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Organization Change Occurred in Toyota Company

Free «Organization Change Occurred in Toyota Company» Essay Sample

Organizational development and change are vital for every firm’s success. Each company depends on its vision, envision, and motivational change that contributes to a better future performance. The management and top leaders of the organization embrace employee involvement, work design process, and reward system intervention techniques to ensure satisfaction and total participation of all workers in managing and achieving the created vision and changes (Cummings & Worley, 2014).

Toyota Company has made its way to being the world-leading automobile industry. The firm has evolved over the years due to organizational changes. The company has noted personnel changes, unplanned changes, radical changes, and strategic changes. It has ensured that the Toyoda family maintains the top position in the enterprise.

The Toyota Production System (TPS) was one of the changes that have occurred in Toyota Company. TPS presupposes the application of lean philosophy concept (Alves, Sousa, & Dinis-Carvalho, 2015). It ensured that human resources and individual participation were highly valued. Sakichi Toyoda was the pioneer who implemented lean principles and major practices in Toyota Motor Corporation. Toyoda Automatic Loom was an invention in Toyota Company that boosted the appreciation of the TPS (Bhasin & Burcher, 2006). Moreover, the competition existing between Ford Motor Company, General Motors, and Toyota Company created the need for organizational change.

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Most changes in Toyota were advanced by CEOs and managers. Kiichiro and Eiji Toyoda were major people who led shifts in the organization. CEOs, including Taiichi Ohno, focused on empowering their workers. They ensured that work design and reward system intervention was done. Shigeo Shingo and Edward Deming were employees hired by Toyota Company who made sure that they led to positive organizational changes.

The changes that occurred in Toyota Company have made it the leading automobile company. It produces numerous high-quality vehicles each year with the help of the TPS that was a redesign process by the Toyota management (Alves et al., 2015). TPS was the most effective tool that applied lean practices that ensured that only one automobile was produced at a time. There were some problems, such as brake issues in 2009, that forced the company to dismiss top officials from the public sight. The problems made the company adopt new methods and corporate culture to curb the problems (Liker & Hoseus, 2009). Thus, most organizational changes were made to adjust for the future prosperity of the company.

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Activities Contributing to Effective Change Management

Section 1: Creating a Vision

Describing the Core Ideology

Toyota Company has created a vision to make a successful future. It has set an effective corporate structure and culture, which makes sure that employees are involved in decision-making and quality management aspects. The vision of the company is to ensure that the customer is satisfied, and employees feel involved. Six Sigma, lean, and TPS are some of the core aspects that contributed to changes in the vision (Alves et al., 2015). The core values that Toyota Company is striving for are participation, commitment, productivity, excellence, optimization, and inspiration.

Furthermore, the codes of conduct and the global vision were developed in response to making sure that the organizational change is achieved. The managing team enhanced teamwork and the diversity of work, as well as assisted in attaining the continuous quality is done (Robbins, Judge, Millett, & Boyle, 2013).

Constructing the Envisioned Future

Toyota is well-known for high-quality automatic vehicles and robot systems. Innovation and TPS enhance and transform the achievement of the general company’s goals. Toyota Company is a vibrant, responsible, hardworking, and determined company that aims at satisfying customer requirements. The leaders, including the management, are at the forefront in ensuring that the employee is motivated and involved in decision-making (Robbins et al., 2013). The company, therefore, collaborates with the society and workers to tackle most significant challenges caused by unplanned and retrogressive changes. The company understands the need for producing automobiles that satisfy the community.

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Section 2: Motivating Change

The corporate company philosophy has clearly outlined how the company’s culture is motivating change. Toyota culture respects the law, society, environment, employees, and clients (Liker & Hoseus, 2009). Thus, Toyota Company makes sure that the environment leads to success. The organizational culture maximizes human resource capabilities of the invention. The structure of the company allows workers to be part of design work process and decision-making.

Furthermore, the company developed a reward system intervention. Every year, the company selects the best workers in every category and gives them rewards. From the motivation process, workers strive and make more efforts to perform their duties effectively. In addition, during the Annual General Meeting, some workers are promoted to top positions. These personnel and transformation changes occurring serve as the motivation that enhances the company’s success.

Creating Readiness for Change

Jidoka and Just-in-Time (JIT) are two philosophies that helped Toyota create a shift in the production of the automobile by implementing the TPS. Jidoka means “automation with a human touch.” It presupposes that there was a problem that occurred and resulted in the equipment stoppage, hence leading to the prevention of defective products from being manufactured. On the other hand, JIT means producing only what is required by the process (Morgan & Liker, 2006). The two philosophies are the basis that led to the change of the system of production. Furthermore, the process of production of vehicles was continuous and, therefore, made sure that the TPS was necessary.

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Moreover, the company ensured that it employed graduates from schools. For instance, Taiichi Ohno was hired by the Toyota Company to join the Toyota Automatic Loom after graduating from the Nagoya Technical High School. The employment of Ohno and his participation and commitment to the company was a great contribution to the organizational change. It was the plan of the management and Toyoda family that the graduate could bring developments and positive impression in the advancement of the system.

Similarly, Eiji Toyoda was employed by Kiichiro after graduating the University of Tokyo. In 1950, Japanese government forced Kiichiro Toyoda to make reorganization of his company. In the same year, Eiji was named the managing director of Toyota Automotive Works. It was the reorganization that forced the company to separate the Toyoda family business. It also led to the resignation of Kiichiro and the entire staff he managed.

