Report: Organizational Performance Analysis of Toyota Corporation

This report provides a comprehensive analysis of Toyota Motor Corporation's organizational performance. It begins with an introduction to Toyota, followed by a literature review covering performance management analysis, including employee management, quality, flexibility, dependability, and costs. The report then utilizes a spider diagram and balanced scorecard for assessment. A SWOT analysis is conducted to identify the company's strengths, weaknesses, opportunities, and threats. The methodology section outlines the approach, and a global financial performance analysis is included. The findings highlight key aspects of Toyota's operational strategies, and the report concludes with recommendations for improvement, based on the analysis of the company's strengths, weaknesses, opportunities, and threats, along with the overall global financial performance. The report emphasizes Toyota's market competitiveness and its ability to adapt to customer demands and the external environment.

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Contents
Introduction.................................................................................................................................................3
Overview of Toyota.....................................................................................................................................3
Literature Review........................................................................................................................................4
1. Performance Management Analysis....................................................................................................4
Employee Management......................................................................................................................4
Quality.................................................................................................................................................5
Flexibility.............................................................................................................................................6
Dependability......................................................................................................................................7
Costs....................................................................................................................................................7
2. Spider Diagram....................................................................................................................................8
3. Balanced Scorecard.............................................................................................................................9
4. Benchmarking....................................................................................................................................10
Methodology.............................................................................................................................................10
SWOT Analysis.......................................................................................................................................11
Strengths...........................................................................................................................................11
Weaknesses.......................................................................................................................................11
Opportunities....................................................................................................................................12
Threats...............................................................................................................................................12
Global Financial Performance Analysis..................................................................................................13
Findings.....................................................................................................................................................13
Conclusion.................................................................................................................................................15
Recommendations.....................................................................................................................................16
References.................................................................................................................................................18

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Introduction
This is a report about a study carried out on organizational performance of Toyota Motor
Corporation which happens to be the third best world automotive company after General Motors
and Volkswagen, and the biggest in Japan (Namburu, Kalik and Prokhorov, 2014). It is a leading
retailer throughout the globe, mostly in the United States of America. Toyota Motor Corporation
was founded in 1933. It has gradually evolved into main vehicle production and a business to an
array of industrial groups involved in electronics, machinery, finance as well as other industries.
The corporation boasts a strong capability of technical development thus attaching great
importance to studying its customers’ car demands. The emphasis of this report was based on
identification of strengths, weaknesses, opportunities and threats encountered from the external
environment. It has maintained its market competitiveness by producing different brands of
vehicles at regular basis. This attribute helps them defeat US-European competitors. Brands like
the early Toyota, optical crown, crown, corolla and Cressida lex Texas are quite prestigious. The
headquarters of Toyota is situated at Tokyo, Japan. On an annual basis, it averages an output of
five million and a 50% exports.
Overview of Toyota
Every organization wishes to deliver satisfactory and quality customer services (Mills
and Smith 2011, p.159). This happens only through handling the requirements of the customers
by providing cost effective and dependable services. According to this report, Toyota has
managed to approach and sell goods and services to their clients. The management is driven
towards working on the general performance of the entire organization.

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Literature Review
1. Performance Management Analysis
Strategies for performance and organizational management have helped Toyota integrate
different operational and production activities. This has been achieved through the analysis of
business conduct plan and consistent objectives. The company has introduced strategies to
ensure improved production quality. Through performance management, responsibilities of
different departments are determined and assigned by the staff (Rothaermel 2015). Steps to
performance management have been evaluated as follows:
Employee Management
All staffs of this company are quite important for its business operations success.
Measuring of performance by the management helps in deciding changes to be integrated for
improvement of performance. A realistic target will help the management achieve its objectives.
It follows that employees’ expectations of the company have to be analysed and communicated
accordingly. Staffs in the company need to be motivated thus a higher management performance.
Relevant resources ought to be availed to the staff by the management in adequacy in aid of
improving performance with corrective steps introduction thereof (Walker, Damanpour and
Devece 2010, p.367). For instance, performance-oriented tasks are introduced by the company to
the staffs where the best are performers are rewarded. This enables the management evaluate the
quality of performance. Employees under the development and research departments are to work
towards improving the product as well as introducing new ones to the staff. The management has
to introduce motivational methods so that workers can deliver more. A good pay and recognition
in decision-making can be considered as a motivation.

