The Philosophy of Toyota Organization - Case Study Example

Running Header: Review of an Organization Student’s Name: Instructor’s Name: Course Code: Date of Submission: Review of an Organization This essay reviews an organization and shows its history and how it has evolved over time to become what it is today. The paper discusses how and why the organization was founded and who its founder or founders were. It further analyzes the philosophy of the organization and reviews its goals and objectives. The essay also outlines how the organization uses the system of international organizations to achieve its objectives. History of Toyota, Why and How it was Founded and Its Founder For the purposes of this essay, the company under review is the Toyota Motor Corporation in Japan. Toyota is an international motor company that has one of the most interesting histories. The Toyota Motor Corporation is simply referred to as Toyota. Toyota is a multinational automobile maker that has its headquarters in Aichi, Japan. The birth of Toyota dates back to 1924 when Sakichi Toyoda invented the first Toyota Model G automatic loom. In 1929, the automatic G loom patent was sold to the British by Sakichi Toyoda as stated by Fujimoto (1999). That was when Toyota established the Toyoda Automatic Loom Works Limited. It was after the success of the first Toyota Model G automatic loom. In 1930, Kiichiro Toyoda, the son of Sakichi Toyoda of the Toyoda family, began to conduct extensive research on small gasoline powered engines. His research was successful because he was able to invent a small engine that would power great machines just by using gasoline. This idea was fully exploited three years later in 1933 when Toyoda launched an automobile department within the Toyoda Automatic Loom Works Limited according to George (2002). Toyoda got to serious automobile business in 1933 after the establishment of the automobile department within its factory. It began compiling precepts of motor vehicle models that it wished to develop and in 1935, the process was complete. Toyoda began working on its first motor vehicle, the AA sedan which was completed in 1936. This saw Toyoda enter the passenger car market. It was during this time, in September 1936, that Toyoda held a nation-wide competition in search of its company logo as argued by Hino (2006). Toyoda intended that the new logo should emphasize the speed in its production process. It received over 27,000 entries and the winning logo was the one that had the Japanese name Toyoda inside a circle. Toyoda changed its name to Toyota in 1936 when Risaburo Toyoda preferred the name ‘Toyota’ to ‘Toyoda’ because it used less brush strokes to write using the Japanese letters. Risaburo had married into the Toyoda family and had not been born with the name Toyoda, and so it was easy for Risaburo to change that name as illustrated by Hayashi (2008). The Toyota Motor Corporation was officially established in 1937 as a fully independent automobile manufacturer. The Honsha automobile plant began its operations in 1938 with the launch of the Just in Time system on a full-scale basis. Toyota ventured into the production of steel in 1940 with the establishment of Toyoda Seiko Limited, currently the Aichi Steel Works. It launched the physical and chemical research institute in the same year. The company continued to venture into numerous business operations in the 1940s such as the establishment of Toyota machine works limited in 1941 that saw the production of AE passenger cars. The Tokai Hikoki company was established in 1943 to produce AC passenger cars and KC trucks as stated by Liker & Morgan (2006). This was followed by the launch of the Toyota Shatai Kogyo company that is currently the Toyota Autobody Company. It ventured into production of electronics in 1946 with the establishment of the Kanto electric manufacturing company. In 1949, Toyota ventured into the production of rubber with the establishment of the Nagoya rubber company. Year 1950 saw Toyota experience many problems such the financial crisis that rocked the company. This saw a lot of labor disputes from the workers of the company who demanded to be paid their dues. There were a lot of voluntary retirements from the disgruntled workers in protest of the poor working conditions that were experienced at that time. In an effort to revamp itself, the Toyota Motor Corporation established the Toyota Motor Sales Company Limited. It began the suggestion system an year later with the launch of its new system where suggestions, views and opinions were welcome from the general public. It continued to venture into other businesses in the 1950s such as real estate as stated by Liker (2004). Year 1955 saw the launch of the Toyopet Master, Toyopet Crown and Crown Deluxe. This was a landmark in the production history of the company because it was able to produce high quality vehicles that began being exported to other countries like the United States. The next couple of years saw Toyota establish many production plants and the signing of the joint declaration of labor and management in 1962. It won the Deming award for quality products in 1965 and launched Corolla in 1966. In 1967, it entered into a business partnership with Daihatsu. The Toyota Foundation was established in 1974. Production and sales were intensified and the merger of the Toyota Motor Corporation and Toyota Motor Sales Company according to McGrath (1996). Toyota began manufacturing in the US in 1988 and the following year saw the launch of the Lexus brand in the US. In 1992, Toyota began production in the United Kingdom. The first mass produced hybrid vehicle was the Prius, which was launched in 1997. It started to realize huge profits with the sale of over 100 million vehicles. Currently, Toyota still has its headquarters in Aichi, Japan. As of 2010, it had employed over 317,734 people all over the world. It has branches all over the world in every continent. It has grown over time to be the largest automobile manufacturer in the world in terms of production and sales. It produces the widest variety of vehicles for different purposes. It has been ranked severally as the top performing company by different business analysts as argued by. This has been because of the various business strategies it has employed over time Parkinson (2007). These include the lean manufacturing which saw the company engage in production that eliminated wastes. Generally, Toyota can be said to have its roots in Sakichi Toyoda. He started small business ideas that saw his son Kiichiro Toyoda invent the first automobile engine powered by gasoline. It was through this idea that Toyota is what it is today. Kiichiro Toyoda is therefore considered the father of Toyota as argued by Reinertsen (2000). Toyota was started as a small producer of looms for the clothing industry. Its founders were interested in earning a living for their families and they had no idea that the company would grow to what it is today. The reason for establishing the organization was only to make profits to cater for the