Toyota Motor Corporation: Managing Innovation in Business

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MANAGING INNOVATION IN
BUSINESS: TOYOTA MOTOR
COROPRATION
Student Name:
Student ID:
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Executive Summary
The prime purpose for this specific resource is to make the identification of the main drivers of
innovation in automotive industry. This report is carried out to build the innovation road map
along with that this helps to get a knowledge regarding Toyota’s plan and implement innovations
around all levels in the organization. The report is beneficial as this assist to understand the
innovation requirements of the company. Toyota automotive company seems to operate through
the usage of several resources including physical resources, financial resources, human resources
as well as intellectual capabilities. In terms of physical resources, 67 plants as well as
manufacturing companies all around the world are possessed by Toyota and have a vehicle
production of 8,964.33. Toyota in order to sustain in the highly competitive automotive industry
needs to continue investing in Research and Development for maintaining its unique strategic
competence. This will further enable the automotive company in increasing its competitive
advantage through the creation of confidence as well as trust among its consumers. Besides, it
needs to provide its customers with products and services of superior quality being
environmentally aware. Moreover, the automotive company needs to enhance its business in
developed countries through considering the needs of the market.
Toyota, as a multinational company has put immense effort and focus in establishing a proper
organizational culture in the company. This improves the company’s overall growth and utility in
the vast market of globalization in the automobile industry. Toyota in the vast industry of
automotive industry has possible areas of improvement regarding its organizational structure and
improvement in areas of implementing possible change agents in the company. The strategic
areas are implemented with innovation in the company in order to retain employee growth and
motivation. It is significant for the company to focus on its knowledge transfer and deduce new
ways of conveying their knowledge so that their information is secured and less emphasized for
other brands to utilize. The complexity of Toyota’s knowledge transfer method has to overcome
with greater areas of influence and power over other foreign industries.
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Table of Contents
Introduction......................................................................................................................................4
Future of the industry 2020 and beyond..........................................................................................4
The Organization Innovation Requirements....................................................................................6
Building future innovations capabilities for the organization.........................................................7
Engagement with the stakeholders..............................................................................................7
Knowledge Transfer, Knowledge Management..........................................................................7
Change Management Issues and Strategies for Overcoming Resistance to Change...................8
Organizational Culture, Climate, Leadership and Culture..........................................................9
Conclusion.....................................................................................................................................10
.
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Introduction
The prime aim for this ongoing resource is to classify the main drivers of innovation in
automotive industry. This report is carried out to build the innovation road map along with that
this helps to get a knowledge regarding Toyota’s plan and implement innovations around all
levels in the organization. The report is developed to show a brief outline of the course work 1.
From the course work 1, this can be said that this provide a brief over view of the automotive
industry along with Toyota. Moreover, this includes the innovation history of innovation as well.
From the course work 1, this is found that Toyota applied both the incremental and radical
innovation planning for their process and products. Bargaining strength of customers and
Competitive Rivalry in the Industry is high for Toyota and this can be found from the course
work 1. This reveals also that Toyota is popular because of its durable, reliable consumer service
along with quality of product. However, recalls of product because of faulty airbags during the
time span of year 2009 to 2010, decrease the reputation of Toyota’s brand image. In addition,
this is found from the course work 1 that there are 67 plants along with manufacturing companies
of Toyota in all over the world. This report will help to know about the future of the industry in
the year 2020 and beyond that as well. In addition, it assists to build the future capabilities of
innovation for the organization.
Future of the industry 2020 and beyond
In the year of 2017, the sale of passenger cars globally has been seen to hit 78.6 million vehicles.
In terms of sales as well as production, the United States and China have been seen to have the
largest automotive market. Fodor Motor Company is known to be the largest manufacturer in
terms of passenger cars. However, Toyota, Volkswagen as well as Daimler are referred to as the
leading manufacturers of automobile globally in terms of revenue. Currently, the industry within
which, Toyota operates is highly competitive as well as demanding. Customers preferences have
been seen to have changed towards efficient and small vehicles due to fluctuating fuel prices
along with increasing environmental concerns. Toyota automotive company seems to operate
through the usage of several resources including physical resources, financial resources, human
resources as well as intellectual capabilities. In terms of physical resources, 67 plants as well as
manufacturing companies all around the world are possessed by Toyota and have a vehicle
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production of 8,964.33. Toyota has taken resort to make improvements in its machines for
increasing the resources’ usefulness. In terms of financial resources, the net revenue is known to
be 29,379.5 billion of yen In context of human resources, it can be said that 369,124 employees
work under the automotive company. Lastly, in terms of intellectual capital, Toyota is seen to be
engaging in active research as well as development for the identification of needs of the diverse
and advanced market. The automotive company is seen to be engaged in research and
development actively for providing customers with appealing high quality products at affordable
prices (Kodama, 2017). Toyota is known to be manufacturing highly innovative vehicles with
huge investments. Besides, Toyota has taken resort to invest heavily for the production of eco-
friendly vehicle technologies, vehicle safety as well as information technologies. Toyota has
been able to occupy a favorable position in the automotive industry due to producing reliable as
well as durable products along with innovation and customer service (toyota-europe.com. 2019).
