A. Toyota’s Nature of Strategy Implementation Process
The organization strategy implementation involves the management process application to achieve the desired results.Toyota‟s nature of strategy implementation process includes designing of the organisation structure, allocating resources, human resource management and staffing, leadership and developing information and decision process.
OrganisationStructure Changes
Toyota‟sorganizational structure is divisional.As a response to the safety issuesin 2009, this structure has been dramatically changed in 2013. Before the reorganisations, Toyota has a strong centralized global hierarchy, in which all the major decisions were made in Japanheadquarters without communications individual business unitswith each other. Therefore, the decision making process was too slow. Now Toyota‟s new organizational structure has several features( Gregory, 2015): Global hierarchy. Geographic divisions Product-based divisions
These characteristics will be in detail evaluated in question E.
Human Resource Management and Staffing
In order to achieve its goals, Toyota focuses on training its employees. To beging with, Toyota applies “standardized work” tool that means that all jobs are organized around human motion to illuminate wasted efforts. For this reason, people are trained to follow standardized procedures of the work, such as supplying parts and units on assembly lines at the certain time and sequencing proper their works. Moreover Toyota never dismisses its workers who, at first, fail to do their job proper because of the lack of judgment,insteadthey are trained extensively in order to be better problem solvers.
Allocating resources
In order to eliminate waste Toyota uses just-in-time system. That means that using sub-assemblies all parts and components of vehicles are delivered to the certain part of main assembly exactly at the time they must to be. Therefore, all the pieces and bits of transferring
materials and all activities that don‟t add value are cut out. This is highly effective tool in reducing inventory levels and cost of final products.
Information and decision process
Toyota does not only encourage its employees to participate in decision making process, but created some important tools, such as root cause analysis, to help worker to makea decision. Root cause analysis is a problem solving methodology that allows understanding problem instead of making quick fixes which only treat problem symptoms. Using this tool, workers should ask „Why?‟ five times – every time going a step closer to discovering the real cause of the problem.
Leadership
Toyota‟s leadership has changed dramatically over decades and particularly in last several years. The company encourages its staff to create new unique ideas for production improvements. Toyota develops people to break job routine even if it means to confront the boss. Moreover, instead of mechanically follow instructions, the company wants workers to develop the best way of doing their jobs. “Never be satisfied” is the tout messages of Toyota.
B. The Market Segmentation of Toyota
Currently Toyota is focusing on two segmentations:
1. Demographic Segmentation (relating to the structure of populations). In this segment, Toyota targets family with the middle income (Corolla) and high income earning group (Land Cruiser, Parado and Camry). The latter are designed for people who have the willingness and buying power to buy these cars(UK Essays, 2015).
2. Psychographic Segmentation (the classification and study of people according to their aspirations, attitudes, and other psychological criteria). In this segment, Toyota targets consumers who live a luxurious lifestyle(Lexus is division under Toyota). Lexus over compete its rivals by providing high quality luxury cars at lower prices. In addition, the company has segment of people of the high class, a high income group who prefer sporty cars (Toyota Altis Sport and Toyota Fortuner)(UK Essays, 2015).
C. The Perceptual Mapping of Toyota
Perceptual mapping is a tool that helps to visualize the different brands positioning in the market. Perceptual maps allow quickly compare various brands and make strategic decisions about repositioning of the brand( Bassell , 2016). Below, there is the perceptual map on different car brands:
To compare car brands two characteristics, quality and price, have been chosen. How it can be seen through the perceptual map, Toyota vehicles have a very competitive position. With pretty high quality that is slightly lower than such impressive brands as Cadillac and BMW, Toyota products has relatively low price which is a result of the organization strategy implementation lasting for decades and leading to low costs of the products.
D. Financial and Accounting Issues Addressed related to Toyota’s strategy Implementation
1. In 2003, Toyota set up its Global Production Center (GPC) to effectivelytrain large number floor experts workers in the latest TPS methods as a response on increased number of sales. Furthermore, in 2006, Toyota established regional GPCs in the United States, the United Kingdom and Thailand. All these programs were quite costly and required significant funding.
2. Three separate but related recalls of vehicles by Toyota Motor Corporation came at the end of 2009 and beginning of 2010.The recall happened at adifficult time for Toyota. The company had already beensuffering from the recession and struggling from the sales decrease. In addition the exchange rate of yen very high that made the overseas trade less profitable. The reputation of Toyota fell significantly. Therefore, better communication consumers with management about issues were essential.
E. Organizational Changes Toyota Made Its in Strategy Execution of Manufacturing World-Class Quality Vehicles at Lower Cost and Selling Them at Competitive Price Levels
Organisation Structure Changes
As it was mentioned in question A, Now Toyota‟s new organizational structure has several characteristics:
Global Hierarchy.Although Toyota still has global hierarchy, after the reorganization in 2013, the decision-making power of regional heads and business unit heads has been enhanced. Therefore, the speed of Toyota‟s communication and decision-making processes has been increased dramatically ( Gregory, 2015).
