Change management of Toyota and Nissan - Essay Example

?Contemporary Issues in Management The Management of Change Table of Contents Table of Contents 2 Overview 3 Discussion 4 4 Reasons for Change 4 Change Management Process 7 Problems and Successes 11 Conclusion 14 15 References 16 Overview Change management is referred as a controlled approach employed to deal with changes both from the discernment of a human being or an organisation. It is a realistic method which involves altering individuals, teams, and organisations from an existing state to the preferred or future state. It is a managerial practice which intends to help employees in acknowledging the changes in their current industry environment. A change process or change management process is a set of actions that helps a group of members to control the specific change efficiently. The change process facilitates to trace the change requests, to evaluate and to endorse the requests, before execution. This mechanism eases the process of alteration. However, change is present in both personal and professional lives. Therefore, change management is the process which is utilised by organisations so as to accomplish their prospective goals. Change management process utilises varied tactics and procedures in order to achieve final objectives. Moreover, the process of change can be implemented effectively only if members coordinate and accept the change in a positive manner. It is the liability of the employees to manage change in such a way so that it enhances the effectiveness as well as provides inspiration and augments morale of employees of an organisation. Along with the employees, the superiors of an organisation are also responsible for proper adoption and implementation of changes. This can be done only with the help of proper communication and harmonisation among the employees of organisation. Proper management of a change can augment dedication and motivation of the employees towards work thereby improving productivity, firmness and profitability of organisation (Nakae, 2005). Hence, it can be avowed that change management is one of the significant systems utilised by organisations so as to retain and cope up with the cultural challenges of the current scenario. Change management is a practice utilised for sustaining in the global environmental conditions among other competitors in the long run (Fahy & Cunningham, 2007). The assignment mainly provides a concise understanding of the prime reasons for change, change management process adopted and the problems faced by the members of the organisations after adoption of the change. The organisations selected for the assignment are Toyota and Nissan. Discussion Change management is the process of scheduling, executing and evaluating of changes so as to cope up with the exigent environment. In order to sustain in this competitive environment, change is essential, so the practice of change management is also mandatory. The procedures of change management are mainly utilised so as to improve the level of potentials of employees and productivity along with development of new tactics, techniques and management systems. Change management process occurs due to diverse reasons in assorted organisations but in this assignment, internal issues related to human resource are predominantly highlighted. Reasons for Change Nissan Motor Company Ltd is one of the leading car producer organizations of Japan. It is a reputed trade name in the sector of automobile, and markets its cars with the brand name Datsun. It came into existence in the year 1934. Since then, Nissan Motor Company Ltd is adopting and accepting variety of changes in order to retain a reputed brand image in the competitive market of Japan. Moreover, in order to retain its uniqueness in the market among other competitors, change management is essential. However, in order to retain its market share and sustainability, Nissan Motors tied up with two other reputed automotive giants named Daimler and Renault (Renault, 2010). The prime objective behind this international collaboration is mutual distribution of expertise and development expenditure related to the manufacture of new electric cars (Nissan, 2010). This is a kind of technical, financial and planned approach generally utilised so as to retain the profitability and corporate image among others in the international market. However, in this type of global collaboration, the prime aspect which is ignored is human capital i.e. employees. An international alliance of this type, with diverse national and corporate employee culture, leads to intercultural diversities which results in cross cultural misinterpretation. As a result, tension and conflict can occur among the co-members thereby deterring the coordination and communication. Moreover, this type of cross-cultural conflict typically leads to lack of integration, motivation, employee morale thereby hampering the productivity and the profitability of the organisation. This type of disagreement occurs when a member of an organisation is found to be incompetent to adapt with the cultural diversities of the other organisation (Nissan, 2011). Consequently, it hinders the organisational objectives, which is the prime motive of any global partnership. Moreover, it also impedes the identity of the brand in the international market thereby lowering customer loyalty and dependability. Hence, it can be affirmed that in order to administer the issue related with cross-cultural assortment, it is essential to adapt a change management process. Similarly, the need for change management process is also observed in the other company named Toyota. Toyota Motor Corporation (TMC) is an international automobile producer of repute. Its headquarter is situated in Toyota City, Japan. The company was established in the year 1937 as a spinoff from its parent group ‘Toyota Industries Corporation’. TMC is mainly identified in the market for its world-class automobiles. Inspite of its brand image and status, TMC implemented change management process so as to endure in this aggressive and varying market scenario. The financial recession of 2008-2009 changed the entire market situation, which significantly affected the sales and the profitability of TMC. Moreover, the growth of TMC was also hindered due to the changed market conditions (Toyota Motor Corporation, 2011). The aim of Toyota was to sell 10 million automobiles per year since 2010. However, due to the financial crisis of 2008-2009, it endured a stern setback. Toyota’s intial forcast of vehicle sales in 2008 and 2009 were 9.85 million and 10.4 million respectively but due to financial crisis it could sell only 7.81 million vehicles in 2009, which was