Table of contents 1. Introduction 2. Toyota background 3. Toyota production analysis 4. Toyota and globalization 5. Toyota and HRM 6. Ethical issues and globalization 7. Conclusion 8. References Introduction Toyota is one of the largest car manufacturers in the modern world. In fact, this multinational corporation has become the leading car manufacturer replacing the world leader General Motors which has remained on the first position within several decades.
Obviously, this is a tremendous success for a Japanese company that was founded in 1937 and became the leading company of the world automobile market. Nowadays the company is one of the most influential players in the world market. In terms of this research, it is particularly important to dwell upon the influence of globalization on the management of the production. It should be pointed out that this section of the research paper should focus on the main changes that occurred within Toyota, understand their causes and perspectives.
To put it more precisely, it will be necessary to discuss the current global expansion of Toyota which builds new plants and acquires or creates new brands worldwide. In such a way, the company expands its markets and increases production. At the same time, this trend is directly linked to the process of globalization which eliminated substantial financial barriers and open Toyota the way to new markets, especially those of developing countries.
Not less important is the analysis of the human resource management of Toyota since it was traditionally considered to be one of the most successful companies in this respect. This section will analyze the changes that have occurred in this domain and the influence of the process of globalization on the company’s human resource management, which apparently needs to be changes since the traditional human resource management applied to Toyota, being quite effective, may not work well enough outside Japan, as well as in Japan tself, since the country is also changing under the impact of global socio-cultural and economic trends. In such a situation, it is obvious that globalization produce a profound impact on the functioning and management of Toyota that implies that ethical issues related to the changes caused by globalization arise.
This is why it is very important to define the current ethical problems and dilemmas the company may face since it really has to continue its international market expansion and make its human resource management more effective that naturally rises such ethical questions as whether it is ethically justified to reject traditional management style or its elements or what the extent to which the pursue for profit can change the corporate culture and traditions of the company, especially in the field of management.
Actually, it is extremely important to analyze the management of the production and human resource management of the company, its basic strategies of the development and related ethical issues in order to clearly define whether the current policy and management style of Toyota fully meet the demands of the new, globalized economy and, therefore, it will help better understand and properly assess the perspectives of the company in the future.
Obviously, Toyota, being the world leader in cars manufacturing, needs to take into consideration the recent economic trends and modify its production and human resource management to new conditions defined by the process of globalization, which, on the one hand, opens the way to the global expansion, but, on the other hand, poses new challenges Toyota has to cope with. Toyota background Toyota is one of the largest multinational corporations that is specialized on the manufacturing of cars. It is necessary to underline that in recent years it has overtaken other producers of cars, including the world leader, GM.
In fact, Toyota has managed to gain the leading position in the world market due to the successful strategy of the market expansion and the implementation of the effective management style. However, the current situation in the company proves the necessity of changes since Toyota cannot consistently rely on the approaches it used in the past, instead, it is necessary to modify the current policy and management of the company in accordance with the demand of the present epoch which is characterized by the process of globalization which overwhelms practically all countries of he world and companies operating in the international market. In fact, the success of Toyota was to a significant extent determined by the effective management on all levels which made the company highly productive and which created ample opportunities to promote its products worldwide. What is more important, Toyota production was and still remains highly competitive but, if in the past the company basically borrowed the achievements and technological experience of leading western companies than nowadays the company is one of the major innovators in the automobile industry.
In this respect, it should be said that Toyota’s first cars resembled successful American and European cars, such as Dodge, for instance, while nowadays, Toyota creates its own unique prototypes on the basis of new technologies. At any rate, one of the strategic directions of the functioning of the company is the development and implementation of innovation in its production. Obviously, the recent trends in Toyota are basically determined by the influence of globalization on the policy and strategic development of the country.
As a result, the management of the production as well as human resource management are consistently affected by this process, which defines the current situation and further development of the company. It is worthy of mention that Toyota traditionally paid a lot of attention to the main trends in the global market since it was practically always oriented on the international markets since the local, Japanese market could not physically consume such amount of products supplied by Toyota and it could not provide the company with the leading position in global terms. Toyota production analysis
Toyota is a well-known car manufacturer and, naturally, the company attempts to spread its products worldwide. This is why Toyota sales its cars in many countries of the world and it is a well-known brand, while its cars are popular in different parts of the world. Today, Toyota has its plants manufacturing and assembling cars not only in countries, which are traditional target markets for its products, such as the US, Australia, South-Eastern Asia, the EU, but it also actively enters markets of other countries of the world, including China, Argentina, Mexico, and others (Volti, 2005).
This means that Toyota attempts to develop its production chain worldwide or, to put it more precisely, the company has already realized that the ignorance of the potential of new markets can lead to the negative consequences to the market position of Toyota in the world market. What is meant here is the fact that the company heavily relies on its strategy of international markets expansion.
As a result, it needs to localize the production in order to enter new markets and make its products cheaper and more accessible to local customers while importing products from other countries may be quite expensive or, at any rate, importing Toyota’s products from countries where the company traditionally had its plants, to new markets will make their price considerably higher compared to the price of products of the major competitors of the company.
