and this is thir main weapon to deal with challenges in the automotive industry.

2MANAGING THE ORGANIZATION
Table of Contents
Introduction......................................................................................................................................3
Toyota Motor Corporation – A Historical Overview......................................................................4
Corporate strategy and structure of Toyota Motor Corporation......................................................5
Stakeholder information and management....................................................................................12
Place and value of Toyota in Stock Exchange in the last five years.............................................14
Five Year Competitor analysis......................................................................................................17
Analysis of the environmental factors...........................................................................................19
Internal environment analysis....................................................................................................19
Value Chain Analysis of Toyota................................................................................................21
External environment analysis...................................................................................................22
Porters 5 Forces Analysis..........................................................................................................22
Pestle Analysis...........................................................................................................................24
Recommendations and Conclusion................................................................................................26
References and Bibliography.........................................................................................................29

3MANAGING THE ORGANIZATION
Introduction
The purpose of the following paper is to discuss how the Toyota Motor Corporation
operates its business in the automotive industry. The company is one of the most successful and
reputable companies in their industry. This paper will analyze the business operations of the
company and the problems they face regarding achieving their aims. The automotive industry
has become very much challenging in recent times. Toyota has a sterling reputation for
innovating new environment-friendly cars as a part of its corporate social responsibility. The
company has been regarded as one of the most sustainable car companies in the world for a long
time now. In the recent times, the concept of looking after the environment since the
environment is in great danger indeed. This has become a headache for most companies but
Toyota has set an example in front of the whole world on how to conduct their operations
properly. The environmental analysis of the company will be done in this paper, including the
macro ecological and micro environmental analysis.
The competitor analysis will also be conducted in the paper since it is one of the crucial
aspects to finding out the limitations of Toyota Motor Corporation. The company is an integral
part of the Toyota Group, one of the largest conglomerate company groups in the world. The
stand of the company within Ireland and the European Union will also be described in the paper
as well. Therefore, the growth of the company from the financial aspects will also have to be
called down in this paper as well. The corporate strategy of the company will be analyzed to
identify how Toyota Motor Corporation will cope up with the challenges. It is also very

4MANAGING THE ORGANIZATION
important to know about the shortcomings of the organization to suggest some ways of
recovering against those limitations.
Toyota Motor Corporation – A Historical Overview
As discussed earlier, Toyota Motor Corporation is one of the most famous companies in
Japan and the entire world as well. It is a multinational company in the automotive industry with
its headquarters situated at Aichi in Japan. The corporate structure of the Toyota Company is
beneficial for them to carry out their operations in a proper manner. More than 3 million
employees are working for Toyota all over the world (Toyota.com 2019). As for the financial
aspects, Toyota Motor Corporation was ranked as the sixth largest company in terms of the
revenue generation. This is why the company has gone on to focus on their innovation
perspectives within the automotive industry. The company was founded in the year 1937,
and it has continued its excellent reputation in the world as well (Toyota.com 2019). The
current chairman of the company is Takeshi Uchiyamada.
The company is known for its products like the hybrid electric vehicles, i.e. widely
regarded as one of the most sold product lines. The corporate governance structure and strategy
of the company is also helpful for them to carry out their business activities very smoothly. The
company is also interested in the motorsports, and they have their racing cars in the Formula 1
races. The company has expanded from Japan to regions like Europe, Australia and North
America (Toyota.com 2019). Though they have several competitors all over the world like
Volkswagen, Honda, Nissan, Ferrari, Mercedes, Audi and many more. However, they are still
on the way to chase their dreams by attaining their competitive advantage.

5MANAGING THE ORGANIZATION
Corporate strategy and structure of Toyota Motor Corporation
The corporate structure of Toyota will be discussed here. The divisional organizational
structure is being followed in Toyota. The company implemented some changes in the year 2013
and this proved to be very much useful for the welfare of the organization. The product recalls
they have always been a significant issue in the case of Toyota since they provide lots of
diversified products. This was completely the reflection of the safety issues in the organization.
This is why the changes had to be implemented within Toyota (Toyota.com 2019). The strong
hierarchy in Toyota has been centralized, and it is the central focus of the company to give
productive outcomes (Kotler et al. 2015). The corporate organizational structure of the company
was like the spoke-and-wheel structure. This was quite effective for the organization and
transparent relationship between management and employees was very fruitful as well. Still there
were some negative points in the organizational structure of the company as well. All the
decisions of the company had been made by the headquarters of Japan (Ghai and Vivian 2014).
This is why the production units did not have the proper type of communication between them.
So, it was quite essential to change this kind of organizational structure a well. The safety issues
could not be addressed due to these issues. This is why this organizational structure of the
company had to go through the change (Toyota.com 2019). The CEO of the company had also
agreed to implement this change in order to make the system work smoothly.

6MANAGING THE ORGANIZATION
Source: (Harrison, Freeman and Abreu 2015).
Apart from that the problem arose regarding the communication between the individual
business units of the organization. This was also a very big problem for the organization indeed.
After implementing the required changes, the company had brought in all the changes that would
make the process work with effectiveness. The new organizational structure of the company will
have all the three essential features of the industry. These are geographic divisions, global
hierarchy and product-based divisions (Toyota.com 2019). The global authority of the company
is still in action although it had been reorganized. However, the business unit chiefs and regional
chiefs have the power of making the decisions. The centralized decision making power has been
reduced as well (Crane, Matten and Spence 2019). The reports of the business units are sent to
Japan, the global headquarters.
The current geographic organizational structure of Toyota Motor Corporation consists of
eight main divisions. These divisions are Europe, North America, Japan, East Asia and Oceania,
Asia and Middle East, Africa, Latin America and Africa (Toyota.com 2019). The regional heads
of the Toyota Motor Corporation are given the responsibilities of judging the market conditions
and improve their product lines. The services of the organizations can also be improved through

