Unit 4: Management & Operations Report - Toyota Case Study Analysis

This report provides a comprehensive analysis of Toyota's management and operations, examining its organizational structure, the roles of managers and leaders, and the differences between management and leadership. The report delves into various leadership and management theories, including Fayol's classical theory, McGregor's behavioral theory, and system theory, evaluating their strengths and weaknesses in the context of Toyota. It also explores situational leadership and contingency approaches. Furthermore, the report discusses key approaches to operational management and evaluates the impact of external business environment factors on decision-making within the company. The report utilizes Toyota as a case study to illustrate the practical application of these concepts, aiming to provide a clear understanding of how management and leadership principles are applied in a real-world business environment.

Unit 4
Management & Operations

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Definition and role of manager and leaders and also difference between management and
leadership................................................................................................................................1
P2 The different roles of management and leadership in application to different organisational
situations, supported by theories and concepts.......................................................................3
P3. Strengths and weakness of different approaches to leadership and management............5
TASK 2............................................................................................................................................8
P4 Key approaches of operation management.......................................................................8
P5 Importance to operations management and their value.....................................................9
P6. Evaluate the impact of external business environment factor that affect the decision
making of managers and leaders..........................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCE...................................................................................................................................1

INTRODUCTION
Management is defined as an administration of an organisation which is related to the
functions of controlling, planning and organising. Operation is an organizational activity which
is included people work in different ways (Briggs, 2018). Report will be based on “Toyota”
which is a Japanese car manufacturing company. It was founded by Kiichiro Toyoda in 1937 and
is headquarter in Toyota city, Aichi, Japan. Study will discuss about management structure, role
of managers, differences between management and leadership of Toyota. Report discusses
strength and weaknesses of leadership and management. It will cover key operations and
approaches to operational management and impact of external factors affect the decision making
of leaders and manager of firm.
TASK 1
P1 Definition and role of manager and leaders and also difference between management and
leadership.
Introduction to the organisation and its management structure.
Report discuses about the Toyota company. It is a Japanese multinational automotive
company which is founded by Kiichiro Toyoda in 1937. Presently, 364,445 employees work
with the company. Its produces more than 10 million vehicles per year therefore they become
world’s first automotive manufacturer in 2012. It is one of the largest companies which is
encouraged the mass market adoption of vehicles in all over globe. Its yearly revenue 265 billion
in 2018. Its produce first product an engine then its first car launched in 1936. That time, its
Model AA then due to competition they invent new logo for its new product. It's also changed
their name “Toyota” from “Toyoda”. Toyota introduced a new logo in 1989 to celebrate the 50
year of the company. New logo started appearing on advertisement, vehicles etc. in 1990.
Management structure of Toyota
1

Management structure describes the management hierarchy in a company. Toyota
management follows the Divisional structure. Divisional structure describes organisational
functions in the organization. Each division complete the set of functions and its useful for the
Toyota marketing, products line and many regions (Chen, 2016). Divisional structure beneficial
for the Toyota because multi division structure use of the brand of the parent company which is
beneficial for the Toyota. Through divisional structure Toyota maintain their accountability
whereby it much easier for action and result. Through this structure, Toyota yield response fast
to market condition according to specific division. Product based division support to develop
company brands and through the global hierarchy Toyota has increased decision making power.
Manager
Definition: A manager define as a person who manage the all process which is related to the
employees such as recruitment, employees, polices, regulations, controlling, assigning job roles,
etc. They help to achieve company goal through their work.
Characteristic's:
Managers can lack communication ability. They only interact with their subordinates
when it is necessary. They guide employee's and make goals and objectives clear to them.
2
Illustration 1: Divisional structure
(Sources: Organisation structure, 2012).

