Term Paper, 2010
18 Pages, Grade: 1.0
1 Introduction to Report on the Toyota Company
1.1 Introductory Information
1.3 Executive Summary
2 Company Profile
3 Internal Environment
3.1 Organizational Structure
3.2 Human Resource Management
3.3 Corporate Culture
3.6 Corporate Strategy
4 External Environment
4.1 PESTLE Analysis
4.1.1 Political Effects
4.1.2 Economical Effects
4.1.3 Socio-Cultural Factors
4.1.4 Technological Factors
4.1.5 Legal Factors
4.1.6 Eco-Environmental Factors
4.2 Porter´s five Forces Model
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of New Buyers
4.2.3 Bargaining Power of New Suppliers
4.2.4 Threat of Substitutes
4.2.5 Rivalry among Competitors
5 Global Political Changes
5.1 Influences on Toyota´s Policies and Decision-making
5.2 Effectiveness of Toyota´s Response to Global Political Changes
5.3 Areas for Improvement in the Response
7.1 Porter´s Five Forces Model
7.3 TMC´s Corporate Governance
7.4 Guiding Principles
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The CEO of the Toyota Company Mr. Akio Toyoda has asked me, Arkadi Borowski, to prepare a business report that addresses the internal and external influences as well as the global political changes to which the Toyota Company is subject to. To be able to present a high-quality business report, I did detailed research on the company and its business environment. The information was gathered from: the company’s Annual Report 2008/2009, the official website of Toyota and internal know-how of the company. The sources and the additional professional literature are quoted in the references at the end of the document.
The present report deals with the analyses of the internal and external business environment, for this purpose the “PESTLE” analysis and the “Porter´s five forces model” were used. It also gives a short overview of the company and the type of business it is involved in.
The second part of the report is an in depth analysis of how global political changes affect Toyota´s policies and decision-making. There is also an evaluation of the effectiveness of the company’s response and the demonstration of areas for improvement.
The Toyota Motor Corporation is one of the world´s biggest and most favorable automobile manufacturers. Also, it is the leader in environmentally friendly and technologically advanced cars.
The official start up for Toyota was in 1937, as Kiichiro Toyoda launched the Toyota Motor Company. In 1952 Toyota exponentially grew to become successful. The company started to export cars to South America. Five years later the company gained ground on the North American market. Entering the US-market was for a breakthrough for Toyota in terms of automobile-exports. In 1982 Toyota Motor Company and Toyota Motor Sales Company joined forces to Toyota Motor Corporation (TMC).
The company now has 522 subsidiaries, 320.808 staff worldwide and is producing not only in the 12 Japanese factories but also in 51 other locations in 26 countries. Toyota Motor Corporation had the highest share price value of all car-manufacturers in 2007. In 2008 Toyota had total unit sales of 8.972 million cars and had an annual turnover of 239.4 billion US-Dollars. In the same year it adopted the status of “The biggest automobile-manufacturer”. (Annual Report 2008, Toyota Motor Corporation)
Today Toyota is no longer the No.1 automobile-manufacturer because of the financial crisis since 2007 and their image has been damaged due to the massive global recalls over sticking gas pedals.
The internal environment of an organization is based on elements within the organization. It contains things like the organization´s structure and culture, its human relations policies and procedures, the skills and experiences of the staff, etc. (Koontz H. & Weihrich H., 2008, p. 105).
The governing body of Toyota, which is the General Meeting of Shareholders, accrues every year in June. Shareholders may attend and vote at the General Meeting, if they have a certain amount of shares.
The Board of Directors is Toyota´s executive body and consists of 26 Directors that comprise of:
- The Chairman
- The Vice Chairman
- The President
- 8 Executive Vice Presidents
- 13 Senior Managing Directors
- An Honorary Chairman
- A Senior Advisor
Four committees that belong to the board are the Labor-Management Council, the Corporate Philanthropy Committee, the Stock Option Committee, and the Toyota Environment Committee. Furthermore, there are 229 divisions that are managed and coordinated by Toyota headquarters.
The Toyota Motor Corporation has achieved a lot of goals throughout its history, but to retain its success they have to become more of a team. For that reason TMC developed a lot of techniques applicable to production and employees. These techniques are often used in other companies or countries (Kanban, Kaizen, Just-in-time, etc.). Toyota is manufacturing its cars with the Toyota Production System (TPS) it is based on “just-in-time” principles. So they have to trust every employee. The employee is of importance because even a line worker has the power to stop a manufacturing line. If he/she sees a problem they can stop the manufacturing line and on the other hand there is a risk of higher costs incurring should the lines be stopped. To play safe and abolish mistakes, Toyota spends a large amount of money on employee training and development, by doing so they can apply their strengths, skills and opportunities. In addition to that, TMC provides workshops, trainee programs, information events, etc. for their employees and students. This is because TPS requires an employee to be an expert in his/her job. (Organizational Behavior, 2009, ch.14)
Furthermore Toyota has a lot of guiding principles (please see Appendix 6.4), which signify that TMC respects and honors their employees and supports them. (Toyota Annual Report 2009, p.27)
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