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 itself, 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 the 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, neighboring 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
4x4 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, individualistic 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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