Business, Society, and Planet: Toyota and Volkswagen - A Deep Dive

This report provides a comparative analysis of Toyota and Volkswagen, two major players in the automotive industry, examining their approaches to business, society, and the planet. It delves into their historical backgrounds, organizational objectives, and sustainability initiatives, highlighting differences in their corporate social responsibility (CSR) strategies. The report explores their missions, visions, and goals, emphasizing Toyota's focus on road safety and environmental issues and Volkswagen's emphasis on economic factors and customer satisfaction. It also analyzes their environmental policies, social contributions, and corporate governance, comparing their adherence to Zadek et al.'s social accounting standards. The report concludes by discussing the common concerns and cultural impacts of their strategies, offering insights into their commitment to sustainable business practices and their responses to environmental challenges and societal expectations.

Running head: BUSINESS, SOCIETY AND PLANET
Business, Society and Planet
Name of the Student
Name of the University
Author Note

1BUSINESS, SOCIETY AND PLANET
Introduction of the companies
Toyota
Toyota is a multinational automotive car manufacturer with a worldwide serving area.
This company was found in the year 1937 by Kilchiro Toyoda. They are regarded as one of the
global leaders in hybrid electric vehicles. They have encouraged the people worldwide to
encourage adopting the hybrid vehicles so that it can be used in a mass market. They have been
producing 10 million automotive vehicles per year since 2012. This company had found its
place as the largest company in Japan by market capitalization. They have focused on to produce
vehicles that can be eco friendly and stop the accidents in roads. The first product created by
them was Type A Engine.
Volkswagen
Volkswagen has been one of the giant companies in the automotive industries to have
stepped in the business. The headquarter of this company is situated in Wolfsburg. This company
was also founded in the year 1937 and thus 80 years old. The chairman of the board directors is
Herbert Diess. They produce automobiles products and they are one of the best in this industry.
They have more than 6 million employees over the world. They have expanded their markets to
several countries and they will be looking to invest more because they have used the recent
technologies to produce their new vehicles. They have focused on their corporate social
responsibility as well.
Question no 1

2BUSINESS, SOCIETY AND PLANET
In the first question the topic to discuss is about the background of the two companies on
which this paper has to be based on. The two companies are Toyota and Volkswagen. These two
companies work in the same industry but their country or origin is different. Both these
companies work in the automobile industry. Volkswagen belongs to Germany where it is
produced in the German city of Wolfsburg. On the contrary, Toyota is an Asian company based
in Japan ("TOYOTA MOTOR CORPORATION GLOBAL WEBSITE", 2017). These two
companies have been selected to show the difference between them as their country of origin is
in two different continents. There are various differences like the geographical and climatic
differences. The target audience and their requirements are somewhat different from each other
as well (Tiwari & Herstatt, 2012).
Volkswagen produces and assembles the plants for the local markets in over 15 countries
all over the world. ("Volkswagen Vento- Book a Test Drive | Volkswagen", 2017). So they can
be considered as a global company. They are an international organization in this context.
However, Toyota possesses more producing factories all over the world and thus has a larger
market. Toyota has their branch in Australia as well, called the Toyota Australia. Australia has
been considered as the country where Toyota has been assembling the parts of the cars outside
Japan ("TOYOTA MOTOR CORPORATION GLOBAL WEBSITE", 2017).
It was in 2015 when Volkswagen had been alleged of a very grave accusation. The
accusation was about the nitrogen oxide emission. The pollution amount had been crossed by
them and this had been a very harmful thing for them. The authorities claimed that Volkswagen
had been cheating the customers about the gas emission of nitrogen oxide. This is because
nitrogen oxide has been regarded as a very detrimental gas for the human health and causes a lot
of damage to the human health. Diseases like stroke, asthma, abnormal situations at the time of

3BUSINESS, SOCIETY AND PLANET
birth and many more could be caused. This caused environmental harms as well (Songolzadeh et
al., 2014).
Question no 2
It is the automobile industry in which the both companies operate in. They have some
same set of missions, vision and goals in their organizational objectives. Hence, there are some
differences as well. Though both of them produce cars, there exists some difference on how they
have looked upon their objectives and goals and they have presented these things in terms of
their annual reports (Thomas & Lamm, 2012). Sustainability is one of the main determining
factors for them. As noticed in their reports, it can be noted that Toyota has their focus on
corporate governance, social responsibilities and environmental issues. On the contrary,
Volkswagen’s main focus is on economic factors, people or the customers and the environmental
issues ("Volkswagen Vento- Book a Test Drive | Volkswagen", 2017).
Toyota was founded by the stalwart leader of Japan Sakichi Toyoda. The legendary
founder’s heritage has been carried by Toyota over the years. The goals and objectives of the
organization have been in alignment with that of their legendary leader ("TOYOTA MOTOR
CORPORATION GLOBAL WEBSITE", 2017). Their goals, missions and visions are clearly
aligned with their statements. These company goals are described very clearly. In the case of
Volkswagen, it can be stated that they are a European company this is why they look to focus
more on preparing their future strategies and amending the current strategies. This is really
helpful for them as their thinking process is much advanced than the others ("Volkswagen
Vento- Book a Test Drive | Volkswagen", 2017).
Toyota

