Two of the Toyota Production System’s philosophies are “Daily improvements” and “Good Thinking. Good Products” (Toyota Motor Corporation, 2010). Recently, Toyota has faced a mass recall. There are several external and internal factors to consider as Toyota’s management reevaluates and reformulates its four functions: planning, organizing, leading, and controlling. Factors that impact the four functions are: globalization, technology, innovation, diversity, and ethics. Managers need to use delegation to manage all functions and factors to reestablish the credibility the company.
Planning is a decision making process that incorporates a cycle in which outcomes are analyzed, evaluated, and revised. More specifically, internal and external factors can impact the function of planning more often than none. When evaluating the planning with Toyota and their various recalls, the sources management needs to focus on are clearly their customer’s safety and further their satisfaction. These external sources will bring Toyota’s management back to the first function of management, which is planning.
“With more than 9 million cars covered under its latest recall, Toyota’s management is certainly under the microscope. In fact, Toyota is facing both criminal and Congressional probes into its safety problem” (The Hufftington Post, 2010). With these extraordinary circumstances, Toyota’s managers must use their managerial functions: planning, organizing, leading, and controlling. In the recalls, Toyota has had to adapt to these external factors and provide immediate changes to their normal planning.
Once the planning has been established, Toyota can begin to organize, lead, and control the process of the various Toyota recalls. Their plan of alerting customers through the dealers and through the Internet is a primary example of effective management. Customers can enter the vehicle identification number on their website to immediately determine if their autos are one of the affected and can further begin processing the claim.
Managers must also control the situations and the outcomes of their plans internally through analytical planning. As the auto recalls and repairs take place, the effects of these recalls have to be analyzed internally and eventually provide management the necessary information to determine how successful their immediate planning was. External factors, such as dealerships, customers, and mechanics, will also have immediate effects on Toyota’s planning. As repairs take place, information will be sent back to the corporate managers to establish the success rate.
Toyota has globalized their company and has expanded to more than 170 countries such as Japan and the United States. Globalizing Toyota impacts the four functions of management. Globalizing Toyota would have taken a tremendous amount of time and effort on management’s part. Planning needs to be in detail in which the Toyota Company wants to sell their vehicles and how much they anticipate the vehicles sell for. Management needs to organize globalization by discussing the outcomes of the sales and benefits that would be provided in the other countries they want to globalize in. Management needs to set up a meeting with other countries and dealerships to show the new idea of where to locate dealerships and provide them with the benefits packages.
Leading globalization can either be easy or difficult, because the countries may have a hard time with debating if they want to use Toyota as one of their vehicles to sell. With management leading the globalization, they need to explain to the other countries that Toyota is a good vehicle, and it would be beneficial for them to sell them. Management needs to motivate the dealerships to sell the vehicles and to become top sellers.
To control globalization, management needs to make sure that they provide enough information about their vehicles and their company to other countries. Without information, it would be difficult for other countries to decide on Toyota the product they want to sell to their customers.
Management plans to use technology to achieve future goals. They help with designing vehicles and communicating to other facilities to make sure that everything is operating correctly. Management organizes information using technology such as the Internet so customers can see more information regarding their vehicles and their prices. They also organize information for the employees so they can see new information which is out, such as the recall on the Toyota vehicles. Then they can tell their customers what to expect and how to handle the situation.
Technology allows management to be leaders and to motivate their employees by sending congratulations e-mails to the top sales employee or by telling them what they have earned if they sell a specific amount of vehicles. Motivating employees helps keep the morale strong, and the Internet helps communicate motivational messages across different countries and departments.
Controlling technology helps managers so see what quotas were met to reach the goals. Quotas will make it easier for the manager to calculate everything to be sure employees reached their goals and by how much more they need to go if they have not reached them.
Management plans for innovation when they begin their projects. They need to determine what new innovation will bring them and how much it will contribute to the company. If innovation is a good idea, such as using different types of gas pedals on the vehicles, then management can put that plan into action and project how much it will cost them compared to their profits.
