Toyota Motor Corporation the effective management of people

Toyota Motor Corporation ( TMC )

Toyota Motor Corporation besides known as TMC is a Nipponese born company celebrated for its auto devising every bit good as supplying fiscal services and take parting in assorted lines of concern including lodging, IT and fiscal activities.

Over the old ages, TMC has become the largest auto fabrication in the universe ( runing in America, Europe, Asia, Africa and Oceania ) after General Motors and is the biggest in Japan bring forthing an estimated “ eight million vehicles per twelvemonth ” . ( Toyota Annual Report, 2009 )

Founded in 1937, its current name, TMC was incorporated in 1981. As of March 31, 2009 TMC ‘s capital totalled to 397.05 billion hankerings, ( Toyota Annual Report, 2009 ) and despite the current fiscal crisis, the company merely announced its first one-year loss in 71 old ages in May 2009.

Importance of Project Management

Many administrations use project direction in order to last in today ‘s fast changing environment and it is portion of the manner things are done in concerns as described by Heerkens ( 2007 ) .

In utilizing undertaking direction, companies translate both their schemes and aims into action because this brings alteration to administrations and giving the fact that alteration is about necessary if a company is to derive competitory advantage, this explains it multiple advantages including the followers:

Accomplishment of end is made possible and determination devising is based on more equal information, therefore doing coaction more focussed and oriented toward deriving competitory advantage.

Clear footings of mention allow employees understand their functions and duties and how these can associate to the company i.e. nonsubjective, range of deliverables, function, duties, construction and agenda wholly give a clear way of patterned advance in footings of what is expected from people, Dobson ( 2004 )

Prognosis of grosss and outgos is made possible by the allotment of budget. As a consequence, employees feel connected to the administration from the corporate degree where of import determinations are made, therefore easing an effectual direction.

Time restraints ( range, clip and cost ) and specific expertness are used as measurement tools therefore leting the linkage of HRM to engineering and the decrease of director ‘s work load whilst increasing efficiency in the workplace by standardizing HR procedures. As a consequence, job resolution is made easy and fast, Harris et Al ( 1996 )

In the organizational context, a hierarchal construction including the necessary measure for accomplishing the aims contribute in making the terminal.

Different attempts are appreciated and team members recognise the importance of undertaking direction by open uping it chief focal point. This finally leads to success and a thrust toward effectual direction of people which is a critical constituent of organizational fight as stated by Kerzner ( 2009 ) .

Because the success of any undertaking depend on the leading and motive manners of patrons who are experienced and guarantee effectual bringing, a sense of accomplishment is created for both employees and the administration.

Undertaking direction has served as tool to many large administrations in footings of invention and when covering with alterations in the concern environment, both employees and directors are able to witness the accomplishment of their several ends and that of the administration all in the same purpose to derive competitory advantage, Larson et Al ( 2006 )

The following subdivisions of this study discuss some of these advantages in the context of TMC.

Recruitment, Selection and Training of Personnel in TMC towards Market Advantage

The construct of employee resourcing is aimed at using people with the right accomplishments and attitudes for the administration. This appears to be acceptable in rule. But there is a inclination to construe it because directors tend to enroll people who have the same features as themselves.

Most of TMC ‘s senior executives are Nipponese work forces, whereas most successful western corporations employ more variously at the corporate degree.

In today ‘s modern administrations, cardinal issues include flexibleness, invention, creativeness and the success of administration is non likely to ensue from those who display similar features to those already in the administration. It can hence be argued that administrations which perform better are those who employ people that think for themselves and hold thoughts and behavior that are different from others

While this suggests the usual choice methods which require grounds of uninterrupted and verifiable employment really works against the administration that is seeking invention, TMC with its “ The Toyota Way ” of thin merchandise development and direction rules illustrates otherwise. ( Liker et al, 2004 )

So far TMC has been able to accomplish market advantage by maintaining up with it engineering and more significantly being in front of its rivals. In 1997, the company launched the Prius as the universe foremost mass-produced loanblend auto which was achieved through their people system. ( Toyota Annual Report, 2009 )

TMC ‘s system is centred on people from their enlisting and choice every bit good as their preparation and development in the company. “ The Toyota Way ” , as discussed by Liker et Al ( 2004 ) must be portion of their Deoxyribonucleic acid.

