Analysis of Toyota Motor Corporation's Sustainable Management Futures

This report critically evaluates the ethical and sustainability practices of Toyota Motor Corporation, a leading global automotive manufacturer. It begins with an introduction to sustainability and sustainable management, highlighting the importance of balancing environmental, social, and financial considerations. The report then delves into theoretical and conceptual approaches, focusing on the Triple Bottom Line (economic, social, and environmental sustainability) and Stakeholder Theory. The analysis section examines Toyota's CSR initiatives, including its commitment to environmental sustainability, ethical guidelines, and stakeholder engagement, referencing specific initiatives like the Toyota Environmental Challenge 2050. The report also provides an overview of the criticisms of Toyota's sustainability efforts. The conclusion summarizes the findings and discusses the implications of Toyota's approach to sustainable management. This report is a valuable resource for understanding how a major corporation integrates ethical and sustainable practices into its business model.

Sustainable Management futures

Table of Contents
Introduction......................................................................................................................................1
Theoretical/ Conceptual Approaches to Sustainability....................................................................1
The Triple Bottom line................................................................................................................1
Stakeholder Theory.....................................................................................................................3
Analysis............................................................................................................................................3
Discussion and Conclusion..............................................................................................................6
References........................................................................................................................................9

Introduction
Sustainability is referred to be as consideration of the social and environmental segments
along with achievement of financial gains. The sustainable management is an attempts by an
organisation to ensure that there is an right balance between factors such as planet, people and
profits of a business (Pal and Kumar, 2014). This assignment focuses on ethical and
sustainability practices which are being carried out by Toyota Motor Corporation. It is an one of
the crucial automotive manufacturer operating throughout the world from its headquarters in
Aichi, Japan. This report will be attempting to critically evaluate major perspectives of business
ethics along with sustainability practices in context of an organisation. The information will be
gained through undertaking numerous concepts and theories so that better understanding can be
developed. The next section of this report will be focusing on the use of theoretical and
conceptual approaches which will be used in this following case along with their relevancy to
proposed aims of the study.
Theoretical/ Conceptual Approaches to Sustainability
It is very crucial to undertake use of theories and concepts as they have been formed as
they are being tried and tested and are able to improve understanding on the subject of business
ethics and sustainability. The approaches which are highest relevant to the subject are focused
upon so that it leads to formation of suitable conclusions for this undertaking. A brief description
of the two approaches to sustainability which are undertaken in this segment are as follows:
The Triple Bottom line
It is an approach to corporate social responsibility of an organisation which focuses upon
social realm and environmental concerns along with making profits for a business organisation
(Rehan and et. al., 2013). The elements which are being cited in this approach helps an
organisation in becoming more sustainable in the current operating environment. There have to
be a balance amongst the factors and so that inclination towards one element does not destroy
others. A business have to make sure that they do not cross their ethical and legal boundaries
when it comes to making profits and be socially irresponsible. However this sustainability
approach is often confused with provision of some sort of industrial lifestyle whereas it focuses
on the improvement in the quality of life of people. The products and services which are being
delivered to people are carried out in an socially and environmentally responsible manner along
with appropriate consideration to the profit making capacity of the business. The notion of this
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approach states that it is essential for a business to make sure that sustainability on all three
grounds is being achieved. A brief description of the major elements of this approach are as
follows:
Economic sustainability: it is the main reason for which a business carries out its
operations in the market. It is duty of large corporations such as Toyota to form plans which
assures that suitable financial results are availed for a longer duration. The profits are to be
considered as top priority but it is essential for a business to not indulge in any of the unethical
activities (Benzerra and et. al., 2012). The economic sustainability of an organisation is crucial as
well as it contributes to the well being of the economy.
Social sustainability: it is an approach which leads to maintaining balance of values in
the life of people. There is an improper distribution of income in the economy in which 20% of
the people possess 80% of the wealth in the economy. The imbalances in environment is growing
at a steady pace which needs to be countered immediately so that balance on social grounds can
be restored. This segment of Corporate social responsibility deals with provision of ideal
employment opportunities to communities surrounding the business along with undertaking of
local initiatives for social upliftment. It is very important to inculcate factor leading to
construction of suitable workplace environment leading to sustainability.
Environmental sustainability: A business undertaking this approach have to evaluate
marginal and aggregate impact of business practices upon environment. Consideration of this
segment is carried out through controlling and managing waste and emissions. The business
practices have to be carried out through undertaking of green policies and practices by an
organisation so that there is minimum harm on the ecological system (Parparov and Gal, 2012).
The reason for which this approach is being undertaken is that it is one of renowned
approach when looking to initiate sustainability practices. It is helpful in examining of
sustainability practices along with ensuring that scope of business is enhanced. But there are
numerous criticism which are being attached with this model. The major criticism is that it is an
complex approach and undertaking of numerous intangible assets can be a difficult task for an
organisation. There is a lack of guidance with this model which can assist in fulfilling duties of
an organisation. The benefits of this approach can only be seen in the long run but for short term
it specifically results in reduction of profits.
