The implementation of a strategy is one of the most important parts of the strategic management process. Most of the strategies tend to fail because of the poor implementation. In this case, we will be looking at the top management team at Toyota and analyze how they use structure, controls, and culture to implement their strategy and fulfill their corporate mission.
Toyota and Strategic Implementation
Toyota has adopted 7 principles for its guiding culture. There were established in 1992, revised in 1997, and are the following:
Honor the language and spirit of the law of every nation and undertake open and fair business activities to be a good corporate citizen of the world.
Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in their respective communities.
Dedicate our business to providing clean and safe products and to enhancing the quality of life everywhere through all of our activities.
4. Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide.
5. Foster a corporate culture that enhances both individual creativity and the value of teamwork, while honoring mutual trust and respect between labor and management.
6. Pursue growth through harmony with the global community via innovative management.
7. Work with business partners in research and manufacture to achieve stable, long-term growth and mutual benefits, while keeping ourselves open to new partnerships.
(Toyota.com Guiding principles at Toyota)
Seeking to renovate their reputation as regards corporate social responsibility, Toyota also presents their Five Guiding Principles which are:
Always be faithful to your 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 homelike atmosphere at work that is warm and friendly.
Always have respect for spiritual matters, and remember to be grateful at all times.
(Toyota.com Guiding principles at Toyota )
Their vision and Mission stresses that their first and foremost concern is to enrich "lives around the world with the safest and most responsible ways of moving people."
With thought to the past that they were faulted due to obsession with making a "fast buck," Toyota stresses their dedication towards customer satisfaction, again stressing their "commitment to quality & #8230; and respect for the planet." (Toyota global vision)
Toyota's downfall came due to their focus on competitiveness and on beating the race with minimal cost involved (Shirouzu, 2010). Quantity, in other words, preceded quality and the intent was to make as much money as possible for the company. Other sites of Toyota show that this focus on competiveness lingers. Their "Approach to Corporate Governance" for instance states that whilst their concern is to provide their stakeholders with "products that fully cater to customer needs," Toyota has "Toyota has introduced a unique management system focused on prompt decision making for developing our global strategy and speeding up operations." Their original preoccupations, in other words, of extending their empire and focusing on speed have not diminished.
On the other hand, they may have gained some lessons from the past in that they state too that they dedicate energies to "problem solving and preventative measures" and that their "approach is to build in quality through manufacturing processes, enhancing the quality of everyday operations." (Toyota.com. Corporate Governance)
Toyota also aims to polish its tarnished ethical reputation by having both in-house and out-house auditing adopting the Japanese Corporation Act recommendations as its model. In order to increase transparency of corporate activities, for instance, four of Toyota's seven corporate auditors are external auditors. In 2011, too, Toyota also established Regional Advisory Committees in major regions in order to consult with them on Toyota's activities. Finally, responding to the quality issues that tarnished their reputation in early 2010, Toyota established the "Toyota Special Committee for Global Quality" in March 2010 and the "Risk Management Committee in June 2010.
It has tried in all ways, in short, to implement a strategic management process that would reverse customer's opinion of their performance in 2010. They emphasize that their intention is "to ensure fair and transparent corporate governance by emphasizing frontline operations and multidirectional monitoring," in other words by imposing strategies, culture, and control / guidelines that would prevent a recurrence of dissatisfaction to their customers.
Do their strategies help them overcome their negative reputation?
Toyota is remarkably strong and resilient beating back challenge after challenge. Toyota's strategies have helped them to move forward somewhat and yet their recall in 2010 was followed by another recall in 2012. This despite all their assertion to monitor their quality and prevent further dissatisfaction. Nonetheless, the company that has achieved renown as one of the world's strongest brands of any kind did manage to fight through and win the global auto sales crown in 2012.
Earlier this month, the "Motley Fool" (March 6, 2013) evaluated the attractiveness of Toyota's stock and concluded that "Toyota is immensely strong, but challenges persist."
Toyota has worked its hind legs off at quality and its efforts seem to have paid success. The Motley Fool (March 6, 2013) reports that its "cars may not be the most exciting, but they are safe choices -- likely to last a long time, with minimal maintenance, while delivering good fuel economy" and Consumer Reports surveys once again rate the quality of Toyota to be at the top of the heap. More so, a recent study by Experian found that Toyota had regained the top spot in Corporate Loyalty for the first time since the third quarter of 2009.
Toyota has stressed that is efforts towards safety are global and, indeed, research discovers that such is the case. Toyota promised; it delivered. In Indonesia, for instance, Toyota's Avanza is the runaway best-seller, and in South Africa, three of the top five sellers are Toyotas. Over and again, the quality has been proved and there have been, in these countries, no recall. Toyotas' success in Indonesia and in South Africa has been replicated in others.
Europe seems to be one exception where sales are low, but this may work to Toyota's advantage since their competition is steep here (mainly Ford and GM), and the recession hampers discretionary spending limiting the consumption of cars). GM and Ford both suffered, so Toyota's decision to steer clear from Europe is prudent.
Toyota did have massive global recall of over 7 million vehicles in October of 2012, including 2.5 million cars in the U.S. This was in order to repair a faulty power-window switch that could be a fire hazard. Some observers were concerned that this would dip Toyota's shares reminding customers of previous shortfalls. Nothing happened. On the contrary, customers were delighted with Toyota's honesty.
Political conflict in Asia did cause loss of sales for Toyota on those islands, but the loss was external to their operations and was disconnected from their strategic management principles or forms their ethical resolutions.
In 2010, Toyota suffered a number of shortfalls that caused it to recall a huge number of its vehicles and tarnished its reputation. The Japanese giant, long the industry's mentor for automotive product quality and manufacturing efficiency, had surrendered to producing a spate of cars at minimal cost and focusing on speed, cheapness, and quantity as opposed to quality. These actions tarnished their reputation and negatively affected the safety of their cars.
To restore their name, therefore, Toyota set about implementing a series of control and strategies that would guide their culture and strategic management process. They adopted seven principles for global guiding culture and a further five principles for their internal culture. They also adopted the Japanese Corporation Act as their model for integrity and, in 2010, established both the…