This construct has so far helped TMC accomplish it organizational fight. However, many abroad directors and applied scientists working for TMC have admitted working under excessively much force per unit area, Liker et Al ( 2004 ) . Others have embraced this and felt at place in an administration where they feel valued. Either manner, the inquiry remains whether TMC is an employer of pick.

TMC has late been accused of weak designed patterns with relation to the human resource as a consequence of the recent failure to descry proficient issues, Sullivan ( 2010 )

In Sullivan ‘s position point, wages and acknowledgment, preparation, hiring, the public presentation direction procedure, the corporate civilization, leading development, staff keeping and hazard appraisal wholly contributed to TMC ‘s ruin.

The company surely has a really strict engaging procedure and frequently merely recruit those who have had higher classs and are smart. But it can be argued that intelligence is n’t ever the cardinal, peculiarly in an industry that is influenced by altering engineerings and competition.

The purpose of enrolling should include doing the administration attractive to possible campaigners by being the “ employer of pick ” where people are non merely valued but want to be portion of the administration. This may be hard for TMC as being a Nipponese company involve following a civilization of bureaucratism which finally affects the construction of the company as a whole.

Introducing flexible on the job hours in the UK for illustration and where largely work forces are employed, engaging adult females could all help in this sector. Still, it remains director ‘s occupation to analyze the state of affairs and place alternate options in order to accomplish market advantage.

Armstrong suggested that larning programmes and developing strategies should be developed in order to increase employability both inside and outside the administration.

To cover with the challenges faced by preparation, TMC introduced “ thin preparation ” where all squad leaders work together to bring forth a new theoretical account.

When bring forthing Corolla for case, TMC brought a squad leader from each of their operating parts and together, they worked in 12 different assembly points around the universe which reduced the figure of working hours by 30 % . ( Toyota Annual Report, 2009 )

In add-on, the company has a web site that allows all its squad members to take portion in ego preparation Sessionss which include hebdomadal and location based preparations locations. ( TMC Sustainability Report, 2009 )

However effectual and efficient is this procedure of recruiting and preparation, the relationship between persons who are brought to work together is important to the intended success.


Teamwork is an of import facet of an effectual direction of people and hence represents a critical constituent of any procedure of undertaking execution.

It defines the relation between single and other external parties every bit good as being dependent on each other in their peculiar undertakings. There is dependability on the single capableness. ( Tarricone et Al, 2002 )

More significantly, squad members all have different accomplishments and each contribute toward the administrations ‘ societal civilization and vision. ( Gibson et al, 1980 )

Theories and Concepts of Teamwork

Tuckman ( 1965 ) presented a theory of four different phases of group development that he farther developed by adding a 5th phase after its popularity in 1970. The first four phases are represented by the counsel in the development and behavior of the squad members.

Performing Performing


Focus on the Task Forming

Ramping Ramping

Figure 3.1: The Different Stages of Group Development

Beginning: Adapted from Tuckman ( 1965 )

In the organizational context, the success of teamwork will depend on people ‘s ability to pass on within the squad every bit good as their committedness to accomplishing the undertakings in inquiry. Contrary to this position, a undertaking squad might hold different features which allow them to carry through their undertaking in conformity with the given clip and budget. Equally good as being to the full involved, squad members have to maintain their director aware of the issues, alterations, hazards and quality betterment.

Gibson et Al ( 1980 ) were inexorable that communicating and engagement are two different features and that all that affairs was the mark or undertaking that was required to be achieved by the squad.

The undermentioned properties were discussed by Tarricone et Al ( 2002 ) in the same involvement of happening out what represented a successful teamwork.

Properties of Team Work





Autonomy of communicat-ion and suggestion



To team

Team size

Committedness to squad and shared Goals

Figure 3.2: The Six Attributes of a successful Teamwork ( Adapted graph )

TMC and Teamwork

TMC refers to each of its employee as “ squad member ” . To them, doing clients happy is straight linked to how good they work together as a squad.

