Strategic Management Practices at Toyota: A Comprehensive Analysis

This report provides a comprehensive analysis of Toyota's strategic management practices. It begins with an introduction to Toyota's history and its leading position in the automobile industry, emphasizing the role of strategic management in its growth. The report then delves into the concept of strat...Read More

Running head: MANAGEMENT THEORY AND PRACTICES
Management Theory and Practices
Name if the Student
Name of the University
Author Note

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Table of Contents
Introduction:...............................................................................................................................3
Analysis:.................................................................................................................................3
Concept of Strategic Management:........................................................................................3
Step One:................................................................................................................................4
Step Two:...............................................................................................................................4
Step Three:.............................................................................................................................4
Implementation of Strategic Management in Toyota:...........................................................5
Recommendations:.................................................................................................................7
Conclusion:................................................................................................................................7
Reference:..................................................................................................................................8

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Introduction:
Toyota is one of the leading business organizations in the automobile industry. Toyota
has been started its journey in 1937 in the industry. Soon it has secured the leading position in
the industry by its innovative and unique practices. The organization has witnessed rapid
growth since past few years, which reflects the innovative strategic management quality of
the Toyota authority. Being one of the oldest and renowned business organizations, Toyota
has put significant impact on the business world. It is not easy to maintain coordination with
the different parts of world. Thus, the leaders play a crucial role to manage the organizational
service (toyota-global.com, 2017).
The following report has articulated on the Toyota’s organizational management that
influences the growth of the organization.
Analysis:
Strategic management plays crucial role in earning desired success for every business
organization. In this competitive era, where every business organization is incorporating
modern and effective techniques to stimulate the growth of the organization, strategic
management is known as the primary success factor for the organization, as it is impossible to
run any business organization without efficient management (Jenkins & Williamson, 2015).
Concept of Strategic Management:
It has been argued that strategic management is mainly based on three key stages that
help the business organization to earn success to some extent, such as- formulation of
strategy, implementation of those strategy and strategy evaluation (Percy & Elliott, 2016).

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Step One:
Strategy formulation is the primary stage that plays important role in the growth of the
organization. In this stage, organizational management, designs organizational strategies and
policies after analysing various aspects of the organization.
Step Two:
The next stage is implementation of the strategy. In this stage, management and other
members of the organization implement the designed strategy in the organizational structure.
The organizational management must ensure that all the internal stakeholders of the
organization are flexible enough to accept it. Otherwise, it will not be easy for the authority to
implement the strategy. In order to influence the internal and external stakeholders to adopt
the strategies, the management must provide a transparent idea about the objective of the
leaders to incorporate these strategies (Ruff, 2015).
Step Three:
The last stage of strategic management is to evaluate the result of the strategies. This
stage helps the management to avoid many future risks. By evaluating the result of the
strategies, the leaders of the organization can understand whether the employees have
accepted the strategy or not. At the same time, they will be able to monitor whether the
strategy is working properly or not. They can identify the loopholes as well and rectify it.
This will be beneficial for the organization to earn the long-term organizational goal.
Michael Porter has enlightened three key aspects of strategic management that needs
creating unique and innovative strategies, managing the quality of the product and adopt
suitable strategies to fit in the market trend. This theory plays significant part in the growth of
the business organization, as it helps the organization to shape their organizational structure

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according to the market trend. It helps the organization to carry out any new business venture
in an appropriate manner (Smith, 2014).
It has been claimed in reports that strategic management involves the evaluation of
external and internal atmosphere of the business company (Rothaermel, 2015). While
constructing the strategies of the organization, it is important for the business authority to
analyse external and internal environment of the company as it puts significant impact on the
performance of the business organization. The structure of the business environment has been
transformed drastically in past few decades due to the arrival of several rival organization and
globalization. The competitive environment of the market has been enhanced. Hence, in order
to put a strong impact on the market, it is essential for the organizational leaders to
understand the key features of the market and the requirement and preference of the clients.
Otherwise, it may face various difficulties to survive in the competition.
Implementation of Strategic Management in Toyota:
Toyota management has followed all the path of the strategic management while
designing their organizational structure. Toyota is mainly run by a team of experienced and
skilled leaders who aim at embracing innovative techniques to provide quality and flawless
service to the consumers. Their primary objective is to meet the expectation level of the target
market. In order to achieve the target, they incorporate all kind of modern and innovative
strategies that will be suitable for the organizational growth. There are some key aspects of
the organizational structure of Toyota that can be described to provide a vivid idea about the
strategic management of Toyota authority (Peppers & Rogers, 2016):
Toyota management always maintains healthy relation with all the suppliers,
distributors and other participants of the supply chain. Being a world famous business