Geographic Divisions.There are eight regional divisions in Toyota‟s new organizational structure: Japan, Europe, North America, China, East Asia and Oceania, Asia and Middle East, Latin America and Caribbean, and Africa. The regional divisions allow Toyota to be aware of regional market conditions and, as a result,to improve quality of its products and services. Product-based Divisions.Toyota has four divisions: Lexus International
Toyota No. 1 operates in Europe, North America and Japan. Toyota No. 2 operates in all other regions.
Unit Centerprovides all divisions with engines, transmissions and other related operations.
These characteristics of Toyota‟s organizational structure help to develop product lines and brands of the company.
Human Resource Management and Staffing
Toyota makes a great effort in training its employees. This brings various advantages to the company:
Economy in Operations:Trained personnel use materials and equipment more efficiently.Waste is reduced. The rate of accidents and damage to machinery and equipment are minimized.All these lead to less cost of production.
Greater Productivity:Training employeesincreases productivity and quality of output.
Uniformity of Procedures:Training makes process of standardisation of the best available methods more efficient.
Less Supervision:Proper trained employees require less detailed and constant supervision.
Creation of Inventory of Skills:Instead of seeking the skilled employees from outside sources, it is better to choose and train workers from within the organization.
Higher Morale:By the training employees, dissatisfaction, absenteeism,complaints and turnover can be reduced dramatically.
Just-In-Time (JIT)
Just-in-Time means that the company must do only what is required, when it is required, and in required the amount. The production of the company should be based on customer demand, but not on projected demand. Using Just-In-Time system give Toyota numerous benefits: Very effective in reducing inventory levels. As a result, the warehouse costs is lower. Better supply chain management. Better customer satisfaction. Less waste.
Information and decision process
Root-Cause Analysis
Using root-cause analysis gives numerous benefits to Toyota ( Dillard, 2016):
Team Alignment:Root-cause analyses help staff to see the real issues for themselves, which focuses the whole team no the problem instead of only being explain what to do by management.
Prioritization:Root-cause analyses help to select the challenge which needs to be solved first and which ones should wait until later.
Resource efficiency: Root -cause analysis helps to maximum impact and effectiveness and safe budget of the company.
Discovering value:A root-cause analysis is not only effective infinding out challenges, but it also unearths the best practices that most benefit Toyota.
Saves time: Using root-cause analyses, it is not necessaryto spend months working on something that does not work. Instead, the most important issues could be fixed.
Focus: Root-cause analyses can avoid fixing many problems at the same time.
Instead,root-cause analyses concentrateattentions on the 2-3 issues, leaving the rest of the problems to be dealt with later.
Leadership
Toyota‟s leadership brings numerous benefits to the company: It increasesthe employees‟satisfaction and performance.
Communicating and sharing information approach several objectives.
This leads to organizational stimulation of entrepreneurial traits and fostersemployees to make decisions, take action, and encourages them that they can take control of their own fate.
Amounts of time communicating with employees is increased which lead to enhanced feedback.
2. The Strategy Process of Decision Making and Organizational Change of Chrysler
One of the major problems for Chrysler,that kept the company away from innovation, was its culture. It was old fashion culture where top managers never allow workers from lower level of hierarchy structure to make a decision. This situation leaded the company to bankruptcy. In order to save Chrysler from collapsing Doug Betts (ex-top manage of Toyota and Nissan) made various critical organizational changes.
1. As a part of Chrysler‟s bankruptcy reorganization, management control was given to Italian auto maker Fiat SpA. This gave Chrysler various benefits:
Acquire quality staff and additional skills, knowledge of the industry and othersvarious business intelligence.
Obtained access to funds and valuable assets for new development. Obtained access to a wider customer base and increasing its market share. Diversity of the products and services and long-term opportunity. Reducing product costs and overheads by sharing marketing budgets and increasing purchasing power. Lower competition.
2. Reorganisation. Betts began by creating new cross-functional teams which was designed to break down Chrysler‟s attitude to manufacturing and engineering.
Cross-functional teams consist of people from different parts of the business, that has come from diverse educational backgrounds and have differenttalents andskill sets. The diversity of the team allows workers to share skills and ideas to achieve the objective of theorganisation.
3. Elimination waste. Theproblems were that documents had been handed from one department of the company to another which leads topostponingaction for an average of 71 days.Cross-functional teamwas emboldenedto reduce time waste by encouraging quality teamsto take ownership of solutions.
4. Ownership of solution. All workers from top managers of departments to plant and shop floor personal must be encouraged and trained to take responsibility in solving problems. This lead to reducing operation time and enhanced employees‟ moral.