4BUSINESS, SOCIETY AND PLANET
Society
One of the pioneering missions of Toyota is ‘Always Better Car’ and this strategy drives
them to build cars that will ensure the traffic safety in their countries. They follow an integrated
approach for the road safety and the drivers must follow them ("Toyota Global Site |
Sustainability Report 2016", 2017). The drivers get an optimal support at every stage of their
driving. Thus their major concern rests on the safety of the passengers and obeying the traffic
rules ("New Cars Toyota Australia: Prices, Service Centres, Dealers, Test Drives", 2017). They
shift their focus on the every stage of pre and post crash timeframe and the post accident rescue
so that safer cars can be created (Tai & Chuang, 2014). There have been issues in which Toyota
has been able to mention in their CSR report:-
 They have introduced the Panoramic View Feature Monitor that gives the driver a
surrounding view. It assumes as if the vehicle itself has a transparent nature and identifies
any obstacle in front of them.
 Another introduction is the Intelligent Clearance Sonar. This helps to avoid any collision
and reduces the damages of cars resulting from the accident ("New Cars Toyota
Australia: Prices, Service Centres, Dealers, Test Drives", 2017).
 They have also introduced the first auto parking safety system in the world. This helps
the car to pick the auto parking position.
 The HR policies of Toyota has always encouraged the participation of women in the
workplace and thus encouraging the diversity ("Toyota Global Site | Corporate
Governance", 2017).
Environment

5BUSINESS, SOCIETY AND PLANET
The Financial Year 2014 has suggested that Toyota had been able to produce 54 million
fewer tons of the Carbon dioxide emissions than the vehicles which are powered by gasoline.
("New Cars Toyota Australia: Prices, Service Centres, Dealers, Test Drives", 2017). They have
saved almost 20 kilolitres of gasoline through this process. It is a notable fact that the level of
fuel efficiency in Japan, USA and Europe has developed in a great level. Toyota also introduced
MIRAI and FCV (Fuel Cell Vehicle) that will be able to maintain sustainability in the
automobiles ("Toyota Global Site | Sustainability Report 2016", 2017). Toyota has always
considered the greenhouse gas emissions as prior issues for their focus. They have been working
with all the vehicles lifecycle to reduce the greenhouse gas emissions ("Toyota Global Site |
Corporate Governance", 2017).
Social contribution
Toyota has contributed through different activation systems on a global basis. They have
been doing it through their factory offices to enhance the lives of the communities. It has been
noted that the Annual Nationals Mayor’s Challenge in USA that has been taken by the citizen to
participate in the Carbon dioxide emission problems and saving water ("Toyota Global Site |
Sustainability Report 2016", 2017). This is called the ‘My Water Pledge’. The UK branch of
Toyota has contributed to various environmental causes like biodiversity. The initiative to stop
the global warming has been taken by Toyota Motor Thailand as well. The Toyota Weekend
Farmers promote the environmental awareness through the activities of cultivation and growing
vegetables in Korea.
Corporate Governance

6BUSINESS, SOCIETY AND PLANET
The company believes that if they apply the proper corporate governance within their
operations, they will be able to achieve a long term sustainable growth ("Toyota Global Site |
Corporate Governance", 2017). They are keen on building strong relationships with their
stakeholders. Business partners, local communities and other groups. They also focus on
delivering the best goods to their customers (Tricker & Tricker, 2015).
Volkswagen
Economy
The mission of Volkswagen is to become the leading motor and automobile company in
the world by the end of 2018. The matter of customer satisfaction and sustainability is also in
their minds as well. The German Centre of Automotive Management (CAM) has already
awarded them as the most innovative car producer. They believe in the process of localizing and
contribution to resourcing in the countries like China and Russia ("Volkswagen Vento- Book a
Test Drive | Volkswagen", 2017).
People
They like to focus on the personal management and they have put stress on providing
vocational education to their employees. They had made the arrangements of training more than
18000 apprenticeships around the world in 2014 ("Volkswagen Sustainability Report 2016 -
Home", 2017) Some of their initiatives are Student Talent Bank, Star-Up Europe, recruiting
7.39% disabled people being recruited in their organization as well. Their CSR projects have
been effective as well ("Volkswagen Vento- Book a Test Drive | Volkswagen", 2017).
Environment