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organization, Toyota maintains a strong and transparent supply chain. It is one of the major
success factors of the organization (Stead & Stead, 2013).
Toyota is known for carrying out innovative business venture. In 1970, Toyota has
brought revolution in the automobile industry by starting the production of fuel-efficient
small car. Recently it has started the manufacture of electric car, which is beneficial to get rid
of air pollution and global warming (Morden, 2016).
The organizational leaders of Toyota always maintain a healthy relation with the
external and internal stakeholders. At the same time, they maintain culture and value within
the organization. It has been evident in many incidents that organization has stood by the side
of his employees and provided all kind of monetary and moral support to them, as they are
aware of the fact that employees are the potential strengths of the business organization. The
growth of the organization is mainly relied on the performance of the employees. Unique,
teamwork and respect these are the basic features of the Toyota organization. These are the
major weapons of the organization that plays major role in establishing bright future of the
organization.
Lean management is another result of innovative initiative of Toyota management.
They always encourage their employees to actively participate in the organizational function
and improve their performance quality.
Toyota is operated and managed by the some basic principles that are considered as
the strength of the organization, such as- management must be aware of long-term goal of
the organization, every problems needs to be addressed and resolved immediately, innovative
and trustworthy techniques needs to be embraced always, management needs to consider all
the aspects of the organization while designing the organizational structure (Kaynak, Mockler
& Dologite, 2014).

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As per the discussion, it can be stated that the style of management of the Toyota
authority is highly influenced by the previous mentioned theory and concepts. These concepts
have led the authority to operate the organizational function in an appropriate manner.
Recommendations:
Although, the organizational infrastructure of Toyota has been constructed in a
innovative and lucrative manner, there are some loopholes that can be harmful for the brand
image of Toyota. To avoid these factors it can be recommended-
The organizational management must be aware of their responsibilities and they must
not blame their employees for any kind of loss. It is evident in many cases.
It has been evident recently, Toyota has experienced various challenges due to the
inefficient performance of the crisis management team. Leaders need to appoint some skilled
employees who can support the growth of the organization by their effective performance.
The organizational management must appoint some skilled engineers who can
serve the organization by their experience and practices, as it is evident recently Toyota has
faced massive crisis due to the poor product quality and manufacturing fault.
Conclusion:
Thus, it can conclude that Toyota has set a milestone for others by following all the
aspects of effective strategic management. To avoid other loopholes in the organizational
structure, it needs to appoint skilled staff members and shares organizational objective with
them and motivates them to perform in an appropriate manner.

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Reference:
Jenkins, W., & Williamson, D. (2015). Strategic management and business analysis.
Routledge.
Kaynak, E., Mockler, R., & Dologite, D. G. (2014). Multinational strategic management: an
integrative entrepreneurial context-specific process. Routledge.
Morden, T. (2016). Principles of strategic management. Routledge.
Peppers, D., & Rogers, M. (2016). Managing Customer Experience and Relationships: A
Strategic Framework. John Wiley & Sons.
Percy, L., & Elliott, R. H. (2016). Strategic advertising management. Oxford University
Press.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Ruff, F. (2015). The advanced role of corporate foresight in innovation and strategic
management—Reflections on practical experiences from the automotive
industry. Technological Forecasting and Social Change, 101, 37-48.
Smith, W. K. (2014). Dynamic decision making: A model of senior leaders managing
strategic paradoxes. Academy of Management Journal, 57(6), 1592-1623.
Stead, J. G., & Stead, W. E. (2013). Sustainable strategic management. ME Sharpe.
toyota-global.com. (2017). toyota-global.com. Retrieved 21 August 2017, from
http://www.toyota-global.com

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