It is worthy of mention that countries where Toyota plants are the manufacturing and assembling cars may be divided into two distinct groups: developed and developing countries. In this respect, it is necessary to underline that Japan and other developed countries where Toyota has its plants are the major suppliers of high technologies and innovations. The most sophisticated devices and products that are used in the process of manufacturing and assembling of cars are produced in these countries, namely in Japan, the US, the UK, and other developed countries, where the educational and professional level of employees is higher.
As for developing countries, such as Thailand, Vietnam, Pakistan, and others, Toyota plants here are basically assembling cars and the interference of employees in the production chain is minimal because of their lower qualification compared to employees in developed countries where Toyota was traditionally presented and where experience and qualification of employees is higher.
In such a way, it should be said that Toyota plants in developed countries are the major producers of the most complicated parts of cars and local personnel generate new ideas that are initially implemented in plants situated in developed countries, while plants based in developing countries are mainly used for assembling cars on the equipment installed by Japanese, American, or other specialists from developed countries working for Toyota, while the local personnel basically fulfills purely mechanical job.
In such a way, Toyota plants situated in developed countries play extremely important role since it is these plants the main car manufacturers while plants in developing countries basically use technologies and equipment produced in developed countries to assemble Toyota cars for the local market. Traditionally, Toyota widely implemented new technologies in the process of the production. It is worthy of mention that nowadays this is an ethical issue in a way because the major efforts of the company target the development of environmentally friendly technologies.
To put it more precisely, one of the main priorities of Toyota is the development of hybrid cars, which could use alternative sources of energy, others than traditional fuel made on the basis of oil or gas (Sanna, 2005). In this respect, it should be said that Toyota was one of the first to mass commercially produce hybrid vehicles and among its best products may be named Toyota Prius, which may be viewed as a flagman of hybrid vehicles production of Toyota. In fact, such vehicles are very perspective and meet the modern demands to the environmental safety of cars since the emission of dangerous gases of such cars is minimal.
This is why this direction is quite perspective since it can be commercially successful and, what is more, it creates a positive image of the company among its customers worldwide. Toyota and globalization To a significant extent, the international market expansion of Toyota was possible due to the process of globalization. This process implies the economic integration of countries, elimination of financial barriers between countries and the promotion of free trade.
The process of globalization involves practically all countries and affects all largest companies. In fact, directly or indirectly globalization affects all countries, companies and even all individuals. In this respect, Toyota is not an exception. In such a situation, the global expansion of Toyota became a reality because the company has managed to develop an effective production chain in which the cooperation between its plants situated in developed and developing countries is highly productive.
No wonder that nowadays the production chain of Toyota is spread worldwide and it is possible to estimate that Toyota is really a global company which has its plants in many countries of the world, while there are even more countries where its production is sold by official dealers. To put it more precisely, Toyota has its factories practically in all continents and its cars are manufacturing or assembling in different countries. In this respect, it is possible to single out traditional markets where Toyota was widely represented and had its own plants. Among these countries it is possible to name Japan, where the company originates from, eighboring countries in Asian-Pacific region, including Australia, Indonesia, Turkey, European countries, such as the UK, France, Poland, and America, including one of the major markets Toyota targets at, the market of the US, and very perspective Brazilian market. However, in recent years, Toyota has enlarged its presence in the world expanding its presence in many countries many of which belong to the so-called third world, including Venezuela, Philippines, Pakistan, India, Malaysia, Thailand, China, Vietnam, Czech Republic, Argentina, and Mexico (Volti, 2005).
In such a way, Toyota tends to the localization of the production using plants situated in different countries as the suppliers of the company’s production to the local market. It is worthy of mention that the company tends to increase its presence worldwide in order to maintain its leading position in global terms in the automobile market. The process of globalization substantially facilitates Toyota entering new markets, especially those of developing countries.
In fact, in the past, there existed numerous financial barriers which prevented Toyota from effective and successful entering markets of other countries, which had its own car manufacturing industry or where competitors had already had a well-developed network of production (Peters, 2002). In such a situation, the company was forced to localize the production in the markets Toyota wanted to enter. In such a way the company could overcome existing financial barriers.
Nowadays, in the epoch of free trade that is actually the “engine” of the process of globalization, financial barriers have vanished or, at least, their impact on the economic relations between countries has been minimized. As a result, currently, Toyota can easily enter new markets and, in such a situation, the company needs a well-developed production chain simply to be represented in a possibly larger number of countries since, because of the geographical distance, it is not always possible to sell its products at adequate price compared to that of competitors (Gitlow, 1997).
At the same time, globalization and the elimination of financial barriers resulted in the larger opportunities to develop closer cooperation between different units of Toyota worldwide. Practically, this means that a company can choose relatively freely where and what it can manufacture since, being not bound to the demands of the local fiscal legislation as much as it used to be in the past, Toyota can unite the efforts of its plants situated in different countries to manufacture its cars. As a result, the company can adapt plants to the demands of the local market.