While this partially relate to Tarricone and Luca ‘s ( 2002 ) six properties of teamwork, peculiarly where squad work and committedness are concerned, people have different competences and as mentioned by Francis et Al ( 1979 ) , would n’t it be easier if everyone focused on their given undertakings? Or possibly TMC has found that taking attention of each other, Critchley et Al ( 1986 ) and esteeming each other is aboriginal.

We can still oppugn TMC ‘s communicating and feedback criterions because of the counsel they use from their enlisting to the preparation where strict regulations are used.

Harris et Al ( 1996 ) outlined this in stating that members must hold the right to show their feeling with respect to the work being carried out. Again, it is the direction ‘s occupation to non merely give equal way, but besides divide the occupation among the members while doing certain they are non merely following set regulations but lending separately.

It is clear that TMC challenges its employees. For illustration, the company believes that esteeming and swearing it people will finally intend that they will give 100 % of end product. They besides agree that everything ca n’t be done through machines and hence human force is of import. That ‘s why the company motivates it team members by swearing them and given them duty in order to carry through their aims.

However, being a corporate company involves holding low tolerance in footings of errors. TMC is presently at the Centre of monolithic allegations sing quality issues affecting their recent autos. They have taken actions to rectify these issues but could this be related to squad members working under excessively much force per unit area? Is TMC excessively consumer driven? Or possibly the civilization of the company which evolve around the Toyota Production system is in demand of restructuring. The fifth phase of Tuckman ‘s ( 1965 ) theory peculiarly represents this as being the split of the group after fulfillment of their intent. In Tuckman ‘s ( 1965 ) position, traveling on is helpful to the squad members as it creates a sense of acknowledgment.

What is obvious is that TMC understands teamwork and refers to it as its foundation. The following figure represents an illustration of how squads are formed in TMC.

Team Size

Team Member


Team Leader


Group Leader



Asst. Manager


Smallest Group


18 Thulium

Largest Group

5 Thallium

23 Thulium


Figure 3.3: Typical Toyota Organization – Assembly Operation

Beginning: Bill Constantino, former group leader, Toyota, Georgetown.

While other administrations use extremely skilled employees to happen solutions to twenty-four hours to twenty-four hours issues such as quality of merchandises, care of equipment etc, TMC ‘s system ( see figure 3.3 ) allows employees to make thing otherwise. Work groups are responsible for work outing jobs that occur and have many duties including transporting out monthly planning in progress for quality production, scheduling etc.

Another illustration of teamwork in TMC is where experts select two or three members depending on how many people are needed for the undertaking and each member has to larn every occupation to let rotary motion. The company believes that this manner no member gets the burden of work and the system runs swimmingly while actuating employees.

TMC and Change Management

The direction of TMC spotted the demand for alteration from an early phase and has of all time since been bettering the company ‘s productiveness, quality, client service etc.

The company cultivates the leading and squad ‘s manners change civilization every bit good as growing to invent the scheme of what they refer to as “ The Toyota Way ” or the 14 Principles of Management. ( Liker, 2004 )

This is besides explained by the “ 4P ” theoretical account of “ The Toyota Way ” ( Liker, 2004 ) , where he highlights the Philosophy, Process, People and Partners and Problem Solving as a manner of betterment and singularity of TPS. These 4Ps besides constitute the 14 rules of direction.

Figure: 3.4: A “ 4P ” Model of “ The Toyota Way ”

Beginning: Adapted from Liker ( 2004 )

However, alteration has its issues and most administrations begin to gain this when they are hit by competition or frequently bankruptcy. TMC experienced this in 1950 when the company encountered bankruptcy and began altering its civilization.

As recognised by Bridges ( 1995 ) with his transitional theoretical account of alteration, frequently dramatic alteration is needed in order to last in a competitory market topographic point. TMC accepted the challenge to last in the US market and started working towards the company ‘s vision by actuating and animating its employees. As a consequence of taking the planetary market, the company introduced the Prius in 1997.

Change is portion of TMC ‘s leading every bit good as being environmentally friendly when doing autos and despite the current crisis confronting all car shapers, TMC remains a leader deducing from alteration as their chief civilization.

Leadership and Motivation

Both leading and motive have emerged as some of the most of import facets of an effectual direction of people and referred to as two elements that complement each other.