Functions:
It is the responsibility of manager to Creates and controls change within the organization
solving problems, generating new ideas, and implementing them and takes decision according to
them (Fayol, 2016). Managers delegate the responsibility to employees to complete a task.
Leader
Definition: A leader define as a person who influences the all other employee's (Fayol, 2016).
Leader has an ability to handle the team work and provide guidance to their employee's.
Characteristic's:
Leaders have a characteristic of effective communication. They identify the audience and
their characteristics and interests, then adjust their communication style based on what the
audience needs and wants. They support workers in building their morale by making them work
toward achievement of common goal.
Functions:
It is responsibility of Leaders to takes decision according to the demands of employees.
They motivate workers to perform better. They enhance the motivation of workers by praising
them or providing them emotional support.
P2 The different roles of management and leadership in application to different organisational
situations, supported by theories and concepts.
Leader and manager have different roles and functions at different conditions within the
organization. They play a significant role in Toyota. There are some situations in the business
they can happen in business that is as follows:
Labour turnover situation: Labour turnover is always a point of concern for managers and
leaders. That can be measured by the percentage rate of turnover rate. Fluctuation in employee’s
turnover is duo to dissatisfaction with the policies, working environment, facilitates and others.
When employees are dissatisfied by the company then they decide to leave from their and want
to go another place for working. In that case role of Toyota's leader is motivate the employees
and make good relations with employee. While role of manager is providing proper staff and
resources for work (Chen, 2016). Also, to develop their professional and work capacity by
3

providing effective and right training section. Leader is responsible to motivate the staff and
creates positive workplace culture so that people like to stay in the firm for longer duration.
Conflict situation: Positive work environment is important at Toyota. That simply means is
positive working environment of the company, where employees feel valued and enjoy the work
otherwise it would create conflict at workpalce.. That is happened by location, culture, growth
opportunity and interaction between the other employees. In this case leader of Toyota can make
positive work environment by motivation, effective feedback, positive reinforcement,
appreciation. While managers are responsible for setting goals for employees. Organize training
to understanding the duties and responsibilities, developing staff, give benefits and
compensations, health and safety policies for employees. These help to employees to engage
them towards creating positive work environment. On other hand leaders are responsible to
develop healthy communication and develop strong bonding between employees so that such
type of issues can be resolved soon.
Theories of leadership and management
Henri fayol's classical theory:
It is the management based theory which is help to achieve growth of Toyota by
supporting basic five principles of this theory. That are as follows:
Planning: it is the most important part of the organization. To make effective planning of using
resources in the company.
Organising: that includes the organising the resources which are uses by the company. To
develop its production and productivity.
Controlling: controlling on human resources and any other resources which are related to
production process. By that Toyota helpful managing labour turnover at any situation.
Coordinating: coordinate with their team members which are helpful effective working result
and for the making control on labour turnover.
Commanding: command is most important part of the organisation. That give positive effect on
the resource's utilization.
Basically this theory helps for effective planning, organising, controlling, coordinating and
commanding of labour.
McGregor's behavioural theory:
4

This theory depends on the views and perception of employees. This theory indicates the
two different aspects which are theory x and theory y.
Theory x: this theory refers the negative behaviour of employees which is affect to the growth of
company. According to this Toyota assumes that their employees are lazy and avoid roles of
jobs. In that case management have to pay proper motivation and satisfaction to their employees
for growth of company b y giving positive work environment at workplace.
Theory Y: this theory refer the positive behaviour of employees which is good for the company
growth. According to this management of Toyota assumes that employees are self motivated and
give their hard contribution to achieve goal of company. That employees create positive work
environment by itself in the company.
System theory of management:
This theory refers that organization prefers different management theory according to the
system of the Toyota. This theory when applied it help to managers and leaders to look the work
environment within the organization. System theory support to make effective and positive work
environment in the organisation. Positive work environment help to maintain the discipline,
follow the schedule of daily work task. Proper system of organisation help improve productivity
of work performance. In Toyota, system approach of leadership developing high performance
organisation which is an appropriate and achievable goal in today's business environment. In
order to perform and adapt greater extent, high performance organisation deliver greater
satisfaction and maximum long term value for stakeholders. It is comprehensive approach for
sustainable leadership and organisation development that designed to overcome different issues
and problems.
P3. Strengths and weakness of different approaches to leadership and management.
Situational leadership theory: This model given by the Hersey Blanchaed's leadership theory.
This theory refers that manager and management prefer different leadership style according to
the situations and conditions (Situational approach, 2017). It is effective way of leadership
because it adapts to team needs and set beneficial balance for the whole organization. According
to this theory, leaders of Toyota have understood the needs of followers, gain trust and
confidence of followers and they have able to make changes according to the situations and
conditions.
5