7BUSINESS, SOCIETY AND PLANET
They are committed to achieve better environmental performance throughout the world.
They are focused to produce eco-friendly cars. They will look to achieve a better community
performance as well (Hsu & Zomer, 2016).
Question no 3
As both Toyota and Volkswagen belong to the same industry, they have some common
worries or concerns to think about. As they belong to different countries, they have some
different economical, cultural factors working so their priorities may not be of the same level as
well.
The road and traffic safety is one of the major concerns for them so they look to get rid of
the road accidents by technologies and producing many new ways. They have arranged many
awareness programs for achieving their target ("Toyota Global Site | Sustainability Report 2016",
2017). They have monitored that the number of road accidents were higher and their steps have
catered to improve the situation. The carbon emissions and other air pollution issues have been
looked after by them as well.
Volkswagen has been engaged in recruiting better talents to serve their organization by
human resource development ("Volkswagen Vento- Book a Test Drive | Volkswagen", 2017).
They will look to retain the talents all around the globe. Technological advancement is another
issue for them as well. Volkswagen has also though about their role in intelligent transport. They
are keen to improve the community lives and providing them with road safety on a larger aspect
(World Health Organization., 2015).
Despite the differences in missions and objectives, the cultural impact of their strategies
is huge. Toyota, being a Japanese company, has looked to carry forward the tradition of their

8BUSINESS, SOCIETY AND PLANET
founder where Volkswagen has focused on thinking about a sustainable future ("Toyota Global
Site | Sustainability Report 2016", 2017).
Question no. 4
The Zadek et al’s criteria for social accounting standard of quality, both the reports of the
two companies have been compared to throw light on relevant issues. Completeness and
Continuous Improvement has been mission from Volkswagen’s report.
Zadek et al’s
(1997) criteria
Toyota
Sustainability
Report 2015
Explanation Volkswagen
Sustainability
Report 2014
Explanation
Inclusivity  .. Customers:
Customer
Assistance centre
Toll free 365.
Employees: Global
CQO meeting.
Business partners:
Work together
with applying the
CSR activities
("Toyota Global
Site |
Sustainability
Report 2016",
 Customers,
employees and
stakeholders are in
the two way
communication
method
("Volkswagen
Sustainability
Report 2016 -
Home", 2017)

9BUSINESS, SOCIETY AND PLANET
2017).
Comparability  .. Setting up the CSR
objectives
comparing with
the earlier years
 Volkswagen
reports have been
compared between
years to achieve
the specific goals.
Completeness  . All achievements
have been
described with the
negative ones as
well like Car
Recall Issue and
Conflict Mineral
Issue ("Toyota
Global Site |
Sustainability
Report 2016",
2017).
Carbon emission
has been the
biggest threat but
no such negative
news has been
found in their
report
("Volkswagen
Sustainability
Report 2016 -
Home", 2017)
Evolution  . Participate in
innovation of eco
friendly products
and future
products like
Electric Robot or
space robot.
 Volkswagen
believes in
urbanization by
changing the
course for future.

10BUSINESS, SOCIETY AND PLANET
Management
Policies and
Systems
 . All compliances
and basic
guidelines have
been followed
("Toyota Global
Site |
Sustainability
Report 2016",
2017).
 Preventive and
compliance
approach has been
taken and adopt
corporate cultures
to protect conflicts
(Guiso, Sapienza
& Zingales,
2015).
Disclosure  .. All the essential
things like audit
report, financial
statements have
been provided
 Same as Toyota
External
verification
 . ISO 26000  GRI Index,
Independent
Assurance Report.
Continuous
Improvement
 . Several projects
have been
mentioned
Nil
Question no 5
Toyota’s main guiding principles are to be a good citizen, respecting law, provide safe
and clean products, and develop advanced technologies, strong team effort and others (Grint &

11BUSINESS, SOCIETY AND PLANET
Woolgar, 2013). The view point of their legendary founder has been followed to achieve
greatness. Some of them are:-
 Automatic driving technologies
 Beginning Toyota Mobility Foundation for non-profit organizations
 The ‘Monozukuri’ or people development philosophy has been followed.
 Accepting the Mineral Approach for human rights development
Volkswagen’s main principles focus on stakeholder management, risk management and
sustainable management (Carroll & Buchholtz, 2014). They are engaged in many CSR activities
to improve their brand reputation and employing disabled workforce to support that group. Their
contributions to education are to be applauded ("Volkswagen Vento- Book a Test Drive |
Volkswagen", 2017).
Question no 6
Group discussions were engaged for the social report of the two companies and they were
of a great help. I was given the chance to compare the two reports and have an idea of how my
other team members are looking at this issue.
I and rest of my team members have found that the Volkswagen report do not have clarity
in their issues. The main elements could not be identified. I found that Toyota’s objectives were
very clear. I also assumed that as Volkswagen belonged to Germany, a much developed country,
their approach to technological advancement was very practical and up to date. One of my group
members told me that it would be wrong if I look Toyota, the Japanese company from that
perspective. I should not consider Japan as an under-developed country. Japan has been much
developed in the past few decades.