needs of the Toyoda family members. Philosophy and Vision The Toyota Industry fraternity is guided by basic corporate philosophies. Some of these philosophies include respect for the law. All of the Toyota industries strive to comply with the law whether inside Japan or outside Japan. They do this by ensuring that they are fair and transparent in their dealings. Another philosophy of Toyota is respect for others. Toyota is determined to respect the diversity of different people, their cultures and traditions in every country or region that it operates as stated by Liker & Meier (2006). It strives towards promoting the economic growth of these countries. Among Toyota’s philosophies also includes the respect for the natural environment. Toyota has ensured that through its corporate activities, it works to promote good living conditions and social prosperity. It aims at offering services and products that are always clean, of high quality, safe and environmentally friendly. Toyota also believes in respect for its customers. Their industries conduct product research and developmental activities in a bid to ensure that new values are created for its customers. The other philosophy of Toyota it respect for its employees as stated by Liker & Meier (2007). Toyota believes in nurturing its employees’ talents and inventiveness. Toyota seeks to create co-operation among its employees so that they can work towards helping the Company to realize its full potential and maximize tis profits. The main vision and philosophy of Toyota since it was founded has been to enrich the society through the cars it makes. Objective of Toyota Toyota, being an international organization, has many business related objectives. The main objective of Toyota is to dominate the world in terms of supplying quality and reliable cars. It aims to become the market leader in the provision of high quality vehicles and to satisfy its clients with a range of high quality products. The general objectives of the Toyota Company are to improve quality, minimize costs, enhance efficiency and increase productivity as illustrated by Ishikawa (2006). The company has ensured that over the years, it remains committed to putting a lot of effort in achieving its objectives. The company seeks to achieve its objectives by investing in quality human resource. It believes that for the customers to remain satisfied, the team of staff must be quality conscious. It uses the philosophy of Kaizen so that it can ensure continuous improvement of its products and services. Strategies in Using the System of International Organizations For Toyota to remain the market dominator, it has had to employ various strategies that have ensured that it has remained successful. It has developed fourteen principles that are popularly referred to as the ‘Toyota Way’. The first of these strategies is that Toyota bases its management decisions on long term philosophies as argued by Hoseus (2008). This was to be done even at the expense of the short term goals. This means that Toyota develops long term philosophies that are used to guide it in its operations. The other strategy that Toyota uses is the creation of a continuous process that will be used to bring the problems it has to the surface. The process that should be developed is used to ensure continuity in the operations of the company. The third of Toyota’s strategies is to use the pull system to avoid over production. This system is meant to produce only what is not needed and leave out what is unnecessary as argued by Poppendieck (2006). The fourth strategy used by Toyota is to level out the workload. This entails equal and fair workload distribution so that the workers are not overworked. The fifth strategy is to build an effective method that can be used to stop and fix problems of the company immediately they are discovered. This will ensure that quality and consistency are maintained throughout. The sixth strategy used by Toyota is the standardization of tasks, duties and responsibilities so that the foundation for continuous improvement can be provided. By doing this, employees also feel empowered and motivated and this is quite advantageous to the company. The next strategy that is employed by Toyota is the use of a visual control system that can detect any problem so that no problem remains hidden. The eighth strategy that is used by Toyota is the use of reliable and thoroughly tested technologies that serve to make the people satisfied and the processes effective as argued by Imai (1996). Toyota also believes in developing exceptional people and teams of people that will be proud to follow the philosophies of Toyota. The processes that Toyota employs are based on technology that is reliable and thoroughly tested. Another strategy that Toyota uses is to respect the network that it has built of extended suppliers and partners by providing them with challenging opportunities that will help them to improve and grow. In conclusion, the Toyota Company is a force to reckon with. It has remained effective ever since its inception very many decades ago. The organization aims at becoming the world leader in the supply of reliable and high quality motor vehicles. It has become an organization that very many other organizations are learning from and can copy what it is doing so as to remain effective and highly successful. All the decisions made at Toyota are done so in consultation of every member of staff and in consensus. Decisions are made after being carefully thought out and they are implemented rapidly. It does all these by aiming to grow and still maintaining peace and harmony with the society, the people and the environment. References Fujimoto, T 1999, The Evolution of a Manufacturing System at Toyota, Productivity Press, Japan. George, M 2002, Lean Six Sigma: Combining Six Sigma Quality with Lean Production Speed, McGraw-Hill, New York. Hayashi, N 2008, Top Engineer Explains How Toyota Develops People, Business Online, Nikkei. Hino, S 2006, Inside the Mind of Toyota: Management Principles for Enduring Growth, Productivity Press, Tokyo. Hoseus, M 2008, Toyota Culture: The Heart and Soul of the Toyota Way, McGraw-Hill, New York. Imai, M 1996, Kaizen: The Key To Japan’s Competitive Success, McGraw-Hill, New York. Ishikawa, K 2006, Guide to Quality Control, Asian Productivity Organization, Tokyo. Ishikawa, K 2005, What Is Total Quality Control? The Japanese Way, Prentice Hall, Chicago. Liker, J. & Meier, D 2007, Toyota Talent, McGraw Hill, New York. Liker, J. & Meier, D 2006, The Toyota Way Fieldbook, McGraw-Hill, New York. Liker, J. & Morgan J 2006, The Toyota Product Development System, Productivity Press, Boston. Liker, J 2004, The Toyota Way, McGraw-Hill, New York. McGrath, M 1996, Setting the PACE in Product Development, Butterworth-Heinemann, Texas. Parkinson, C. 2007,  Parkinson’s Law, Buccaneer Books, Michigan. Poppendieck, T., 2006, Implementing Lean Software Development: From Concept to Cash, Addison- Wesley, London. Reinertsen, D 2000, Managing the Design Factory, Free Press, Michigan. Read More