5. Empowerment of employees. Employee empowerment is giving workers a certain degree of authority and responsibility for decision-making. In autocratic hierarchical structured organisations top managers never allow workers from lower level to make a decision. To empower employees, the organisation should fist carefully select people in order to trust them and then give freedom. Employee empowerment give the organisation various benefits:
Higher adaptability to changing. People are satisfied and motivated. Higher productivity. Better management. Enhanced job security. Improved employee morale. Improved and innovative processes.
3. The Strategic Decisions that Present Ethical Challenges and Recommendations for Ethical Decision-making
A. Ethical Challenges for Apple’s Outsourcing Strategy Decision
As a global company Apple has business partners throughout the world. Cultures, moral norms and government regulation differ from country to country. This leads to ethical issues with Apple‟s suppliers. Ethical issues, in turn, could be cause of the company customers‟ dissatisfaction as Western countries population concern about the human rights in developing ones. There is the list of the most serious violations:
1. Overtimework: 60 cases of overtime works has been discovered on suppliers‟ facilities. Staffs were forced to work more than 60 hours per week during over 50% of the time. While Apple‟s request is a maximum of 60 hours per week except in emergency or unusual circumstances. In 65 cases, personal was forced to work more than 6 consecutive days a week as often as once a month. Whereas Apple requires that workers must have at least one day of rest per seven days of work except in emergency or unusual circumstances. Overtime works could cause of exhaustion and stress.
2. Underagelabour: In 2009, audits discovered three violations of child labour. Not all jobs made by children can be classified as illegalunderage labour Adolescents‟ or children‟s participation in work must not affect their health and personal development or interfere with their school schedules(International Labour Organisation, 2015). 3. Underpayment: There were 48cases when overtime wages had been calculated incorrectly. At 24 facilities personal were paid less than the given minimum wage. 45 times deductions were used to chasten employees.Apple discovered 57 cases in which worker benefits such as sick and maternity leave or retirement were below required by the law amounts. Actually, this behavior can be classified as a theft.
4. Health andSafety: In spite the Apple requirement to provide a safe working environment, at 49 facilities,staffs did not wear appropriate personal protective equipment. In 70 cases personal were improperly trained and unlicensed staffs were operating equipmentwhich required equipment inspections.All these violations might be cause of accident andcasualty at work places.
5. Environment: In 44 cases Apple‟s suppliers failed to provide environmental impact assessments. There were not air emissions permits at 11 facilities. In addition, 55 suppliers did not have any personnel assigned to ensuring matching with Apple‟s supplier code of conduct. As the environmental issues are in priority in modern society, the company reputation might be damaged.
B. Recommendations for the Ethical Challenges
Apple hasoutsourcing monitoring program which consists of audits of supplierfacilities, verification measures, andcorrective action plans. This is a good start. However, in my opinion it is not enough. Apple should establish new training centers in each region in which the company operates. These centers could provide education programs related Health and Safety, Human Resource Management and Environmental issues. Moreover, at each large suppliers‟ factory, a permanent post of monitoring, which consist of at least one Apple worker, should be introduced. This would allow Apple to tide oversight and give quick response on every case of violation. In
addition, personal of these posts might be given not only control functions, but involved in training process. Personal who can see the root cause of the problem knows better what is requires for improving the situation. Furthermore, Apple should create a punishment system for suppliers which fail to meet the company high standards of conduct. Ultimately, the suppliers that unable to improve their attitude to existed issues end up losing Apple‟s business. Finally, Apple could film a story about itself, its issues and solving the problems. This film should focuses on the company suppliers which achieved high result in solving ethical issues and those who failed to do this. It would help the public realize Apple‟s efforts and be a warning for sluggish suppliers.
References
Bassell , M. (2016). Perceptual Maps. Retrieved from User Home:
http://userhome.brooklyn.cuny.edu/bassell/myles_bassell/502PMP1D.pdf
Dillard, J. (2016). The Benefits Of A Root-Cause Analysis For Your Federal Defense Agency.
Retrieved from Bigsky: http://www.bigskyassociates.com/blog/the-benefits-of-a-root-cause-analysis-for-your-federal-defense-agency
Gregory, L. ( 2015, September 22). Toyota’s Organizational Structure: An Analysis. Retrieved
from Panmore Institute : http://panmore.com/toyota-organizational-structure-analysis International Labour Organisation. (2015). What is Child Labour. Retrieved from International
Labour Organisation: http://www.ilo.org/ipec/facts/lang--en/index.htm
UK Essays. ( 2015, March 23). Market Segmentation Toyota Consumer Buying Decision Process
Hilux Marketing Essay. Retrieved from UK Essays:
https://www.ukessays.com/essays/marketing/market-segmentation-toyota-consumer-buying-decision-process-hilux-marketing-essay.php
UK Essays. ( 2015, March 23). The Toyota Marketing Strategy Marketing Essay. Retrieved from
UK Essays: https://www.ukessays.com/essays/marketing/the-toyota-marketing-strategy-marketing-essay.php
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