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Toyota Knowledge Management

Paper Type: Free Essay Subject: Management
Wordcount: 3907 words Published: 11th Jul 2017

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In present, most of the management professionals and academics have distinguished knowledge as a significant source of competitive advantage. Potentially, it is a substantial resource to a firm as it includes precious, unusual, unique and non-commutable features and an implicit aspect. Importance of knowledge is increasing day by day in the society and due to this a shift is occurring in individuals thinking regarding business innovations. These innovations can be technical, process or product innovation and strategic or operational.

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Innovations due to knowledge-based organizations are occurring all over the world and similar is the situation with Toyota Motor Corporation that is discussed in this report. In this report, existing knowledge management practices of Toyota Motor Corporation is discussed along with the interventions that it can use to improve its present KM practices and strategies. In this report, intervention proposed for Toyota is the use of KM as a management tool.

As well, here, elements that are essential for effective KM strategy are also given so that the company can develop a new and much more effective KM strategy to deal with its existing KM flaws. The report provides all inclusive information about Toyota’s past knowledge management strategies and some new effective strategies that it can used to make effective use of knowledge and its related aspects.


The field of knowledge management has developed in concern to the management of the data, information and knowledge within an organization and as well as employing it to gain competitive advantage (Armistead 1999, p. 143). Knowledge management basically comprises of procedures and tools to efficiently captivate and share data. As well, it is also related to the potential use of knowledge of individuals within a firm. From last several years there have been serious discussions on the significance of knowledge management (KM) in our society (Hicks, Dattero & Galup 2006, p. 19).

Almost all researchers, scholars and management science professionals agree that substantial transformation had occurred and management of knowledge had become crucial. The excessive business operations failures, due to the traditional modes of operations have intensified the significance of knowledge and its management (MaÊrtensson 2000, p. 204). In the increasing competitive situation, KM and associated strategy concepts had become essential and significant components for present organizations to survive and maintain their position in the long run (Armistead 1999, p. 143).

Due to the significance and advantages of KM, it has become vital for executives and managers to deal with KM and related strategies. Nowadays, it is considered as a precondition for attaining higher productivity and flexibility in both the private and the public sector firms due to its significant advantages (MaÊrtensson 2000, p. 204). Toyota Motor Corporation also makes use of knowledge management for managing its different business operations and processes. With this the company has become able in gathering, organizing, sharing and analyzing its knowledge in regard to resources, documents, and people skills.

Here, in this paper the current role of KM in Toyota will be analyzed along with the specific recommendations in the form of new interventions will be presented to the company. This will enhance company’s ability to manage all its resources in a way through which, it can enhance its knowledge organization and sharing (Wiig1997, p. 7).

Existing Knowledge Management Plan of Toyota Motor Corporation

Toyota Motor Corporation has attained immense growth from the time of its initiation and with this the company have also confronted several troubles related to expansion and its management. In starting the company use to develop and produce cars only in Japan and export in some abroad countries but with increasing demand and globalization it started operating in several different foreign markets. With this increase in its operations base, the company confronted troubles related to management of its resources. For resolving this trouble the company made use of knowledge management as it become aware with its significance and need (Ichijo & Kohlbacher 2006).

The company operations started growing significantly and in this concern it also made use of several advanced approaches like lean production, total quality management etc. All these approaches assisted the company in attaining a significant place in emerging markets. In addition to these approaches, the company also understood the significance of knowledge and its use for company and its employee’s management (Armistead 1999, p. 143). The company understood that managing knowledge among its organization is essential and for this it adopted several knowledge management approaches like development of knowledge sharing networks and use of tactic knowledge (Pena 2002, P. 470).

Knowledge Management

The company management is aware with the fact that the creation of knowledge is not only an aggregation of information but it is a distinctive human process that cannot be decreased or replicated easily. The company management tries to alter data into information that can be used a knowledge for all by collection, organizing, summarizing, analyzing, synthesizing and making final decision (Alwis & Hartmann 2008, p. 134). Management of Toyota is also aware that effective management of knowledge is essential that includes knowledge creation, sharing, security, and abandonment (Wang & Ahmed 2005, p. 327). All this relies on enabling context that can be developed with the help of significant knowledge enablers that are as follows:

  • Introducing a knowledge vision
  • Handling conversations
  • Displacing knowledge reformers
  • Establishing appropriate context
  • Globalizing local knowledge (Ichijo & Kohlbacher 2006).