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Stakeholder Theory
The stakeholder theory is a more comprehensive and attempts to cater value to all the
stakeholders of a business. Edward Freeman have stated that people who get influenced by the
working and decision of an organisation can be treated as its major stakeholders. This theory is
in contrast with that of Friedman's who have stated profit making to be the sole objective of the
company and sole approach through which growth of business could be attained. The stakeholder
of an organisation are its customers, local communities, management, suppliers, environmental
groups and most importantly financial institutions. It is very crucial for a corporation to supply
wishes and demands of all the parties which form an ecosystem for its survival in the market
(Bullock and King, 2011). It has been identified that profits solely will not be enough for a
business to survive in the business environment for longer duration.
It is essential for a business to be mindful to all the direct and indirect contributor to
success of an organisation. The reason for which this approach is undertaken is that it helps an
organisation to consider all the element in the ecosystem and make attempts to make sure that
needs and demands for each section is being achieved. The major criticism with this theory is
that it fails to maintain a balance amongst interest of major stakeholders. There is lack of
description relating to consideration to expectation of employees when it comes to decision
making. The conflict which arises due to clashes of interest generally results in disruption in
business operations and loss of shareholders of an enterprise (Müller-Christ, 2011).
Analysis
Sustainability management can be considered to be an approach with which a business
attempts to improve business operations with the use of end-to-end process. There is an
inculcation of radical changes in design along with measures for improvement of business. The
CSR and sustainability initiatives for Toyota Motor corporation were formed back in the year
2011 which is being depicted in the form of trees. The roots of tree describes value of business
and its trunk portrays stable business. This organisation is working with concept to make better
cars for the future along with enriching life of people involved in this aspect. The vision of the
company have been strategically divided between profit maximisation and CSR activities.
Toyota's have been known to contribute effectively into the social issues through their welfare
activities. The features of transparency is well emphasized by the company and is being
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communicated to general public in the form of Annual CSR report. The approach of Triple
bottom line is highly relevant in context of this organisation as it has been working in all the
three segment with equal force known as profit, people and planet (Lockyer, 2013).
This corporation has been working continuously to improve social standards of people
through consideration to safety, quality, human rights and complying with demands of every
stakeholder of business. The three part initiatives which has been considered by this organisation
involves people, traffic environment and vehicle to make sure that suitable vehicle are
developed. The ethical guidelines and code of conduct of business ensure that ideal respect is
being offered to people including stakeholders so that overall performance of company could be
improved (Cataudella, Crosetti and Massa, 2015). To further strengthen the situation, human
rights working groups have been formed which consists of human resources along with external
affairs so that major grievance of people could be resolved. There have been numerous instances
on which this institution has been seen on spreading awareness relating to human rights violation
and environment degradation practices. However there were instances when the people
complained of faulty accelerator and brake which was being rescued by the social reserves which
has been developed by the company.
This automotive manufacturer have been way ahead when it comes to considering
environmental concerns. This organisation have taken up an initiate in which it attempt to reduce
the carbon emission through its vehicles. It has formed environmental sustainability goals for the
2050 until which it is attempting to reduce carbon emission by 90% during that year (Toyota
Environmental Challenge 2050, 2018). There are numerous technologies developed which have
low carbon emission through its Kaizen (continuous improvement) undertakings. The use of
water is heavy in car industry and growing scarcity of water persuaded Toyota motors to
undertaken a step in that direction as well. This manufacturer have been aiming to minimize
usage of water in the painting, forging and other processes so that it can be preserved for the
future generations. The environment management is considered one of the priority by the the
business and are making attempts to make sure that green policies are implemented throughout
business (Anninos and Chytiris, 2012). But it can be said that all these are mere targets and some
of it is being actually implemented by the organisation. There are very little evidence available
which support their claims. The BEV technology which is being excelled by other organisation
have just begun here and this manufacturer only possess a Prius in the name of hybrids.
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It has been identified that corporations which have been practising sustainability practices
have been beneficial to an organisation in numerous manner (Welford, 2013). There may or may
not be a financial benefit involved with this subject but will definitely be beneficial in the long
run. The primary benefit which can be availed by a business in undertaking Triple bottom
approach is that human resources of an organisation can be managed effectively. The rise in
perception of employees towards an organisation directly results in improved performance of
business aggregately. Taking into account financial result of 2018 for Europe, it has been
identified that there is an increase in the sales of vehicles by a major 43,517 units totalling at
968,077 vehicles. The revenues of the business increase with 6.5% which is enhancement of
1,782.3 billion yen (FINANCIAL SUMMARY, 2018). The above statistics is enough to state that
this organisation have been working decent in the car industry is amongst the top 10 car
manufacturers in the world. Toyota have been aware the role which has been played by Triple
bottom approach in securing the future and resulting in improved relationship with the
community.