In the twenty-first century, organisations are seeing leaders as those who set way, has clear vision, inspire and motivate squads in accomplishing undertakings. Once motivated, employees begin to prioritise organisational ends and civilization, therefore encouraging alteration and it attachment.

TMC ‘s Leadership Approach

TMC does n’t follow a set of regulations but instead exercises really alone values and attacks that set them apart from others. They believe in constructing employee ‘s strengths every bit good as edifice auto. ( Liker, 2004 )

Chemers, ( 1997 ) referred to leading as a common undertaking where people support one another. Hiebert et Al ( 2001 ) on the other manus associated leading with interpersonal relationship and corporate scheme.

At TMC, Managers involve their subsidiaries into the thought procedure which besides reflect portion of McGregor ‘s ( 1960 ) Theory-Y ( participative manner ) , and adjust themselves to state of affairss depending on the undertaking, or resources available which is reflected in Fiedler ‘s ( 1967 ) attack. Fiedler ( 1997 ) further highlighted the environment as being the principal factor that influences leading. He referred to this as eventuality theory and placed leading manners in two classs, task-oriented or relationship-oriented and state of affairss in “ high-favourable ” and “ low-favourable ” . He came to the decision that task-oriented leaders perform more efficaciously and that when the degree of state of affairs favourability was intermediate, relationship-oriented leaders performed better.

The leading doctrine at TMC can be represented by the 2-dimentional leading matrix of “ The Toyota Way ” , ( Liker, 2004 ) where leading manners have been divided into four types: Bureaucratic Manager, Group Facilitator, Task Master and Builder of Learning Organizations.

Again we can separate similarities here to that of the Blake and Mouton Managerial Grid ( 1964 ) where the organisation adult male director shows the ability to equilibrate between organisation ‘s ends and people ‘s demands. John Adair ‘s ( 1973 ) Action-Centered Leadership Model proposed that a good leader must execute following 3 chief duties.

Figure 4.1: The Action-Centered Leadership Model

Beginning: Adair ( 1973 )

A good leader in Adair ‘s ( 1973 ) point of position is the 1 who create balance between these three circles.

TMC achieves public presentation by giving importance to both production and people ( squad ) , but in making so people and production demands are left unrealized. This is about a elusive manner of stating people what to make as represented by the following graph.

Figure 4.2: The TMC Leadership Model

Beginning: Liker ( 2004, P. 196 )

Liker ( 2004 ) associated “ The Toyota manner ” with that of the administration that is constructing a “ learning administration ” which nurtures the abilities and motive degree of its squad and programs in front in order to acquire the maximal out of employees. This has so far resulted in them puting illustration to many administrations by adding values to their existing civilization.

The 4P theoretical account of “ The Toyota Way ” studied by Liker ( 2004 ) put people on the 3rd degree from the underside up along with long-run vision of the company ‘s ends and equal cognition of proficient and direction accomplishments.

This is all good but we can reason that the primary end every bit good as shooting that vision and cognition to people should besides include seting people at the really top since without them nil is possible. Such an attack will let employees to experience even more portion of the company, motivates them further and enables them to set a maximal attempt in order to accomplish a longer-term success.

However, at TMC, leaders encourage and respect place and determination doing capablenesss of their people working from the really bottom as many of them recognized holding started at the underside. ( Gertner, 2007 )

Deducing from Fiedler ‘s Theory ( 1967 ) and Adair ‘s Model ( 1973 ) , development of common trust and regard are really of import to TMC ‘s direction relation which is the primary key to HRM patterns in the twenty-first century. ( Toyota ‘s CSR Initiatives, 2010 )

TMC ‘s Motivational Approach

For most administrations, the ultimate end is to do the employees work at their full potencies and this can non be achieved easy as every person is motivated otherwise.

The construct of motive has been developed by many bookmans over the old ages. Fritz Heider ( 1972 ) developed two constructs of motive which were – Intrinsic and Extrinsic and which he believed were driven by the factors including employee ‘s ascription, beliefs and desires.

Similarly, Maxwell ( 2008 ) discussed motive factors where he associated demands, values and ends to people ‘s degree of production.