Situational approach of leadership contain basic premise which assists to handle different
situations demand in different types of leadership. In Toyota, this leadership consider set of
values and attitudes in which individual or group deal in process of activity which planned and
results appreciated.
 Strength: Structure of interpersonal relationship develop successfully within the group.
Characteristic of the group develop as a whole. Physical constraints ascertained on the
group performances.
 Weaknesses: However, situational approach has been refined and revised several times
since inception has been used extensively. Therefore, organisational leadership training
and development program successfully managed.
System approach: It is used to evaluate the market elements which is affects the organisational
profitability.
Strength: It has the strengths that to solve internal problems and expand opportunities. Due to
open system, its interaction with the environment. Through the system approach, management of
Toyota can easily adapt the changing environment whereby management can perform effectively
manner .
6
Illustration 2: Stiuational leadership theory
Source: Situational approach, 2017

Weakness: it cannot apply on practical problems therefore it does not provide tools and
techniques. It defines each component and subsystems so, it's a very time-consuming approach.
Contingency approach: This approach significant difference in different situations. It’s
very reliable approach to explain that how effective leadership can be achieved. This theory
impact of leader situations and focuses the relationship between leaders’ style. This theory of
leadership states that leader's effectiveness is contingent upon with his and her leadership style
matches to the particular situation. Hence, leader of Toyota need to be effective as a particular
group situations. Hence, this theory stated that effectiveness successfully develop to ascertained
desired results.
Strength: It makes leaders effective in all the situations. According to this theory, Toyota can
easily make modifications and improvement of the situation which make conductive for the
leader to operate and get effective results.
Weakness: it does not explain that an organisation how to use the result of this theory. It also
weak at dealing with multiple contingency factor. This theory only focusses on the situations not
on resources. This theory majorly consider UN-favourable situation that create negative impact
on the results and outcomes.
Behavioural approaches: This theory helps to leader to maintain balance for the task
and leaders can observe people behaviour with the help of this theory. Provide training in the
ideal styles possible in this theory. It uses scientific methods of research.
Strength: It does not require direct communication between workers and leaders.
Weakness: It also has weaknesses like it's a one-dimensional approach to understand that human
behaviour. Through this theory leader learn the behaviour but it does not mean that this theory
acts the properly.
Managers and leaders have made an impact on the organisation and
recommendations for future improvement.
Managers and leaders help their team members to enhance their skills whereby employee
gain the confidence and do their work effectively. They set objectives and motivate employees
then provide training for develop the skills whereby company easily achieve their target through
7

the skilled employees. They also help to increase the productivity because effective work of team
members is beneficial for the Toyota (Ansoff And et.al., 2019).
If manager and leader does not lead in proper way so, its direct impacts on team members
works. They both monitor of the employee work whereby they can help to improve the mistakes.
Leader and manager establish the objectives in front of employees and then helps to gain
company's goals and objective through the guidance. It can say that Toyota productivity and
profit depends on managers and leaders work.
Recommendations for future improvements.
In order to improve the operational efficiency of Toyota, managers and leaders can
engage in providing effective training to the employees. They can also provide them with better
incentives and bonus so that worker's motivation can be increased, and it will help the firm in
reducing the employee's turnover.
They should involve the employees in decision making process and meetings. For this
way, employees feel satisfaction which can help in effective work. Due to Employees
involvement, manager and leaders can get the new ideas and suggestions. It also good for the
company.
TASK 2
P4 Key approaches of operation management
Six sigma
Six sigmas create most value for the organisation as this method helps in improving the
business processes. It creates value by satisfying the consumer and reducing the cost. The most
effective approach is six sigmas. This is a quality control methodology. The method uses a data
driven review to limit mistakes or defects and process of Toyota (Shiffman and et.al., 2018). Six
sigma emphasizes cycle time improvement while the same time reducing the manufacturing
defects to a level. In other words, the system is a method to work fast with lass mistakes at
workplace. This represent the population standard deviation, which is a measure of variation in a
data. By this Toyota can also be thought as a measure of process performance, with Six sigma
being the goal. This can help to company improvement of their productivity. They can achieve
their goal and analysis their performance.
8