To organize innovation, management needs to take their time to be sure Toyota products will make them money. They need to provide a blueprint to the employees stating the details of the new innovation and why it will benefit Toyota. Management can also explain the sales involved. To control innovation, management needs make sure that the production department is following instructions.
Diversity impacts the four functions of management. Management’s planning might focus on the diversity found within the skills of its subcontractors in other countries. Strategic planning may include reevaluation of factories and the ultimate cost thus far of locating factories in areas for the purpose of lowering costs due to shipping.
Management will focus on diversity when organizing training for its current and future employees. Weaknesses need to be identified so such organizing can be established. In Toyota’s time of crisis, management will find a number of diverse reactions from employees as many will have to be let go in the company’s time of loss. Leading the workers by motivating the remaining employees may be difficult given the diverse emotions felt by all.
Diversity in controlling the situation may be found in how responsive customers are to Toyota’s efforts to rebuild a damaged reputation. The diversity found in the customers’ reactions will determine how well the company’s efforts are working on reestablishing faith in the product and whether or not management goes back to the drawing board.
One of the main internal factors that affect the four functions of management for Toyota is its guiding principles. There are five main principles: always be faithful to their duties, thereby contributing to the company and to the overall good, always be studious and creative, striving to stay ahead of the times, always be practical and avoid frivolousness, always strive to build a home-like atmosphere at work that is warm and friendly, and always have respect for God, and remember to be grateful at all times (Toyota Motor Corporation, 2010). These principles install an ethical standard by which the company operates. The ethical standard of the five principles are incorporated into the “CSR POLICY: Contribution towards Sustainable Development” (Toyota Motor Corporation, 2010).
The CSR is a statement about Toyota’s relationship with parties connected or with businesses involved with the corporation. These parties are listed ascustomers, employees, business partners, shareholders, global society, and local communities(Toyota Motor Corporation, 2010). Through the CSR, Toyota sets ethical standards for its corporate relationships.
Until its recent crisis, Toyota was viewed as highly ethical in regard to responsibility to people and the environment. Management is morally aware of its current unsafe vehicle situation. Planning will likely incorporate the elimination of the unsafe system and the incorporation of new safety standards and procedures. The CSR states, “Based on our philosophy of “Customer First”, we develop and provide innovative, safe and outstanding high quality products and services that meet a wide variety of customers’ demands to enrich the lives of people around the world” (Toyota Motor Corporation, 2010).
Management has had to organize press conferences to explain to consumers about what was happening. Organizing such conferences shows a corporation that strives to be socially responsible to customers and their safety (Bateman & Snell, 2009).
Toyota put an “ecotechnologies” division together and developed a “hybrid electric-combustion” automobile (Bateman & Snell, 2009). Management’s efforts are not all forgotten. Continuing to lead the company in offering environmentally responsible products will continue to be a goal.
If ethics are implemented in the correct way, Toyota will maintain its integrity (Bateman & Snell, 2009). Management will control efforts to stabilize the company by monitoring new action plans put into effect for the resolution of the vehicle safety issues they face.
Toyota has faced a mass recall. Toyota needs to consider external and internal factors such as globalization, technology, innovation, diversity, and ethics, and how those factors will affect planning, organizing, leading, and controlling. Then they can begin new strategic planning to overcome their current crisis.
Bateman, T. S., & Snell, S. A. (2009). Management: Leading & Collaborating in a Competitive World (8th ed.). : McGraw-Hill.
The Hufftington Post. (2010, March 10). Worst Product Recalls. Retrieved March 13, 2010, from The Huffington Post: http://www.huffingtonpost.com/2010/02/23/the-worst-product-recalls_n_472340.html
Toyota Motor Corporation. (2010). Toyota production system. Retrieved from http://www.2toyota.co.jp/en/vision/production_system/origin.html
Toyota Motor Corporation. (2010) CSR POLICY : Contribution towards SustainableDevelopment. Retrieved fromhttp://www2.toyota.co.jp/en/vision/sustainability/
Toyota Motor Corporation. (2010) Guiding Principles. Retrieved from http://www2.toyota.co.jp/en/vision/philosophy/