Toyota Motor Corporation: The Need for Strategic Change Intervention

Introduction

Organizational development is a complex process that may feature the human process, technostructural, human resource, and strategic change interventions. Nowadays, HRM specialists understand the need to align the HRM practices with the general line of organizational development and its main points. Interestingly, Toyota Motor Corporation has gone through unprecedented changes since its founding in the early 20s century. The most famous of the strategic changes was the development of the Lean and TIM WOOD approaches, which revolutionized the manufacturing of products and services (James, 2021). Recently, the company launched new lines of electric vehicles, redesigned cars, consolidated its position in the Australian and European markets, and set a goal of 3.5 million BEVs by 2030 (James, 2021; “Answers to five questions,” 2021). This paper aims to develop a strategic change intervention for Toyota Motor Corporation that will solve the existing problems in organization development.

Organization Background

Even though the company confidently realizes itself in the market and is actively working to improve production, conformity of products to the needs of the market and consumers, and occupies ever higher positions in world rankings, its organizational structure remains a mystery. So far, there is not enough information about the internal processes in the management of the organization, at least in scientific discussions. Presumably, the company will benefit from strategic interventions aimed at changing the company’s image. Remarkably, for Toyota, entering the US market has always been a challenge and met with resistance from local automakers. The company met with serious protests, ranging from black PR practices to a ban on production and exports at the state level. This is not surprising, because in the mass consciousness of Americans there is a traditional vision of themselves as leaders in the field of auto production. Therefore, this market has historically been conditionally closed for Toyota.

Organization Diagnosis

However, introducing changes at the organizational level could make a difference. To defend this position, the following argument can be made: after the financial crisis of 2008-2009, the company came under a wave of criticism of its organizational structure and was forced to withdraw its cars from sales (Kurtzman, 2010). It was a black PR campaign, and the American press mercilessly criticized the company’s HR practices for national closeness and the absence or too low percentage of non-Japanese people in any possible positions, from production workers to management positions. The keywords for media feedback were demands for organizational change, which was described as insufficiently open and opaque.

It is obvious that the company was only attentive and sensitive to its corporate secrets, including the secret of strategic development methods, for fear of unfair competition. However, this story was widely discussed in the media at the time, and Toyota’s image was severely damaged. Today the company is one of the leaders in the production of electric cars, actively implements CSR practices, and participates in international congresses of automakers and other public events. Nevertheless, the story of the closed and non-transparent organizational processes and criticism in this regard reduce the credibility of the company and negatively affect even the new image.

Therefore, Toyota Motor Corporation could try to find a balance between the desire not to divulge trade secrets and to inspire consumer confidence. To do this, the company can make changes at the level of personnel management, for example, reform the public relations department and increase the conscious presence of TMC in the information space. Key changes could include an active marketing campaign promoting new product lines and contributing to the reduction of green emissions. Equally important, TMC can forge partnerships with influencers and become not only a de facto but also a recognized leader in the industry.

Organization Change Process

Toyota Motors Corporation should not be hasty or thoughtless when making changes. Cummings and Worley (2018) note the importance of maintaining a balance between “organization development versus change management” (p. 640). According to scientists, changes in organizations occur under a multitude of factors, including external demands due to a multitude of political and economic changes. Despite this, according to scientists, corporations should monitor the preservation of organizational culture and all practices associated with it. For example, the practices of recognizing and managing rewards, corporate culture and values, inspiring leadership, and others will continue to be relevant to organizational performance despite the need to implement ongoing strategic change.

Given the diagnosis above, TMC’s situation was analyzed in terms of its external environment, boundaries, and feedback (Cummings & Worley, 2018, p. 87). As a result, it was concluded that it is necessary to align its corporate image with the clients’ expectations. Notably, TMC has extensive experience in creating products that best meet the needs of its customers. Therefore, it is likely that approaches are already being implemented here that allow linking the company’s capabilities and the needs of customers.

Notably, changes in the corporate image will require strategic change interventions. At the same time, the company will continue to focus on human process, technostructural, and HRM intervention practices to maintain balance. As part of strategic interventions, TMC may choose one of the strategies presented by Cummings and Worley (2018) and create the PR environment that best matches the definitions of the “blue world scenario,” “orange world scenario,” or “green world scenario” (p. 639). Preferably, TMC should choose the orange world scenario, because, despite the tempting opportunities in the CSR that are inherent in the green scenario, the company will have to live up to its stated intentions. The company will not look perfect in the eyes of populists who do not assess real economic trends and particulars, making an impact on the nature of production and corporate processes of individual companies.

Managing Change

Since TMC will need to improve its corporate public image, it will have to implement the strategic changes using the frameworks of sustainable management, since, due to the black PR techniques used against TMC in past it should better avoid the risks related to the tactics of global social change. For example, GSC implies the need for recognizing the problem to build alliances with other organizations, which is of no need for TMC, since the factual position of the company is favorable and sustainable, and it only needs public recognition of its merits.

Therefore, TMC can turn to simpler sustainable management practices to create a more positive image. TMC should establish direct communication with potential buyers, and draw attention to the already created new attractive image of the company that supports and is a leader in reducing the green-gas emissions in Japan, and is a supporter of fair competition. Then, the introduction of practices of sustainable management and actions at the levels of people, planet, and profit will add to the existing positive image.

It is noteworthy that scientists offer their vision of the corporate image of companies. Saran & Shokouhyar (2021) note that “there is a significant gap between their claims about their own green identity and how the public perceives such an image” (p. 3). Interestingly, scholars analyzed company Twitter statements and user reactions for 10 top automakers in 2018 and their statements about their green CSR culture (Saran & Shokouhyar, 2021). At the same time, Singh & Crisafulli (2020) state that when creating a public image, companies should be wary of brand alliances, as image problems of one brand lead to a decrease in the popularity of related brands. Given this conclusion, TMC could go from the opposite, and continue to maintain close relationships with partners, since such cooperation indirectly confirms the reliability of the participating companies of the brand alliance and their mutual trust.

Conclusion

Thus, the strategic change intervention for Toyota Motor Corporation was developed to solve the existing problems in organization development. The public image was determined on the organizational level, using the tools of the company’s external environment and boundaries, and based on the feedback from the media. The decision to make strategic change intervention was made, that should utilize the sustainable management tactics in the framework of the orange world scenario. At the same time, the company should maintain its current CSR practices to support other organizational processes in the area of HRM, production, profit, and public relations. Direct and immediate steps are required to change the public image, such as joining alliances to advertise the brand as socially responsible and open to the world.

References

Answers to five questions about Toyota’s BEV strategy. (2021). ToyotaTimes. Web.

Cummings T. G., & Worley C. G. (2018). Organization development and change. (11th ed.). Cengage Learning US.

James, R. (2021). The Toyota way or the unions’ way? Examining the nexus between lean and unions in Toyota Australia. The International Journal of Human Resource Management, 32(6), 1273-1311.

Kurtzman, J. (2010). Toyota’s problems start at the top. Web.

Saran, S. M., & Shokouhyar, S. (2021). Crossing the chasm between green corporate image and green corporate identity: A text mining, social media-based case study on automakers. Journal of Strategic Marketing, 1-24.

Singh, J., & Crisafulli, B. (2020). ‘Corporate image at stake’: The impact of crises and response strategies on consumer perceptions of corporate brand alliances. Journal of Business Research, 117, 839-849.