7MANAGING THE ORGANIZATION
these regional units (Kotler et al. 2015). Thus the entire processes are carried out. The product-
based divisions of the company also give way for the betterment of the situation. There are
mainly four product-based divisions. These divisions are A) Lexus international, B) Unit Center,
C) Toyota no. 1 to conduct operations in Japan, North America and Europe and finally D)
Toyota no 2 to conduct services in all other regions of the world (Toyota.com 2019). The board
of directors supplies all the information to the middle management level, i.e. geographic
organizational structure.
Through the implementation of this new organizational structure, Toyota Motor
Corporation will be able to provide flexible service to its customers. Previously, there were many
problems that the company had faced to carry out their operations due to their organizational
structure (Cheng, Ioannou and Serafeim 2014). The board of directors has been able to shift the
power to their regional heads, and thus they can focus on local conditions in a better way (Kotler
et al. 2015). Through the implementation of this structure and co-operation from the board of
directors, Toyota Motor Corporation will be able to deliver the high quality products to all their
customers.
In this section, the topic of discussion will be the corporate strategies of the company.
Corporate policies are regarded as the most useful ones that help them to attain a competitive
advantage (Harrison, Freeman and Abreu 2015). The corporate strategies have to be
implemented by Toyota Motor Corporation by finding out their strengths and weaknesses in
different countries, including their home country. The organizational activities must be shaped in
a way so they can attain their aims and utilize these strategies to gain a competitive advantage.
The business plans should be made up by the marketing managers so they can implement all
those strategies for the company’s benefit. The business strategy of Toyota Motor Corporation is

8MANAGING THE ORGANIZATION
hence regarded as one of the best business strategies in the world, and many other companies in
this industry have tried to adopt some of these strategies for their benefits (Kotler et al. 2015).
The creative talents of the employees are utilized to the full by the managers of Toyota. The
mangers also look for the reduction of waste. This will cut down their operating costs as well
(Eskerod and Jepsen 2016). Apart from that, technology occupies a more significant part of their
corporate strategy.
Source: (Taylor 2014).
The company has always been in creating a huge range of products for its development. Indeed,
this has catered to its product line increase as well. They have shown interest in robotics as well
that has opened a new aspect of technology in front of them (Constantinescu, Mattoo and Ruta
2015). The managers of the organization are very much hard-working, and they always look for
the scopes through which Toyota Motor Corporation can attain the glory by overcoming the
difficulties. The business strategy of the company has made transformations into one of the best

9MANAGING THE ORGANIZATION
global leaders in business. The success level of the company had been achieved previously by
the innovation of ‘Jidoka’ and ‘Just in time production’ (Toyota.com 2019). Since then, the
company has been on track to gain organizational success in its real sense. Jidoka had been
innovated and put to use to identify if there is any defect in the transforming from one machine
to another one. The production of their vehicles goes on, and any defective problem is identified
at that time only. This is definitely one of the best processes that will help the organization in the
future as well (Kotler et al. 2015). The mechanism of Just in time production is about keeping all
the car parts ready whenever it is needed.
The global managers of the company believe that there are high scopes always to
improve the quality of their services. The organizational culture of Toyota Motor Corporation is
also very encouraging and friendly atmosphere works as the key for skill development
(Toyota.com 2019). Here the mangers of the company do not act to be stern bosses. On the
contrary, they are the caretakers of the employees in any difficult situation. The managers of the
company understand that it is not only about launching new products. Instead it is about
launching the products that will be perfect according to the quality as well (Kotler et al. 2018).
They have the confidence that they can produce many types of cars, but they are more interested
in producing more quality cars (Allen 2016). Quality is considered as the most important aspect
for them.

10MANAGING THE ORGANIZATION
Source: (Chang and Lin 2015).
This mentality of producing cars with quality has always helped them to take care of their
total quality management. The culture of the company relies on fixing their problems and focus
on the best quality at the first attempt only (Kotler et al. 2018). The processes of the company are
completely standardized and this has helped them a lot to achieve the overall growth in the recent
years. All these processes have helped the company to build up the stage for their success. This
has also focused on the improvement of their employees and empowering them properly. This
employee empowerment has contributed to establish a proper organizational culture for the
Toyota Motor Corporation. The managers of the company are quite critical of their performance
in this kind of competitive business environment (Kotler et al. 2018). They have always looked
up to the competition as a factor of improving their skills. The capacities of the organization are
developed, and they take care of the situations under challenging times as well. Organizational
learning is also the main focal point of their corporate strategy as well (Eaton et al. 2016). The
company finds out all their discrepancies and root causes for their failures within a short period
and works with their best efforts to control the problems with their reliable power of decision
making.

11MANAGING THE ORGANIZATION
Source: (Denison, Nieminen and Kotrba 2014).
One of the most entertaining parts of their organizational brilliance is their training and
development methods for employees. Technology implementation has always been one of the
strongest points for Toyota Motor Corporation. They provide exceptional quality training to
enhance the capabilities of their employees (Eaton et al. 2016). The managers of the organization
strongly believe that quality employees will always strive hard to build quality products. These
products will be quite beneficial for them to stay ahead of their competitors (Kotler et al. 2018).
As a part of its corporate culture, Toyota is very much focused on hiring the best people for their
needs. The quality development training will enhance their power to deliver the best products for
the company. Continuous improvement of the service process is also a critical part of their
corporate strategy (Král and Králová 2016). The maintenance of workplace ethics is also
embedded in their culture as well. This opens up the scope for the company in engaging with the
proper value creation. This will also increase the potential opportunities for the company to
engage with different types of operations (Zhikang 2017).