However, one of the primary reasons behind its weakening brand image is its faulty airbags.
Toyota along with some of its competitors has taken resort to the incorporation of these changed
preferences in order to diversify its portfolio and manufacture hybrid vehicles.
Several companies have been seen to move their production facilities for operational costs and
low labour. The emerging economies are expected to grow continuously, which will result in
increasing revenue and sold cars (Isac, 2019). With technological advancements including
robotics, Internet of Things (IoT), artificial intelligence, automotive industry needs to strategize
effectively to incorporate upgraded technologies in order to sustain them. There will be
technological advancement, which will lead to the replacement of the workplace (Brondoni,
2015).
Toyota in order to sustain in the highly competitive automotive industry needs to continue
investing in Research and Development for maintaining its unique strategic competence. This
will further enable the automotive company in increasing its competitive advantage through the
creation of confidence as well as trust among its consumers. Besides, it needs to provide its
customers with products and services of superior quality being environmentally aware.
Moreover, the automotive company needs to enhance its business in developed countries through
considering the needs of the market.
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The Organization Innovation Requirements
All development phases are coordinated and integrated by Toyota, which encompass basic
research along with product development as well as technological development for the
production of appealing vehicles of superior quality. The automotive company takes resort to
basic research in order to conduct research into technology related to vehicle (Soviar et al.,
2019). Besides, Toyota takes resort to forward looking technological development in order to
develop leading edge components in order to remain ahead of its competitors. Moreover, it
conducts effective research for product development (Zeng et al., 2015).
Toyota possesses a powerful resource known as Innovation.
Strategic Capabilities: Toyota has manufactured different cars through the implementation of
Toyota New Global Architecture. The automotive company is able to introduce new models
through incorporating Toyota New Global Architecture. The automotive company needs to
reinvest its resources for the enhancement of its product quality. It needs to accelerate virtuous
vehicle for the delivery of better cars.
The strategic capability, which Toyota needs to incorporate, is the robust chain. Toyota needs to
work with its suppliers. It needs to have interdependency existing between production roles,
R&D as well as marketing, which will be helpful in having financial marketing as well as
technical information. It is highly essential for the automotive company to manufacture
innovative cars with environmental consideration.
In terms of financial resources, the net revenue is known to be 29,379.5 billion of yen. In context
of human resources, it can be said that 369,124 employees work under the automotive company.
Lastly, in terms of intellectual capital, Toyota is seen to be engaging in active research as well as
development for the identification of needs of the diverse and advanced market. Toyota needs to
invest in its intellectual capital for conducting Research and Development. One of the primary
reasons behind its weakening brand image is its faulty airbags. This implies that Toyota should
invest in its financial resources in order to deliver quality products.
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Building future innovations capabilities for the organization
Engagement with the stakeholders
Toyota needs to be involved with various stakeholders such as research organizations,
universities, suppliers, trade unions, consumers and consultants (Betancourt et al., 2018). There
are several benefits of engaging with stakeholders and all of these can be possible to obtain for
Toyota. Moreover, these benefits can be helpful as this assists to increase the innovation
capabilities of the organization as well. Stakeholders help to develop the business experience,
which can be very useful to develop the innovation capabilities. Stakeholders aid a business
owner anticipates things, which can be gone wrong (Tidd and Bessant, 2018). This can be very
effective as this helps to develop and increase Toyota’s innovation capabilities. Stakeholders
often come from the different background along with level of experiences. Moreover, this aids
them to overview a bigger picture, which a business owner cannot see. This value of stakeholder
can be divided partly experience of business and relationships of business.
Along with the benefits, there are few disadvantages of stakeholder engagement as well and
these can be proved as very harmful for Toyota’s innovation capabilities (Kale, 2017). In this
regard, this can be seen that representing own interest is one of the disadvantage of stakeholder
engagement. Moreover, this can be revealed that progress of block can be defined as very
frequent during the time; business actions will harm their interests (Amasaka, 2016). Moreover,
it can be revealed that these disadvantages are very harmful and decrease the organizational
innovation capabilities of Toyota.
Knowledge Transfer, Knowledge Management
The knowledge base of a multinational corporation is one of its main assets that involve a huge
competitive advantage for the brand. The transfer of the inherent knowledge of the brand is a
significant procedure to its foreign locations to gain vast recognition and improved brand image
(Hasnain, Jasimuddin, and Fuller-Love, 2016). The inherent quality of the transfer knowledge
from the domestic company is equally complicated to relocate to foreign brands but the integrity
of Toyota lies in it. Therefore, it is evident for the brand to put focus on its knowledge transfer
and deduce new ways of conveying their knowledge so that their information is secured and less
emphasized for other brands to utilize. The complexity of Toyota’s knowledge transfer method
has to overcome with greater areas of influence and power over other foreign industries.