quite disastrous for the organisation. As a result, TMC encountered a loss of US$4.61 billion in 2008. Due to the financial crisis, TMC faced the first biggest catastrophe, after commencing its operations in the market (Hays, 2011). Moreover, due to financial crisis, material costs enhanced, thereby dwindling the sales in automobile sector. As a result, due to reduction in the sales of car, total revenue lowered leading to surplus productions (London Stock Exchange, 2009). Thus, in order to retain its market share and corporate image in the international market, TMC decided to tie-up with the other branded multinational, Tesla Motors Inc of the United States in the year 2010 in order to produce electric cars. Tesla Motors, Inc. is a corporation which mainly creates, manufactures and sells electric cars and electric vehicle powertrain machineries (Technology Partners, 2010). Tesla Motors achieved extensive attention by producing the Tesla Roadster, the first fully electric sports car (Becker, 2009). Both the companies i.e. Toyota and Tesla used Tesla's technology for basic parts such as the battery system and motor. However, the worldwide affiliation provided a cultural shock to the employees of Toyota (Technology Partners, 2010). Therefore, due to cultural diversities, the harmonisation and communication among the employees had hindered, resulting in decline of productivity and profitability of the organisation. Hence, in order to manage this change, a procedure of change management had executed by the organisation of Toyota. Therefore, it can be affirmed that change management process is essential for every association so as to cope up with the changing circumstances (United Nations Industrial Development Organization, 2009). Change Management Process Change management incorporates varied organisational tools and skills which improves employee self-esteem and efficiency thereby improving the productivity of the organisation. The procedure of change management is adopted so as to handle the varying changes in order to enhance the competence and prosperity of the organisation. Thus, change management method was accepted so as to change the corporate culture of the organisations. In order to cope up with the cultural diversity which occurred in Nissan Motors due to its international tie-up with Daimler and Renault, the strategy of corporate governance was implemented. Corporate governance is the method which is utilised to direct and to control the operations of an organisation. It involves uniform dealings among the company’s management, its board, shareholders and other stakeholders. This can be possible only through proper organisational culture within organizational hierarchy. Moreover, corporate governance is one of the significant approaches utilised to maintain an effective corporate culture of the organisation (ITAR-TASS, 2012). Corporate governance can be adopted only if the employees maintain apposite communication, coordination and devotion so as to accomplish the common organisational objectives. Hence, proper employee commitment would enhance the productivity resulting in upgradation of corporate image among others in the market. Therefore, enhancement of corporate image would also augment the lucidity of the business among the stakeholders in the market. Thus, the implementation of corporate governance was necessary for Nissan to accomplish its mutual community responsibilities. Nissan maintained a high level of organisation eloquence thereby revealing the business goals and guidelines to the stakeholders basically to enhance the bond and reliability among themselves. In addition, it was used so as to enhance the trust of the stakeholders (Nissan, 2011). Apart from this, in order to maintain the uniform culture, cross cultural awareness training courses for international management were wittingly designed to generate the cross cultural receptiveness among the employees and management so as maintain consistency among the hierarchy of the organisation. It helped to craft a communal culture that offered new values and policies which augmented this image of the international partnership. Moreover, it also enhanced the growth and profitability of the organisation among others in the international market. In addition, it also helped to reduce the inter-departmental disagreements resulting in coordination and synchronisation among the employees. Hence, it can be affirmed that corporate governance and cross-cultural training courses acted as a boon for making the international partnership fruitful. Similarly, in order to decrease the cross-cultural diversity occuring due to the affiliation between Toyota and Tesla, cross-cultural training programs were offered to the employees. The prime objective behind this training workshop was to improve the harmonisation and coordination among the employees of the organisation. The training program of Toyota was participative in nature which mainly included strong work relationships, motivation, mutual associations, communication, inter-personal dealings, sharing of knowledge, ideas and beliefs and experiences so as to enhance the productivity of the organisation. This would also augment the employee confidence and loyalty towards the work resulting in improvement of the efficiency and effectiveness. Hence, uniformity in the corporate culture is one of the vital aspects which is accountable for improving the relationship with the customers and stakeholders. Besides, if training workshops were not implemented then cultural diversity might prove detrimental as well. Cultural assortment may also lead to conflicts among the co-members thereby affecting employee morale and dedication towards the organisational yield. In addition, employee conflict could have affected corporate image and brand distinctness among others in the international market. Thus, it can be depicted that cultural diversity is one of the imperative issues which should be handled adeptly so that it can be utilised as one of the potencies of the organisation. Hence, the change due to workforce diversity can be abridged only through proper change management practices of training and development workshops. Thus, cross-cultural diversity was one of the noteworthy contemporary problems of recent times for both Nissan and Toyota. Problems and Successes In this era of globalisation and industrialisation, the process of change management is essential to sustain in the aggressive market scenario. Moreover, change management process is a method utilised to effectively accept and adopt a particular change so as to make it beneficial for the employees and the organisation. Besides, cross cultural clashes in international partnerships may also result