The company have been considering stakeholder practices to sustainability as well but on
a comparatively shorter scale when compared with the Triple bottom line approach. Toyota
motor corporation have been making attempts to make sure that expectations of all major
stakeholders are being exceeded by the business. The crucial stakeholders which are recognised
by this institution are customers, local communities, employees, shareholders and business
partners (Stakeholder Engagement, 2018). The company have formed a vision with which it
attempts to serve challenging goals. Primarily customers are served with quality oriented
vehicles which are safe and reliable and that too at affordable prices. The challenges related to
carbon emission and environmental burdens are to be reduced this initiative is being carried out
to make sure that the local community and environment is being considered liveable. The
development of new mobility system is being carried out to make sure that there are minimal
instances of accidents and congestion of traffic.
The focus is on creating an environment which is productive and creative so that
employees are able to fulfil their tasks and duties. It has been observed at various occasion that
this business is being inclined towards making sure that better business results is being achieved
through employees. The shareholders of this organisation who possess a share in the business are
rewarded with suitable returns which is helpful in maintaining a decent public image along with
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higher value of business (Yamaura and et. al., 2012). The open stance policy which has been
undertaken by the company makes sure that suppliers and business partners of this organisation
contribute to the economic development of that particular region. The relation which are being
formed are mutually beneficial to the business along with suppliers and manufacturer working
with the organisation.
The code of conduct which has been provided by the company determines the manner
through which right and wrong relating to business will be evaluated (King and Halpenny, 2014).
This organisation have been attempting to honour language and spirit of the law along with
respecting culture which has been practised by the diverse population. The best efforts of the
business are directed into making sure that regulatory practices along with moral conduct are
undertaken. This feature will result in lesser complication for business along with development
of a harmonious environment. The manufacturer is dedicating its services to make sure that
quality oriented safe products are being offered to customers. The efforts are directed into
making sure that a suitable environment is developed which is able to get the best creativity and
performance out of employees in the business. This approach of 'Mutual Trust and Mutual
Responsibility' attempts to provide suitable employment opportunities to people.
The organisation have developed social norms which assure that any violation and
criminal acts are being punished heavily maintaining productive and harmonious environment
within organisation (Nam, 2015). The activities which are not in the interest of the company or
consumers are not tolerated within premises and acted upon. The company have possessed an
equitable approach when it comes to managing tangible and intangible resources in an
organisation. The confidential information relating to trade secrets is heavily maintained by an
organisation and any person found violating the conduct is being terminated from the services
earliest possible. The assets inclusive of the intangible assets such as intellectual property is
heavily guarded and must not be shared or disclosed to any other party.
Discussion and Conclusion
This section of the report attempts to identify the major findings from the above analysis
and presenting the same. The primary approach which has been undertaken by the company is
Triple bottom approach which emphasizes on providing of equal consideration to social and
environmental factors along with profits making capacity of business. Upon analysis, it has been
identified that this automotive organisation have been active on the social grounds and economic
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grounds. The conformation to regulatory practices and code of conduct of business have assured
that ethical practices and offering are being conveyed to the customers. The social capital which
has been formed by this organisation have emerged to be helpful in dealing with slow market
phases along with overcoming of challenges which are encountered by business on social
grounds. There is no questioning of profits making capacity of business as it has still managed to
avail profits of 1.7 billion yen in the last financial year. Although on environmental grounds, this
institution is making more claims than other segment but have achieved a minimal. The strategy
for the year 2050 which has been formed by the company have not seen a breakthrough yet. The
stakeholder approach to sustainable management is not provided with due attention. The sector
such as suppliers, local communities and governmental organisation are not catered with
attention and inclined towards employees, customers and stakeholder of an organisation. The
consideration to all the segment will further be able to enhance reputation of this brand in the
operating market and be beneficial for this business in the long run.
From the above project it has been summarized that sustainable management is highly
indispensable for company as well as overall industry. As it aids in safeguarding the material for
coming generation also which resulted in future development. Basically, main agenda of this
project is to promote survival of an organization for longer period of time by focussing on each
or every aspect with the help of appropriate components. Toyota is a most successful
organization by having its outlets in several nation but motive is to establish goodwill at global
marketplace. Thus, overall report was focussed towards two most useful approach named as
triple bottom line and stakeholder analysis. These two frameworks are playing crucial role in
enhancing the performance of an organization by evaluating each or every elements of an
enterprise. Furthermore, it has been identified that these two theoretical concepts are helping
managers of firm in various forms such as; suggesting best growing opportunities, identify
hidden drawbacks, understand each or every aspects henceforth. It means, development of an
organization is automatically promote sustainability at corporate world as well as encourage
other competitors towards this policies. Moreover, one thing also determined that by using these
two approaches selected firm can easily regulate their possibilities of mistakes and errors. As a
result, profit of an enterprise can easily maximized and succeeded in maintaining their positive
image at global market. Throughout the study significance of sustainability is appropriately
understood and motivates entire industry towards their set goals or objectives. Last but not the
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least, it is analysed that Toyota is growing in a fastest way because of their impressive strategies
and plans because of which they can automatically attract society towards their products or
services.
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