For instance, Toyota successfully developed the production of such cars as Toyota Corolla and Toyota Yaris in Europe, while in the US it successfully focused on the production of SUV and 4×4 which were traditionally popular their. Moreover, nowadays, the company can provide the supply of its products from different countries more effective, due to the lack of financial barriers, to make the manufacturing or assembling of cars in a particular country or region less expansive and more profitable. Toyota and HRM The development of effective human resource management was traditionally one of the priorities of Toyota.
At the same time, the development of the process of globalization can hardly fail to affect human resource management of the company. In this respect, it should be said that the traditional teams work principle, being quite popular and effective, needs to be revised in the current situation. In fact, the teams work, to a significant extent, determined the progress of the company and made its production highly effective since this principle fully met the mentality of Japanese people and, therefore, was readily accepted by them (Yasuda, 1991).
As a result, the productivity and effectiveness of their work increased substantially that was very important to the progress of the company and its international markets expansion. Naturally, as the company grew, it extrapolated its major principle of human resource management on its units situated in other countries of the world. The use of teams work principle was justified since it helped “to save billions by moving people out of purely supervisory position into flatter workgroups” (Robbins and Finley, 1995, p. 235).
At the same time, at the present moment it seems to be obvious that this approach cannot always work with equal effectiveness since people with absolutely different mentality are now working for Toyota in different parts of the world, while the teams work, as it has been already mentioned above, is the most appropriate to Japanese mentality. It is worthy of mention that this approach may be also quite successful in neighboring Asian countries, such as Thailand, China, Vietnam, where people have similar mentality as Japanese do since these Asian societies are highly collectivistic. In stark contrast, ndividualistic Western societies and, therefore, people working at plants of Toyota in Western countries, are more individualistic and they cannot always the principle of teams work as effectively as Japanese, for instance, do, because they rather tend to the individual success than the success of the team. The problem is often deteriorated by the relatively low educational level and qualification of employees, especially in developing countries, such as Mexico or Venezuela (Volti, 2005), because they lack essential skills and experience of work in teams and individual ambitions often outweigh the interests of the team.
This is why the company needs to modify its traditional teams work in order to increase the effectiveness of human resource management and make the work of employees more productive. This means that the company needs to take into consideration the mentality and inclinations of employees in different countries of the world and apply methods that are the most appropriate to a particular country where employees have different cultural norms and mentality compared to Japan or any other country where the teams work is applied successfully.
Anyway, it is necessary to remember that there were not so many teams work successes that were achieved “without misdirection, false starts, demoralization and unwanted turnover, as valuable people decided they could not adapt to the new regime” (Robbins and Finley, 1995, p. 264). Obviously the process of globalization increases these risks since cultural background of employees gets more diverse. Ethical issues and globalization Naturally, the profound changes in the modern world and the integration of Toyota in global economic processes resulted in the development of problems related to ethical domain.
In this respect, it is necessary to underline that the problem of the application of the teams work principle to all units of the company operating in different countries of the world may be a serious ethical dilemma. In actuality, this principle is often imposed to employees and entire organizations of Toyota working in different countries of the world (Khor, 2001). Potentially, this may lead to the cultural conflict since Toyota corporate culture is defined basically by Japanese cultural context that may be unacceptable to employees working in Western countries.
In such a situation, one of the major ethical challenges Toyota has to cope with is the development of universal ethical principles and the development of the universal corporate culture which could be applied in all units of the company situated in different parts of the world. Alternatively, it is possible to recommend the development of highly autonomous organizational structures which could relatively independently develop the organizational culture that met the needs of local personnel.
At the same time, another important ethical issue is the pursuit for profit and the maintenance of Toyota’s traditional image. What is meant here is the fact that the international expansion of the company results in the building of plants and employment of personnel in countries of the third world that threatens to the deterioration of the traditional view on Toyota as a reliable, Japanese company manufacturing cars of the highest quality (Volti, 2005). In such a situation, the company needs to establish an effective system of control throughout its world chain of production.
Conclusion Thus, it is possible to conclude that Toyota is a very successful multinational corporation that is affected by the process of globalization. At the same time, it is necessary to remember that such companies as Toyota also contribute to the progress of globalization since the company’s strategy is to promote international markets expansion and nowadays, Toyota operates worldwide, it has plants in practically all parts of the world while its cars are recognizable in all countries of the world.
However, such a trend to globalization, leading to the localization of the production and growing cooperation between units of the company situated in different parts of the world in the result of the minimization of financial barriers, affects the traditional management of the company, especially human resource management. The latter needs to be changed since its traditional principle of the teams work turns to be not so effective in new countries as it used to be in Japan, for instance.
On the other hand, the international market expansion stimulated by the process of globalization also affects ethical issues such as the growing risk of cultural conflicts within Toyota, which needs to refuse from its traditional Japanese conservatism and, instead of imposing of its own corporate culture to its foreign units, develop some universal ethical principles and new, universal corporate culture.
Nevertheless, regardless the existing difficulties, the position of Toyota is very perspective, basically due to the wide implementation of technological innovations, such as mass manufacturing of hybrid cars, which enhance the leading position of the company in the world market. In such a way, Toyota demonstrates a strong trend to internationalization of its production that inevitably leads to changes in its management style which need to be really universally and effective in all countries of the world where Toyota operates.
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