in lack of integration among the members of organisation. This mainly occurs due to incapability of employees to adopt the corporate culture of another organisation, as a result, employee morale and confidence get hampered. This reduces the dedication of the employees towards the work consequently and the profitability and productivity also diminishes. Thus, in order to deal with this issue, human resource restructuring took place with the help of corporate governance strategy. Along with cross-cultural awareness, training workshops were also executed so as to reduce cultural diversity. Hence, it enhanced the brand consciousness and the corporate image of Nissan Motors among others in the worldwide market. Resistance towards the occured change was not much observed in case of Nissan, as apropriate measures were taken by the organization. Moreover, due to the international affiliation on 07th April, 2011, sales as well as profitability enhanced. Nissan Motors supplied 7.28 million vehicles to its consumers as compared to 2010 thereby escalating the sales by 14.4 percent. Moreover, the returns of Nissan Motor Co. Ltd. for the full year 2011 was $3.4T. Consequently, the share price of Nissan Motors also improved which enhanced the corporate image as well. In fiscal year 2011, the volume of the business was predicted to increase by 4.7% on a worldwide perspective (The Financial Times Ltd, 2011). Hence, from the above discussion, it is apparent that the partnership acted as a boon for Nissan Motors. Apart from Nissan Motors, the other significant example of partnership which proved successful was that of Toyota and Tesla Motors. Similarly, due to the economic crisis of 2008-2009, the vehicle sales of TMC declined from 10.4 million to 9.7 million. Although, Toyota originally forecasted a sales of 9.85 million and 10.4 million in 2008 and 2009 respectively but it traded only 7.81 vehicles in 2009, which was 13 percent lower than the preceding year (Bloomberg Businessweek, 2008). Thus, in order to handle this competitive situation, Toyota joined with Tesla but cultural diversity hindered the motivation of employees. Moreover, as a result of partnership, the manufacturing plant of New United Motor Manufacturing, Inc (NUMMI) was shutdown which resulted in elimination of large number of workers (Toyota Motor Corporation, 2011). This lowered employee morale and commitment towards work thereby lowering the efficiency of organisation. Therefore, in order to diminish the cultural diversity, cross-cultural training workshops were conducted so as to enhance employees’ relation, motivation, communication and commitment thereby diminishing conflict among them. Along with this, advanced automotive guidance courses were also offered so as to improve the efficiency and effectiveness of workforces. Apart from this, the quick decision of reopening the NUMMI factory in Fremont, California so as to manufacture model S electric cars, amplified the self-confidence of workers resulting in improvement of organisational profit. Moreover, it also improved the dedication and enthusiasm of employees towards work resulting in augmentation of earnings of TMC (Toyota Motor Corporation, 2003). Hence, cultural diversity is one of the vital aspects of TMC which improved the corporate image and uniqueness of its products among others in the market. After the partnership, revenue increased by 19.0 trillion Yen in the fiscal year of 2010. The sales also enhanced by 4.87 trillion Yen, which was up by 27% in the year 2010. In the year, 2011, Toyota’s net earnings were 9,678 billion yen, or $1.2 billion USD, which means a 15% increase as compared to the same period of the previous year i.e. 2010 (Hays, 2011). Thus, it can be affirmed that the partnership of Toyota and Tesla proved rather successful which helped to enhance the market share and the profitability among others in the international market. Hence, from the above discussion, it is evident that the partnership of Toyota and Tesla boosted the market share as well as enhanced the awareness of customers and stakeholders. Apart from this, with the help of sutained commitment, Toyota has become one of the world’s largest and well known manufacturers of automobiles among others (Toyota Motor Sales, 2011). Hence, it can be avowed that cultural diversity is an alteration which can be managed only through proper change management process. Thus, cultural workforce diversity is one of the fundamental contemporary issues of modern times, which can be achieved only with the help of change management practices (Chicago Tribune, 2011). Conclusion Conclusively, it can be revealed that change management is a vital approach which is utilised in order to handle the modern day’s contemporary issues so as to sustain in this competitive world. It is a realistic approach which engages alternative methods and techniques so as to adopt any specific change in a successful manner. As transformation is an incessant process, so the practice of change management is also essential in any organisational situation. Thus, change management practices should be implemented so as to adopt and execute the alterations in a prosperous manner. This is necessary for any organisation to sustain in the long run among others in the international market. In this assignment, the issue of cross-cultural diversity is discussed in a detailed manner which raised in two automobile organisations namely Nissan Motors and Toyota Motor Corporation as a result of partnership. Thus, it is apparent that the issue of cross-cultural diversity can be reduced only through cross-cultural training workshops which help to enhance uniformity and consistency among employees of organisations. Apart from this, cultural uniformity also improves the commitment, devotion, communication, harmonisation and motivation towards work as well as other employees. As a result, the productivity and the profitability of organisations increased resulting in enhancement of corporate image. Thus, it can be depicted that cross-cultural training improves the attitude and understanding of employees towards varied cultural norms and policies. Hence, varied cultural knowledge and information help in augmentation of the research and development thereby producing innovative products and services to the customers. This enhances the contentment of the customers which subsequently augments the reliability and loyalty of the consumers and stakeholders. In addition, many new customers are also attracted due to the inventive features of the products at reasonable prices among others in the market. This can improve the sustainability and growth of organisation in the long run. 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