Corporate culture


This paper asserts that corporate culture is very important factor in large-scale strategic change processes. An organizations ability to be successful depends on its ability to change its business strategy to be competitive in frequently changing global market. Depending on the global environment organizational culture must be reformed in order the organization can deal situation that threatens it survival. Organizations with effective corporate culture are evidently successful in their business processes. Successful organizations are able to transform the way they operate to by recognizing the importance of corporate culture in planning and executing new strategies changes. Change strategies could fail unless an organization makes a planned effort to change its culture. These strategic changes could include developing more effective Job design and faster communications between individual employee, who provide a product, service, or information with those who receive it, and in the overall construction of pathways over which products, services, and information take their final form. These changes help to improve business processes and deepens process knowledge, allowing an organization to be increasingly adaptive, both when it experiences operating difficulties and in determining how to exploit best market opportunities

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This paper was build upon researches made on Toyota recent strategic change in its quest of Toyota Global Vision 2010 to achieve 15% of market share by 2010. It draws lessons applicable to more general strategic changes by addressing the reason behind the failure of Toyota's strategic change management. This paper shows how corporate culture is crucial for any success of any strategic change. However this cultural change should put the whole supply chain in picture. Therefore, this paper phrases Toyota's approaches in implementing its strategic change to achieve its vision of conquering current tight competitive global automotive market.

During the past decade, Toyota has aggressively expanded its Market globally into China, Europe and the United States by setting up assembly plants, parts and components supplier bases and engineering entities. Toyota global vision 2010 to capture 15% of market share has exposed Toyota to unfamiliar territory. Even though the pursuit of Toyota's agenda to take over the automobile market share was alive for decade, the company focus was on standardization, continuous improvement, just-in-time, and built-in-quality. When the American Auto industries start to crumble, a unique opportunity arises for Toyota to move in to fill the vacuum created. However Toyota under estimated the pressure that could be created when an organization try suddenly growing faster than what its system could support. Toyota was confronted with hard choices between their deeply rooted company culture and their new competitive advantage. Due to this fast paces change Toyota leaders where facing responsibility to align and coordinate between strategic direction and operating model and customers behaviour in overseas market. The path to high growth require common product platforms, new launches and reliance on new technology exerted pressure on Toyota's lean Production culture: west reduction and process stability.

Under the leadership of Toyota's chairman Fujio Cho, Toyota has transformed its principle of using only reliable technology that services the business processes. The leadership tried to take Toyota in to new technological advancement while maintaining the corporate culture that underpinned its success. Especially after the price hike in petrol Toyota strongly advocate on environmentally friendly automotive technology, such as the hybrid-electric Prius and become the world leader in the field. Moreover Toyota increased its capability to build large gas-driven cars and small trucks to satisfy US market. This recent change of Toyota strategy to dominate the car industry has been underpinned by using new Know-how, new technology and new materials to improve, perfect and break through auto design and manufacturing. The strategy also required Toyota to shift its focus from manufacturing engineering and built-in-quality toward research and development and product design has exposed toyota .When a company shifts its focus from lean production to technology-innovation, there is an embedded obstacle - culture change. On the one hand, the essence of lean production dictates the elimination of waste. On the other hand, the uncertainties in new product development require that the manufacturer build in redundancy to manage the risks of the unknown and ensure a high level of safety. Trying to balance lean production with the need for redundancy is a difficult act that requires the leadership to be instrumental in making key decisions as well as leading and managing the change.

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In recent event it was obvious that Toyota failed to keep its reputation of high standard in safety due to the clash that resulted in culture change. Toyota moved from being car maker that specialise in lean manufacturing in to new technology-innovative, for that reason Toyota failed to deliver product that would reflect the reputation it had for long time.

The other issue Toyota has failed to take inconsideration the impact of suppliers could have on its business when it undergo cultural change. For decades Toyota developed strong relationship with its supplier to support its Just-In-Time manufacturing. However with the recent sudden change there may be some truth that suppliers overstretched and failed to catch up with Toyota. Toyota had to add local suppliers to support its manufacturing in US and Europe which exposed it product to degree of uncertainty. Given how difficult and time consuming it is to develop suppliers to be as good as Japanese suppliers (Jeffrey Liker 2010). Moreover Toyota's president said that the company grew too fast and outstripped its ability to develop the necessary human resources. Toyota failed to provide the necessary training to its employee during its strategy change to make sure that employees have the right skills and capabilities to identify and handle all situations they may encounter. Toyota is famous for its plan-do-check and act strategy but clearly the training among its employee is now needs to focus more check and act. In addition, in an environment where safety is paramount, everyone should have been trained on the symptoms and how to avoid ignoring of negative external safety information. So clearly Toyota change processes failed because it failed to include its supplier and employees in the picture and the lack of communication between its management and executive. (Steven J. Spear 2010).

In 2002, Toyota had a vision to grow from 11% to 15% in total car industry around the world. However Toyota's Global Vision 2010 has been overblown. in respect with Akio Toyoda, the President who said "that the company grew too fast and outstripped its ability to develop the necessary human resources". The problem that Toyota had with their cars and made the recalls is actually not their own factories faults, but it's because by their suppliers. Few factors that caused were beyond the employee's control such as external factors included actions by senior management, lack of adequate information or job training, faulty inputs to the process, or rewards that indent actions not in line with documented goals. With relation to the suppliers Japanese suppliers follow a strict schedule of delivering the parts on time unlike the other suppliers based outside Japan who did not follow proper Just in time manufacturing. When Toyota's North American market had more demand from their customers Toyota tried to push their suppliers to support them to increase their quantity by producing more and more. But the issue that rose was the suppliers tried to support the orders received but with increased demand they manufactured the parts in higher volume which resulted in bad quality. This resulted in lack of time given to them from Toyota.

Mr. Toyoda however admitted that at the moment Toyota have a lot to do as their operating goals that were identified in four areas were customer satisfaction, supplier development, lower costs, and people development. At this stage where things did not go in control of Toyota, one good incident that occurred was deciding to recall the 2 million cars to check the faults. Although it is not easy and does cost a lot of money but the only way to convince the customers so that it does not lose their brand name, this will only save their position in automobile market.

From the above analysis it was clear Toyota went through drastic organizational transformation involving new strategic change. Toyota changed they way it operates advising news strategies, to develop and come up with new product that the customer wants and getting them to market in time to gain competitive advantage. In doing so Toyota faced obstacle into getting the balance of the strategic change and its usual corporate culture. In organization undergoing strategic change culture clash could result in ultimate failure unless cultural change includes activities designed to improve the skills, ability and motivation of members, to improve technical skills, effective work processes and faster communication (Brown, D & Harvey D 2006). In case of Toyota this true for the whole supply chain including part supplier and individual contractors. Evidently Toyota implemented Dictatorial change during the global crisis to capture the automotive market by implementing strategic change that may run counter to the entrenched internal culture of the company. The recent crisis was the result of this strategic change. Toyota as car maker, built its reputations a round safety and efficiency and conservative approach to lean-production failed to guarantee customers to provide a product that satisfies higher standard. The company rely on the technology to shorten the product life cycle of car manufacturing compromising the safety on which Toyota's reputation build on.

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