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According to Hill (2017), the future prospects for Toyota in upgrading their methods of
knowledge transfer have to do a lot with the internal leadership possibilities of the company. The
leader has to put more focus in educating the employees regarding significance of knowledge
transfer of the company. The period, in which the employees are in ready practice with the
durability of their knowledge transfer, is the ultimate point of success regarding the conception
of knowledge transfer in the company itself (Lee and Ram, 2018). The role of leadership in
Toyota needs a steady improvement in this regard to venture future possible prospect for the
company to grow. This is the area of understanding the matter of knowledge management by the
leaders, who have the sole duty of influencing its employees in steady understanding of
knowledge transfer in and outside the company. The area of knowledge management can be
further improvised by Toyota in areas of suggesting better production system of the company to
its new employees. The overall profit of the company can be hampered if no substantial effect is
put on the new employees. Better effective program needs to be considered for employees who
are joining recently in the company to instigate and motivate them in understanding the prospect
of knowledge transfer in the company.
Change Management Issues and Strategies for Overcoming Resistance to Change
The change management in any multinational company is of immense significance and priority
that requires proper utilization of strategy on the management leader’s part. The possible
resistance to change in such matters is mostly expected on the part of the employees who detest
such new change implements in the company (Noe et al., 2017). In the case of Toyota, the
employee build is mostly affected by these sudden changes and require a informed clarification
on the part of the human resource management team to emphasize the possible incentives and
aims that can improve their present condition. This is the prime method of overcoming the
possible management change resistance that is being implemented in the company. The human
resource management team needs to be on an alert outlook regarding the latest trends and
possibilities that can be of advantage to the company and should be open to adapt the trends to
hold the forefront position of their company. The various trends that can affect the company in
flourishing in new areas of development and skill include human resource innovation. The
various problems and assertive situations require immense innovative approach on the part of the
management team of Toyota. The strategy that is best suited for Toyota in terms of resisting
employee subjected to implementation of any kind of change is providing innovative strategy to
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improve the employee satisfaction in the company (Matsuo, 2015). This has to be done with an
innovative approach by showing the employees appropriate ways of providing incentives for
them and creating a better growth in the company for themselves. The human resource strategy
of implementing better methods of satisfying the employees should be direct in approach without
any complexity. A complex approach can further complicate the employees and in the course of
their work, they can get frustrated with the additional effort of understanding the possible profits
of the changes implemented in Toyota. This in a way also encapsulates the employee retention
rate the multinational company of Toyota.
Organizational Culture, Climate, Leadership and Culture
The multinational company of Toyota has a huge impact in the automotive industry and its vast
expanse in influencing other foreign industries. The responsibility of the organizational
employees in matters of the challenges that the company faces in the market defines the
organizational culture of Toyota the best. The expanse of the multinational company is best
focused on the matter of expanding its human resource management approaches with innovative
strategies that ideally defines the company culture. The implementation of various change agents
on a yearly basis in the company is huge merit that it focuses on in highlighting different areas of
strength in the company. The organizational culture of Toyota emphasizes the significance of
creating an apt culture for establishing a global security in the vast market of automotive
industries. The main focus that is found in Toyota’s organizational structure includes its effective
teamwork that is efficiently led by a good management. The secrecy of its knowledge with prime
focus on its hierarchy in the company is a specific culture of Toyota. The matter of continuous
improvement at work in Toyota is established through learning process. Effective work of the
individual worker is recognized and rewarded to provide them with better scope of growth in the
company. The leadership management allows the employee to stay motivated and focus with
determination. This shows a significant area regarding the company leadership, culture and
climate of the company.
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Conclusion
From the discussion, it is possible to reveal that Toyota is operating their business in a high
competitive and demanding industry. Moreover, these can be seen that this organization is the
most popular along with innovative company in all over the world. In this regard, this can be
seen that Toyota spends a lots of money for their research and development and achieved a
competitive advantages from today’s highly competitive market. The company is holding the
first position as an automotive manufacturer in all over the world. Based on the revenue of the
company, this can be found that Toyota is leading the automotive industry. The company
achieves the faith of the consumers along with hold the position of largest automotive producer
in all over the world. From the discussion, it is possible to conclude that the transfer of the
intrinsic information of the brand is an important procedure to its overseas locations. This assists
to gain enormous recognition along with improved brand image. The intrinsic quality of the
transfer knowledge from the domestic organization is complicated similarly to relocate to foreign
brands but the integrity of Toyota lies in it. Therefore, this is apparent for the brand to put
emphasize on its knowledge transfer along with deduce new process of conveying their
knowledge so that their information is protected and less highlighted for other brands to use.
The complexity of knowledge transfer method for Toyota has to overcome with greater areas of
influence and power over other foreign industries. The automotive company takes alternative to
basic research in order to carry out research, which is related with the technology of vehicle. In
addition, Toyota takes initiative to forward looking technological improvement with the aim of
developing leading edge components to keep them ahead from its competitors. The future
forecasts for Toyota in upgrading their methods of knowledge transfer have to do a lot with the
internal leadership possibilities of the organization. After the discussion, this can be possible to
recommend that Toyota have to make more investment on their research and development as this
can aid them to maintain its innovation capabilities along with launching the innovative product.
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