Toyota Company - the Environmental Audit - Literature review Example

?Toyota Company: The Environmental Audit Introductory Context People all over the world today seem highly concerned about their health and environmental sustainability more than ever before. Hence, they tend to discourage all business ventures that raise potential threats to ecological balance. Firms also give specific focus on environmental sustainability, and try to develop more eco-friendly products today. This paper tends to explore more about the changing business environment in which Toyota operates. This analysis of the current trends in the business environment would benefit the company to design further green marketing opportunities. Firstly, the paper will identify the different drivers creating awareness of environmental damage. Secondly, the paper will describe Toyota’s current ‘green’ policies along with supportive evidences. Thirdly, the paper will discuss how effectively the organisation has developed and executed green policies. Finally, the paper will recommend the Toyota management on how the organisation can improve its marketing mix by developing further ‘green’ strategies involving its products and markets. A standard research method has been used for this study, including secondary information and principal sources. The hypothesis is that modern customers give great emphasis on environmental safety while considering the purchase of automobiles. 2. Literature Review Evidently, external and internal drivers force Toyota to become more environmentally focussed. The external drivers mainly include government policy and legislation while cost savings, business ethics, sustainability, and public relations constitute internal drivers. However, internal drivers are stronger than external factors in forcing the organisation to develop and implement improved green strategies. The organisation is still in its growth phase and therefore Toyota management strives to improve its corporate social responsibility policies. External drivers While analysing different legislative systems, majority of the national governments impose strict restrictions on automobile manufacturing industry as this sector is accounted for a notable percent of the total global pollution. Combustion of fossil fuels in vehicles causes emission of large volumes of CO2, which is an important green house gas contributing to ozone layer depletion and thereby global warming (OECD, 2001, p.173). As Cleff et al (2004, p. 157) point out, the European Union has imposed a set of tough restrictions on its automotive industry in order to promote environmental sustainability. The authors opine that such restrictions would foster competitiveness and technological innovations in the automotive sector in addition to promoting environmentally friendly operations (ibid). Internal drivers Business sustainability is one of the major internal drivers which forces Toyota to pay specific attention to environmental safety. As discussed earlier, people today reject environmentally threatening products regardless of their superior features. Hence, automobile manufactures would be thrown out of the market if they cannot successfully develop eco-friendly vehicles. Obviously, Toyota also is compelled to adapt to new market trends that promote environmental sustainability. Costs saving strategies encourage Toyota to become more environmentally focussed. For instance, people’s growing awareness on electric and solar vehicles may assist the company to trim down its product promotion expenses. Similarly, environmentally friendly operations would aid the company to eliminate unnecessary fines arising out of environmental policy violations. Ultimately, such an operation may assist the company to provide its customers with some price benefits as well. According to marketing mix concept, price is one of the major determinants of a product success, which also drives the company to give more focus on environmental management (Lecture note). Business ethics and public relations are other internal drivers influencing the organisation on the promotion of environmental balance. Goodman and Hirsch (2010, p. 71) reflect that majority of the multinational organisations consider corporate responsibility as an integral part of their business, and specifically emphasise environmental sustainability by implementing different safety projects. Undoubtedly, every organisation has a social responsibility to its nearby communities (ibid). Since safe environment is a basic right of each individual, Toyota is very vigilant to ensure that its operations do not damage the environment. Referring to Academy Of Management Executive (cited in Bradbury & Clair, 1993), eco-friendly operations would assist an organisation to add value to its market reputation and public relations. The Toyota’s management strongly believes that environmentally focussed supply chain activities can have a positive influence on the company’s public relations. In short, all the internal drivers are centred on business promotion. Evidently, corporate responsibility programs and public relations would assist the company to improve its