Total quality management:
Total quality management is an extensive ans structured organization management
approach. That will forces on quality of product and services by using continuous feedback. It is
help to Toyota to maintain their quality of product at the time of production and as well as the
managing the goods and services. That theory focus on the customer because they want effective
and good quality of product. That theory help to taking effective and best decisions for the
utilization of resources in the company. By this theory management is able to communicate to
their employees for quality maintain. At the end it is properly based on quality of goods and
services. This help Toyota to maintain its quality of product and productivity at the marketplace.
Lean manufacturing:
This theory is depends upon maintain the usage of quality and resource in the Toyota.
That theory help to Toyota for control on wastage of goods and resources. That process help to
eliminate the waste from their manufacturing process. It is related to manufacturing process of
goods and services in Toyota. It is best and good for maintaining the resources of goods and
services.
Role of leaders and managers
It is duty of leader that to ensure these operational approaches get implemented in
effective manner. Leaders motivate the employees to perform their work effectively. Here
managers play the role of trainer and supervisor. Individual gives necessary training to staff so
that they can work as per guidelines and an contribute well in accomplishing goal of business
unit.
P5 Importance to operations management and their value
Operation management involve certain responsibility. One responsibility is ensuring the
business operates efficiently both in terms of using the least amount of resources and maintaining
quality which are required for meeting customers requirement to the highest standard viable.
This includes the raw materials, labour and energy are converted into the good and services.
Employee’s skills and creativity and knowledge are all important for the success in operation
management.
9

Toyota operation management covers decisions for effective and efficient operations.
Toyota use wide set of strategies for take decisions of operations management, integrating local
and regional automotive market condition (Key operational function, 2017). Key operations are
required to perform various function as a part of their job responsibilities. Manager can design
the effective design of their goods and services. They responsible for their quality of goods they
are using. Managers have to ensure about the quality of goods. Toyota manger make location
strategy for establishing the company before design the layout and strategies. Hr manager can
use recruitment and selection process for fill vacant posts in the organization. Quality
management in production, make strategies for layout design and make effective supply chain
management in logistics are key operational functions of Toyota. These indicate the different
area of the business that require strategic approaches.
Fayol’s have described five major functions of management.
Planning: Managers of the Toyota has to plan properly before implementing any approach.
Individual is responsible to make correct plan so that operational efficiency can be improved.
Organising: This is another function of managers of the company as individual has to organise
all activities in systematic manner so that final output can be according to the expectations.
Individual has to ensure availability of raw material and their effective utilisation so that overall
quality of goods can be improved.
Commanding: This is another responsibility of management of Toyota, as individual has to
command over each employee so that operational mistakes can be minimised.
Coordinating: This is another function of management in which person hast to develop effective
coordination among all workers so that they discuss their problems and enjoys their workplace.
This develops healthy workplace culture that aids in rising operational effectively.
Controlling: This is another function perform by management of Toyota in which manages have
to control over each activity so that Toyota can manufacture high quality cars at minimum cost.
The key operational functions, identifying the roles and responsibilities of managers in
the key operational functions
Toyota approaches for the strategic decisions of operations management and show the
important role of manager in key operations.
Design of goods and services:
10