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Quality
The Toyota Motor Corporation management works towards the improvement of value
chain system thus improving quality of its products and services. The company is determined to
defeat other companies in the market through the aforementioned process, and offer best services
to its clients thereof. Toyota greatly advocates for developing value chain system of management
that would be useful in distribution of goods to its clients (Ringen, Aschehoug, Holtskog and
Ingvaldsen 2014). The company is concerned over reduction of wastes involved. A number of
factors are analysed in this process:
a. Inbound logistics- procurement of raw materials from suppliers is done in
right quantity. These raw materials are reliable and of a high quality. Otherwise, Toyota
would not purchase them. This has been done so as to maintain a consistent level of
competition and a continued provision of best services to their clients. The company
assumes ‘just in time’ method of service provision thus the relationship with the suppliers
is closely monitored.
b. Operations- it is at this level that the technical know-how and the raw
materials needed for operationalization of corresponding activities are assembled for
production. By this process, techniques relating to the upgrade of the car manufacturing
process are included.
c. Outbound logistics- there is a need for manufactured goods to be delivered
to retailers, clients or other parties. This attribute is one among many related to the
management system’s chain of supply. The management is able to effectively improve
the company’s sails and retain its clients in the process.

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The above stages are analysed and corrective measures adopted to initiate necessary
changes. It is by this process that the management can afford effective improvement of sales and
maintain its clients (Sullivan 2010, p.215).
Flexibility
Toyota is among the leading companies in the world that manufacture and sell reliable
and quality products to their clients. The company is majorly known for reliability and quality
characteristic of its products. The management has introduced plans that are more flexible in aid
of promoting market for its sales, and thus improving production activities thereof. This
flexibility offered has been in the form of add-on to facilities, among others. These are the kind
of services attributes demanded by clients with their cost depending upon requirements planed
by them. Operational activities and other government’s adopted strategies are related to
flexibility. These kind of changes are done to ensure that production activities occur without any
interruption (Wilson 2010, p.107). Maximum number of clients can also be served through this
process. The management has organized operational and functional activities in aid of reducing
production costs. The management provides felicity to its clients in order to reduce operational
expenses. Through this process, the management considers procuring goods and services at a
lowered price. Additional savings are relocated to clients as discounts and other benefits.
Flexibility has been adopted in the form of improvement of production and work sourcing to
countries that register low costs. Therefore, the management is able to build reputation and brand
image since the two factors are necessary for successful business operation (Berger and Berger
2011).

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Dependability
Toyota’s management has purposed to offer dependable services to its clients. By this
process, the analysis of clients’ expectations has been carried out. The management is able to
deliver quality services through evaluation of this analysis. Information corresponding to the
preferences and expectations of the clients is gathered and analysed. In return, quick and
dependable services to the clients have been realised (Epstein and Buhovac 2014). The
company’s performance and quality of service proposed for its clients can be affected by a
number of factors. This pushes the management into evaluating and drafting the corresponding
policy that would turn out to improve its service quality to its clients.
Costs
Offering cost effective and quality services to potential buyers would be the best way to
attract clients from different markets. Toyota happens to be one of the top companies that offer
effective services at a quite reasonable low price. The company produces cars that have a
minimum fuel consumption thus saving fuel for its clients (Marksberry 2012). This is considered
to be a positivity by which the management could even attract more clients from diverse markets.
The management considers a number of things so as to reduce its operational costs; evaluate the
costs imposed by their opponents in service delivery, advance their production activities’ quality,
offer flexible services to their customers like choice and discounts, and monitor the quality
exhibited by the products they produce.
The aforementioned factors enable the company attract more clients and offer worthy
services. So far, the company has assembled hybrid cars that are quite effective as they consume
less fuel. This stands out to be one of the reason that Toyota’s sales are constantly rising
compared to rival groups. The management also embraces and implements relevant financial
goals through which better options could be provided to clients and staffs of the company

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(Chiarini 2012). The staffs are fortified to improve sales and gratify the clients in a good way.
The management provides incentives thereof so as to motivate the staff. Introduction of cost
saving methods, in regard to purchase of technical know-how, raw materials and manufacturing
unit, happens to be one of the financial goals. Sales is also another financial goal set by the
company. Therefore, the management is able to encourage the staffs into direct sales process thus
execution of reliable and quick services to clients.
2. Spider Diagram
Spider diagram includes the arrangement of data logically for better interpretation and
understanding (Ringen, Aschehoug, Holtskog and Ingvaldsen 2014). The spider diagram helps
the company in coming up with a new business idea by creating a link between many ideas. It
also helps in analysing the data and making conclusions thus an effective strategy devising in the
company.