Figure 4.3: Employment Motivational Factors

Beginning: Maxwell ( 2008 )

TMC is invariably committed to doing betterments instead than merely reacting to jobs that occur. The direction develops friendly relationship within the squads and recognises their betterment. As a consequence, 94 % of thoughts in the company are adopted.

For a Nipponese company which guaranties life clip employment, this is an obvious outlook because it allows internal publicity and develops motive.

However, motive is a construct that changes with clip and research on dynamic motive carried out by Herzberg ( 1987 ) in his “ Double Structure Theory ” pointed out that the diverseness of motive distinguishes between incentives ( challenges ) and hygiene factors ( occupation security ) .

But how of import is occupation security in the twenty-first century? It is clear that being made redundant is no longer a menace and bigger administrations like TMC need to work harder in motivation and retaining their employees peculiarly in an age where competition and alterations in the environment are portion of their twenty-four hours to twenty-four hours lives.

Heider ( 1972 ) believed that intrinsic motive was driven by employee ‘s ain self-pride instead than fiscal wages which is frequently short lived and dearly-won, while the extrinsic construct was influenced by the exterior.

Other factors were studied by Maslow ( 1954 ) in his Need Hierarchy Theory where he highlighted human demands as being really of import and need to be satisfied if promotion was to be made possible. Agring with McGregor ( 1960 ) and Heider ( 1972 ) , Maslow found money the least of import.

TMC recognises employee ‘s engagement and money is n’t used as incentive. At least non from what we have seen from their enlisting, choice and preparation schemes and squad work construction.

For any undertaking execution intents, directors will necessitate to foster develop the procedure of working together by possibly understanding employee ‘s demands instead than those of the administration. This can help in advancing motive and hence adhere to the administration ‘s cultural deductions which are going more homogeneous in today ‘s concern environment. This besides presuppose an apprehension of employees ain civilization and context.

TMC and Cross-Cultural Issues

Taylor in the twentieth century, studied how employers can increase their workers efficiency and lessening waste, subsequently referred to as Muda by Japanese. TMC with their Toyota Production System champions this civilization every bit good as what the company refers to as Kaizen which means squad.

Although Kaizen happens to be the betterment of Toyota ‘s civilization, it differs from the doctrine of ‘Command and Control ‘ . The methodological analysis of Kaizen is based upon supervising consequences and doing alterations.

TMC employs the really best people and trains them on cross preparation issues. By making so, directors believe they are taking any jobs from the root. But people are different and being a planetary company implies using people who are culturally different. This therefore raises another concern about how diverse TMC truly is.

As earlier discussed, TMC is a planetary company still chiefly run by its Japan central office. Its top leading does non include foreign executives. This has resulted in slow job resolution of recent crisis of merchandise defects.

The National Highway Traffic Safety Administration ( NHTSA ) late stated that the bosom of Toyota ‘s issues lies in its close corporate civilization in Japan. ( Financial Times, 3rd March 2010, P. 22 )

The interesting argument on these recent quality issues which is linked to the cross-cultural preparation and audience factors is that TMC focuses on their ‘Kaizen ‘ construct, which is extinguishing jobs ; whilst Americans and other Western consumers focus on the ‘transparency ‘ construct which is based on the freedom of information.

Either manner, administrations can barely avoid errors. It is how directors address these issues that determine their hereafter.

So far TMC has proven its success derivation from its leading civilization which has resulted in:

Promoting invention and creativeness every bit good as developing new thoughts which are recognised by the direction.

Continuous enlargement leting TMC to research foreign markets and achieve stableness in the planetary economic system.

Efficiency and uniformity of the work force leting the care of a respectable degree of stableness and fight in the concern environment.

However, restriction of publicity prospect TMC might take to a demand to see utilizing more Entire Quality Management ( TQM ) which consequences in lifting cost for the company. This can besides make interior struggles sing the current rise in competition. Besides, TMC should be aware of the fright for disappearing of personal individuality on the employee ‘s side ; because the bulk of thoughts are adopted from employees. They are treated as a squad which limit their acknowledgment as single.