All these knowledge enablers are introduced by Toyota that evidences its knowledge management practices. Although Toyota Motor Corporation has adopted a significant approach towards knowledge management and knowledge sharing but still it is not able to effectively manage knowledge among all its resources (Towill 2010, p. 335). Nowadays, the company is operating in different foreign markets but still it is not able to improve its production efficiency and quality and it is all because of lack of knowledge management and knowledge sharing (Bailey & Clarke 2000, p. 236).

The company management has still not gone through the fundamental issues of knowledge sharing or organizational learning that are key drivers behind a firm’s significant attainments. For attaining assured success in 21st century it is essential that its leaders develop intellectual capital with the help of knowledge creation and sharing on an international basis. The company had to work hard in the direction of knowledge sharing as its main issues are related to knowledge sharing. If company adopts effective approaches and networks it can easily resolve its issues related to knowledge sharing that in turn will render it with competitive advantage (Pena 2002, P. 470).

For successful execution and operations, it is essential that the Toyota Motor Corporation significantly improves its knowledge management issues. Without this, it would not be possible for the company to manage its leading position in the long run as now knowledge has become crucial for running a business successfully (Randeree 2006, p. 145). The company had effective knowledge management plan but it is lacking at some aspects that if improved can deliver it with substantial advantages of knowledge management and business operations management (Jost 2010).

Knowledge Management Interventions for Toyota Motor Corporation

Toyota Motor Corporation that is the Japan’s largest company and the world’s second leading automobile company is known as the world’s paramount knowledge company (Jost 2010). Till now, the company has three times, won the Global Most Admired Knowledge Enterprises (MAKE) Survey 4. As well as, it is also a five-time winner of the MAKE Japan Survey. This award is given for the unique practices in the field of Knowledge Management. These awards were given on the basis of measures like knowledge-based culture and products, knowledge sharing and cooperation and organizational learning (Bateman n.d.).

All these aspects were managed effectively but still the company need to take extra efforts as it is lacking in some aspects of knowledge management. The most substantial aspect that needs to be improved is sharing knowledge and it can be done only if knowledge management is used as a management tool. The most substantial KM intervention that can be used by Toyota Motor Corporation is the use of KM as a management tool (Jost 2010). By making use of knowledge management as a management tool, the company can effectively improve all its existing flaws of KM in regard to its business operations.

In addition to this by understanding the concept of intellectual capital also the company can improve its KM practices. The company management needs to understand that KM is a vital part of the wide concept intellectual capital because KM itself is about the management of the intellectual capital. Intellectual capital can be understood with the help of two terms strategy and measurement (MaÊrtensson 2000, p. 205). Strategy pertains to the formation and utilization of knowledge and as well on the association between knowledge and value creation (Rao 2005).

Other aspects of intellectual capital that is measurement concentrates on the development of new information systems that are proficient to measure non-financial data along with traditional financial data (MaÊrtensson 2000, p. 206). The abstract bases of intellectual capital that can be used by Toyota can be understood in this figure.

The company management should try to make attempts for exploring the creation and use of knowledge in a way through which it can be leveraged into value as given in the figure. By managing intellectual capital the company can significantly enhance its existing knowledge management practices and improve the flaws in KM. This will also assist the company in making use of KM as a management tool that is essential for making it effective in all aspects of a business (MaÊrtensson 2000, p. 206).

Knowledge Management as a Management Tool:

Usually, KM is depicted as a management tool but it is made up of two aspects in which first is KM as an informational handling tool or operational tool and second is as a strategically focused management tool. By managing KM as operational and strategically focussed management tool, Toyota can easily increase knowledge sharing and organizational learning among its business processes (MaÊrtensson 2000, p. 209). If company and its management handle both the aspects of KM, it can significantly attain all essential benefits of KM for its business and its assured growth.