Overcoming Resistance to Change

Salary payment is one of the resistances to change in Toyota Company. The company’s executives are known to be paid a third less salary compared to Volkswagen executives. The company is overcoming such problems by providing dividends, bonuses, and motivational money. Highly performing workers are rewarded during the Annual General Meeting. In addition, the strategic plan of the company has set a priority to increase a salary of employees.

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Competition is resistant to change in Toyota Company. Since its foundation, Toyota has faced competition from Ford Motor Company, General Motors, and Volkswagen. The company has changed its promotional marketing and customer satisfaction process (Nordin, Deros, Wahab, & Rahman, 2012). The company has its genuine distributors in many countries of the world. The sellers ensure that they can repair and market the company’s products. The company has also made numerous investments in developing countries in marketing its products.

Moreover, the company has ensured that the management and personnel work towards the implementation of lean principles and practices (Nordin et al., 2012). These practices have been in the existence for over 90 years and they help overcome the resistance to change. The implementation of lean practices requires a support of the management and the participation of all personnel in the Toyota Company (Bhasin & Burcher, 2006). Therefore, the leaders of Toyota have introduced employee involvement through the use of the work design program and the reward system intervention that necessitate lean practices application in the process.

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In 1989, defects of the company’s Lexus model were found. This change was a major problem to the company’s reputation. During this period, the company had experienced rapid growth and expansion. To overcome such deference to change, Toyota created a team to solve the problems (Bellgran & Säfsten, 2009). The team went to customers’ homes to collect cars.

Section 3: Creating Change

Taiichi Ohno was the father of Kanban System and creator of the TPS. When he joined Toyota Automatic Loom, he made improvements to the JIT concepts that were earlier developed by Kiichiro (Bellgran & Säfsten, 2009). He made sure that he focused on reducing waste, as well as developing methodologies to produce required components.

In the year 1950, Eiji traveled to the United States to study the U.S automotive industry. He reported on the American manufacturing methods to its workers. Eiji ensured that the work was designed and distributed to every employee and that the changes in production techniques were also noted. The concepts created owing to trips are considered one of the building blocks of the TPS of the continuous improvement (Morgan & Liker, 2006).

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Toyota Motor Company invented the TPS which was used in the production of vehicles (Morgan & Liker, 2006). The system worked with JIT Production which was a vision of philosophy that the company produced. This change was successful as it continually improved the company’s production, as well as the practice of making the organizational change in appropriate time (Benn, Dunphy, & Griffiths, 2014).

Section 4: Managing Change

Toyota Company has been in existence since 1937. Every year, the company sets a new vision and organizational shifts in the struggle to manage and improve the current performance. Customers are seen to be ordering vehicles which are efficient and quicker to produce. To manage changes, Toyota Company has introduced a lean manufacturing system which has made the production faster (Arlbjørn & Freytag, 2013).

The chaos of the World War II led to the change. The loom works were converted into motor works. When the change occurred, Taiichi Ohno made the transition to truck and car part production. The change was managed by the establishment of JIT principles and methodologies developed in the loom manufacturing process (Bellgran & Säfsten, 2009). Ohno gradually developed improved methods that were supportive of the assembly process.

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In 2009, brake problems in the majority of vehicles were noted. It was an adverse change because many people questioned how a successful company could have such failures. Ray LaHood, the U.S transportation secretary, confronted the company. To manage the change, Toyota issued recalls in the United States and Toyota’s top leaders disappeared from the public sight. Such conflicting and radical changes had the ability to paralyze the productivity of the company. However, from the point of solving the problem, Toyota was noted to have dealt with the issue constructively and efficiently (Nordin et al., 2012) owing to the rigid corporate culture and the existing hierarchy monitoring.

Section 5: Evaluating Change

The introduction of the TPS set a basis for customer satisfaction. The TPS was known to be efficient and quick in producing high-quality vehicles, making sure that only one car was produced at a time and ensuring that it satisfies customer requirement and guarantees company’s sustainability (Benn et al., 2014).

The World War II led to changes in materials available. Under the management of Taiichi, machine operations were maintained under severe conditions of the shortage of materials caused by the World War II (Robbins et al., 2013). The war also made Ohno introduce the philosophical concepts that led to the TPS development. They were taken from Today and Tomorrow book of Henry Ford published in 1926. The JIT concept was borrowed from market operations of the United States that were observed during the trip in 1956.

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Moreover, company’s changes can only be made through creativity and full participation of workers. As mentioned above, Eiji visited the United States to renew the study of the American automotive industry. He noted that the company’s challenges cannot be solved by copying American industry but rather by making inventions by employing workers’ creativity, wisdom, and hard work and using resources to produce superior automobiles (Robbins et al., 2013).

Conclusion and Recommendations

Organizational changes have helped Toyota Company to enhance its leadership in the automotivee industry. The corporate culture and strategic plans have been set to ensure work design and empower employee involvement. Workers at the company value the core vision and the ideology created by the firm to achieve the goals set and satisfy the customer requirements. The CEOs, managing directors, quality assurance employees, and Toyoda family are the people who have ensured that the changes in the company led to the successful future. The company made sure that the created changes were motivated, as well as managed them properly. Furthermore, they company ensured that the adverse changes were solved quickly. For instance, the 2009 crisis in the United States was resolved by the recall and dismissing top officials to save  the public image of the company. Therefore, organizational development and changes are factors that contributed to the success of the Toyota Company.


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Thus, Toyota Company has developed a change in the organization that has led to its success. However, the organizational culture and structure need to be improved yearly. For instance, the company has to ensure that it increases the salaries of its top officials to realize organizational change success.

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