TMC and Diversity

Since the early 1990s, big administrations including TMC have recognised Diversity as being an of import facet of pull offing people and declared themselves as being committed to equal chances. ( Cockburn, 1991 )

Diverseness is reflected in TMC ‘s celebrated “ regard for people and uninterrupted betterment ” . Reichenberg ( 2001 ) referred to this as a position that made concern sense and the United Nations in peculiar has embraced this doctrine which further proves the company ‘s attempts.

However, being a Nipponese company involves certain degree of Bolshevism, which raises concern about TMC ‘s diverseness policy. Morrison et Al ( 1991 ) used Hofstede ‘s ( 2001 ) international cultural diverseness survey to show administrations relationship with their providers and clients and how these can be affected by diverseness. For case fiting client diverseness to that of the service offered will connote sing cultural differences which will take to parties “ talking the same linguistic communication ” .

This fits TMC because as stated by Lichtenthal et Al ( 2001 ) , the company benefits from fiting its gross revenues people to demographic properties of purchasers since purchasers are more trustful of those who portion similar cultural properties to themselves.

Directors frequently need something to travel incorrect in order to make up one’s mind that alteration is necessary and fix employees to get by with it. Claiborne ( 2001 ) discussed Toyota ‘s racialist advertizements and this lead the company puting out a $ 7.8 billion, 10-year diverseness plan.


We have seen that successful people direction comes through a procedure of choice, preparation, teamwork, leading, motive, engagement and engagement such that employees feel their demands and involvements are being suitably addressed. When combined with the administration ‘s ain demands for accomplishing efficiency and effectivity, this emphasises the demand for directors to supply leading which is characterised by both strong undertaking and relationship orientations.

Both leading and motive go manus in manus because for any signifier of undertaking to win, a leader with motivational accomplishments is needed in order to acquire consequences.

TMC is an first-class booster of Diversity and contributes in countries such as instruction, safety among immature people and plans such as Toyota Teen Driver, Mothers against Drunk Driving ( MADD ) , patrons events for non-profit organisations like YMCA, National Multiple Sclerosis Society ( NMSS ) etc.

However, in the twenty-first century, directors are faced with many other challenges including uncertainness and changeless alterations in engineerings which all affect the execution of undertakings and human resource development.

One ought to inquire if TMC has remained stock in the twentieth century with the classical thought where division of labor, span of control and line of authorization were pioneered by Fayol et Al.

This is surely reflected in the company ‘s squad work scheme earlier discussed. Besides, although employees have a monolithic input in TMC ‘s success, how far are they allowed to differ with the proposed end of the administration as discussed by McNabb et Al ( 1995 ) ?

Possibly the construction and success of TMC shows a different image which promotes a learning administration with their “ Thin Training ” and “ The Toyota Way ” . But how flexible is TMC when it comes to employees? And are the company ‘s leaders born or manufactured?

The reply finally lies someplace in the center as TMC has had mixed success narratives and the direction is able to supply the environmental support needed to actuate employees toward the accomplishment of their vision.

To take an equal alteration as proposed by Kotter in 1995 with his eight phase theoretical account, directors are faced with understanding the importance of employees need, vision, communicating, authorization and civilization.

Implementing undertaking will therefore affect the designation of the micro-processes that affect the twenty-four hours to twenty-four hours formal and informal life of employee, Cornelius ( 2003 ) . Or with respect to alter direction, there need to be a clear line between people and the administration as proposed by Fisher,2005.


As discussed, directors are faced with several issues when covering with execution of undertakings in general. Making these issues manageable will necessitate TMC to rethink its construction and degree of control when it comes to team work.

It could be that the Nipponese civilization which is frequently excessively reliant on employee ‘s attempts needs a different leading manner which will let the company to run into international competitory demands as they affect the administration ‘s overall success.

In footings of get bying with the disruptive external environment, TMC should possibly see recognizing persons for themselves instead than the group. They can get down this alteration in African states where they have a little per centum of market portions.

TMC promotes many of its current employees from inside the company. While this is good for maintaining the company ‘s visions and values, using directors from outside might ease obtaining more unfastened minded and end oriented employees.

This is peculiarly needed now when inquiries are being raised about TMC ‘s public relation and image due to the company ‘s recent defect issues.

Leave a Reply

Your email address will not be published. Required fields are marked *