marketing efficiency (Lecture note). Toyota’s current green policies As per the Toyota’s European sustainability report 2010 (Toyota, 2010), the organisation proposes to achieve environmental leadership throughout its vehicle life cycle. In addition, Toyota has appointed special executives to reduce the environmental impacts of the company’s activities at each stage of its product life cycle (ibid). The company specifically works to reduce greenhouse gas emissions, especially CO2 emissions. The company has developed an extensive waste recycling mechanism by which the company tries to recycle every waste product it produces (ibid). To illustrate, Toyota in Action (cited in Toyota Motor North America, Inc , 2011), Toyota’s engine assembly factories attained “zero landfill status” on the ground of its waste recycling efficiency. In addition, the Toyota management greatly focuses on reducing energy consumption in order to cop up with the growing energy demands. According to Energy Star, for its sustained excellence in energy management, the Toyota won the 2011 Energy Star Award (U.S. Environment Protection Agency, 2011). 3. The Analysis Toyota’ global operations clearly indicate its great progress in green policies. Toyota gives great emphasis on several aspects of environmental safety. According to a poll conducted among readers of TheGreenCar (n.d), Toyota was elected as the “Green Car Manufacturer of the Year 2008”. Recently, the company achieved notable achievements in the field of environment management. Since the increased global energy consumption and CO2 emissions are the primary factors leading to global warming, the organisation has developed an extensive policy framework to resolve the issue. Toyota “is implementing measures to reduce CO2 emissions by restricting energy consumption in all areas of business activities and all stages of vehicle development and design, production, logistics, and sales” (Reducing CO2 emissions, n.d). The Toyota Auris is a highly fuel efficient car with carbon dioxide emissions of 132g/kg, which is really lower as compared to emissions from other car models. Toyota has set aside financial provision for volunteer tree planting programs as part of its ‘green’ policy. Finally, the company has made huge investments in R&D activities in order to develop improved waste to energy conversion technologies. 4. Conclusions and Recommendations The above discussion points out various drivers influencing Toyota’s green policies. The literature review session clearly reveals that the organisation’s business sustainability strategies and corporate social responsibility force them to become more environmentally focussed. Toyota’s current green policies intend the reduction of CO2 emissions and global energy consumption. The company has received a number of reputed awards for its efficiency in environment management in recent years. Toyota’s new car models like Toyota Auris are highly competitive in terms of fuel efficiency and CO2 emissions. The organisation also focuses on other environmental operations such as tree planting and effective waste recycling. Since Toyota’s marketing mix strategies are already environmentally focused, there is a broader scope for the company to go further in the area of environment management by enhancing its green policies. It is recommendable for the company to focus on product innovation. To be more specific, the company has to develop new car models which use non-conventional form of energy. Such a strategy may also assist the firm’s customers to take advantages of cost advantages. Moreover, the company has to consider needs and requirements of its nearby communities also. For instance, Toyota may build waste to energy conversion plants so that the company can address health and environmental concerns to a great extent. The organisation’s instrumental approach is adequate enough to maximise shareholder values whereas the normative approach assists the firm to appraise its values and norms. References Cleff, T., Heneric, O & Spielkamp, A., 2004. Regulation and industrial policy. In O. Heneric., G. Licht & W. Sofka, eds. Europe's Automotive Industry on the Move: Competitiveness in a Changing World. New York: Springer, p. 157. Bradbury, H & Clair, J. A., 1993. Promoting sustainable organizations with Sweden’s natural step, Academy Of Management Executive, 13(4), pp. 63-74. Goodman, MB & Hirsch, PB., 2010. Corporate Communication: Strategic Adaptation for Global Practice. New York: Peter Lang. The Green Car., n.d. Toyota named green car manufacturer of the year, [Online] Available at: [Accessed 22 March 2012]. OECD., 2001. OECD Environmental Outlook. USA: OECD Publishing. Reducing CO2 emissions, n.d. Toyota. [Online] Available at: [Accessed 22 March 2012]. Toyota., 2010. Toyota European: Sustainability report 2010, pp. 1-85, [online] Available at: [Accessed 22 March 2012]. Toyota Motor North America, Inc., 2011. Toyota and greener plants, Toyota in Action, [Online] Available at: [Accessed 22 March 2012]. U. S. Environment Protection Agency., 2011. 2011 energy star award recipients, Energy Star, [Online] Available at: [Accessed 22 March 2012]. Read More