Knowledge Management as an Information Handling Tool

In the field of knowledge management, knowledge is usually considered as an information handling trouble. It basically includes the formation, organization and utilization of knowledge (Morey, Maybury & Thuraisingham 2002). Toyota Motor Corporation also need to use KM as an information handling tool that can be done by managing different but associated stages. In the first stage, the company should acquire information and in the second stage the collected information should be entered into storage system and then need to be structured rationally (MaÊrtensson 2000, p. 209).

KM is all about the attainment and reposition of employees’ knowledge and making this information available to others so that they can also use it. This can be done by making use of several advanced technologies like Internet and databases. In this way, the company can transform tactic knowledge to explicit knowledge that can be used by everyone for increasing their efficiency and productivity (Rao 2005). By storing information in several company databases the company need to initiate third stage that is related to make stored information accessible to maximum employees of the firm (MaÊrtensson 2000, p. 209).

Knowledge Management Stages

This third stage is related to the maximum delivery and use of information. In the last stage, the company management can significantly utilize information. This process of information utilization can be commenced by employees sharing knowledge and socialising with each other. As well as information can also be utilized or shared through digital and in analogue pattern.

Knowledge Management as a Strategic Management Tool:

The next substantial aspect of KM that needs to be managed by Toyota is KM as a strategic management tool. It is said by management professionals that effective knowledge management begins with a strategy. In concern to a KM strategy, knowledge is distinguished as a most valuable and less used resource (MaÊrtensson 2000, p. 210). For improving knowledge sharing and existing knowledge management practices, it is essential that the company improve its existing KM strategy as it plays a substantial role in successful knowledge management.

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For creating an effective KM strategy, the company need to develop systems that significantly capture and reassign internal knowledge into unique practices. The company management need to consider all of its aims, objectives and anticipated results in regard to KM as it varies for organization (Rao 2005). Sometime, KM can be worked out as a way to enhance performance, productivity, collaboration and competitiveness and sometimes it may be used for meliorating effective attainment, sharing and utilization of information within the company (MaÊrtensson 2000, p. 210).

In addition to this it can also be used as a technique for enhanced decision making, a tool to captivate unique practices, a way to become an innovative firm etc. The purpose of employing and using KM should be clear as in this way only the company can effectively manage its KM practices and strategy. By working on all these things, the company can develop an effective KM strategy (Reimer & Karagiannis 2006).

Recommended Strategies for Implementing Proposed Interventions

For implementing proposed interventions, the Toyota Motor Corporation needs to consider following elements and strategies:

  • Interrogative Questions and Assessments:

First substantial element that should be included by Toyota at the time of creating and implementing its KM strategy is interrogative questions and assessments. The company management should associate its KM strategy with what it wants to attain as well as with it aim and objectives. This can be done with the help of interrogation and assessments of different aspects like what company want to attain and in which aspect it wants improvement (MaÊrtensson 2000, p. 211). How its KM strategy will render it towards benefits and increase in employees’ performance etc. By identifying the answers of all these questions, the company can develop an effective KM strategy.

  • Effective Communication:

In most of the companies’ effort to implement KM strategy, a significant problem that has occurred is about ineffective communication. For successful implementation, effective communication is essential and similar is the case with Toyota (Hlupic 2003). For its successful KM strategy implementation, the company should develop an effective communication plan that should be flexible enough to adopt changes in communication pattern at the time of critical business decisions. Well developed communication plan will also help the company in increasing its knowledge sharing and becoming a learning organization (Morey, Maybury & Thuraisingham 2002).

  • Top Management Support:

For successful implementation of KM strategy, it is essential that the company management have significant support from its top management. The company management should try to convince top management for promoting procedures that will prop up learning and sharing. Top management should be convinced in a way that it helps in setting-up fund knowledge networks and promotes further improvements (Reimer & Karagiannis 2006). If, Toyota become able to receive full support from its top management it will substantially become able in developing and implementing a successful KM strategy (MaÊrtensson 2000, p. 211).

  • Significance of People and Culture:

The next substantial element in concern to the development and implementation of an effective KM strategy is people and culture. Successful execution of KM is significantly associated with a firm’s people and culture. The management of Toyota also needs to develop an effective association between its KM strategy implementation & its people and culture. By focussing on its employees and their significant role, the company can have a distinctive KM strategy implementation (MaÊrtensson 2000, p. 211).