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3. Balanced Scorecard
The balanced scorecard aids the organization in strategic management whereby the organization
is able to assess its current performance and recognise areas that need improvement (Chiarini
2012). The above scorecard considers financial perspective, customer perspective, internal
perspective and learning & growth perspective. Moreover, the organization is able to focus on
various operational aspects. However, this format only considers the internal factors and
disregards external factors thereof. This would be detrimental to the company as it may lead to a
decline in its service quality, brand image, and thus business failure.

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4. Benchmarking
Benchmarking allows for comparison of the organization’s performance with other organizations
in different industries of their operations (Rothaermel 2015). The company is able to relate itself
to the achievements of others whereby hence the ability to identify areas of improvement or
rectification. This process is aimed at high service and product delivery to the customers of the
company thus general enhancement of value for the company.

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Methodology
This study considered a SWOT analysis adopted by Toyota, as well as its financial records of its
operations. In addressing internal and external strategic factors of its business operations, Toyota
Motor Corporation adopts a SWOT analysis which pinpoints significant opportunities,
weaknesses and threats that need to be palliated through its strengths. The high performance of
Toyota reflects its capability to attend to issues highlighted by the following SWOT analysis:
SWOT Analysis
Strengths
The strengths exhibited by Toyota reflects the ability of the company to maintain its
position among top global auto manufacturers. This element identifies its internal strategic
factors that reflect the proficiencies of the firm. Its main strengths include: global chain of
supply, strong brand image and rapid innovative capabilities. Toyota boasts one of the strongest
brands in the world industry for automotive (Nkomo 2013). Its global chain of supply enables
resilience and minimization of market-based risks. Moreover, Toyota possess an organizational
factor that aids rapid innovation necessary for long-term advantage of its competitiveness. All in
all, the strengths possessed by Toyota supports its rank as one of the chief manufacturers of
automobile globally.
Weaknesses
The weaknesses of Toyota mirror possible organizational inefficiencies. This element
establishes the internal strategic factors that hinder business growth in the company. The main
weaknesses exhibited include: secrecy in organizational culture, hierarchy in organizational
structure and effects of recalls of products in recent years (Jayaram, Das and Nicolae 2010,
p.284). Maximum flexibility of regional manoeuvres is hindered by its global hierarchical
operational structure. The culture of secrecy exhibited by the company shows a weakness

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responsible for reduction of timely responses in addressing incipient problems. Moreover,
implementation of massive product recalls dates back to 2009. These recalls are accountable for
weakening the organization as recall processes the organizational capability which would have
been otherwise used for product distribution. This element of SWOT analysis portrays a
possibility of performance improvement through necessary adjustments to mitigate the weakness
in regard to its organizational culture and structure.
Opportunities
Opportunities of Toyota are mainly in regard to economic and technological trends. This
component entailed in SWOT analysis model ascertains the external strategic factors that could
be used by the firm to improve its business operation. Opportunities available to Toyota are as
follows: rising demand for automobiles which are fuel-efficient, growing markets for its products
in developing countries, weak value of Japanese Yen in comparison to United States of
America’s Dollar, and a growing interest in advanced electronics in vehicles (Monden 2011).
Through penetration of developing markets, Toyota is awarded an opportunity to increase its
revenue. Moreover, increasing interest and demand trends for advanced electronics and higher
fuel efficiency presents an opportunity for Toyota to adopt these directives in its innovation. A
weaker value of Japanese Yen in comparison to United States of America’s Dollar presents a
higher competitiveness of components and products exported from Japan to the United States of
America. This attribute of the SWOT analysis shows a need for Toyota to emphasize on
innovation and market penetration so as to fully exploit its opportunities.