The company that concentrates on its people and culture are much more able to attain its goals in comparison to the firm that concentrates more on technology. This should also be understood by Toyota and then only it will become proficient in the thriving implementation of its KM strategy (Jasimuddin 2008, p. 59). By understanding that the people and culture plays a central role in the creation of thriving knowledge based firm the company management can easily resolve all its people and cultural related issues. These issues are vital to be handled in a timely manner as otherwise it may direct company towards several disadvantages (Morey, Maybury & Thuraisingham 2002).

  • Adoption of Creativity:

The next substantial element that should be considered by Toyota for improving its existing KM practices is the inclusion of creativity as it is vitally linked with strategy. By establishing a link between strategy and creativity, the company will become able in maintaining its position in the long run (Hlupic 2003). By associating KM and creativity, the company management can attain business creativity so it is essential to consider creativity at the time of developing a KM strategy.

  • Creation of Learning Networks:

One more critical element of KM is the creation of learning networks so that employees can learn from each other and maximize their knowledge. By creating learning networks, Toyota can also resolve its existing troubles of knowledge sharing and becoming a learning organization (MaÊrtensson 2000, p. 212). In present employees of the company are not so focussed but by evidencing them KM benefits, they can be encouraged for the development of learning networks.

  • Significance of Sharing Knowledge:

Another important element that needs to be included by Toyota at the time of developing and implementing its KM strategy is sharing knowledge. The company strategy is lacking in concern to this element and should work hard for improving it and including it in its KM strategy. Nowadays, it is seen that employees does not prefer to share their knowledge with other due to increasing competition (MaÊrtensson 2000, p. 211). Management of the company should try to build a positive environment in which everyone like to share knowledge with others so that they can increase their knowledge (Liebowitz 1999).

In this concern, the company management should try to share existing knowledge with its new and present employees through groups’ discussions and regular seminars. They should try to develop an open and flexible environment in which everyone has intensity to increase its existing knowledge base. By adopting these approaches employees’ habit of sharing knowledge can be intensified in a significant way.

  • Appropriate Incentives to Employees:

The next critical element in regard to KM strategy is the creation of appropriate incentives for employees to share and implement knowledge. In present, Toyota’s reward system does not support its sharing knowledge culture so by making changes in it, the company can improve its troubles related to sharing knowledge. The company management should try to develop a reward system that encourages its employees to use their expertise and understand the importance of KM (MaÊrtensson 2000, p. 212). All aspects related to employees and their knowledge sharing should be involved in company reward system as it may come from any level of organizational structure (Despres & Chauvel 1999, p. 112).

  • Effective Evaluation System:

The last substantial element that is vital to consider is the employment of effective evaluation system for evaluating the efforts made in the direction of making use of KM. The creation of system can range from informal to formal system. Toyota should also develop effective evaluation system so that all its knowledge practices and strategies can be evaluated in a timely manner and deliver effective use of KM (Reimer & Karagiannis 2006).

By following all these elements, the company can develop an effective KM strategy that in turn will assist Toyota in sharing knowledge and creating a learning organization. KM as a management tool will direct Toyota towards the development of successful KM strategy and implementation (Liebowitz 1999).


With the help of above discussion, it becomes evident that the Toyota Motor Corporation needs to improve its existing KM practices and strategies. For this, the company should adopt suggested interventions that are related to use KM as a management tool. By making use of KM as a management tool the company will become able in resolving its difficulties related to operation and strategy (Reimer & Karagiannis 2006). KM as a management tool will serve the company with an ability to handle its information handling issues and becoming strategically focussed (Quality Counts 2008).

In this way, it can be said that Toyota should adopt the above discussed interventions and should try to develop a new and effective KM strategy. For the development of effective KM strategy the company should consider all the above discussed elements as it will render it with specific and distinctive approach to KM and its utilization. By adopting recommended strategies the company can develop a new and more effective KM strategy that will help it in resolving all existing KM related issues like knowledge sharing and becoming a learning organization (Liebowitz 1999). The proposed interventions will direct Toyota Motor Corporation towards the development of effective and distinctive KM strategy.


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