Introduction
The success of any company depends on the personnel involved in the production and sale of the product. An important component is the presence of a complex of labor rights and social guarantees. Companies recognize the need to consider these factors and their impact on the business goal of achieving profit. That is why a policy of social responsibility is being pursued, which has numerous regional and territorial features and is carried out in the context of a diversity of sociocultural aspects. This circumstance is determined by the fact that peoples live on earth with their own traditions and values developed by hundreds of generations on ethnic and religious grounds. The purpose of the discussion is to consider in detail the corporate social responsibility report of Toyota, one of the most successful companies in the world.
Background
At the present stage, the main source of economic resources is a person. Given the possession of various skills and abilities, a person can be defined as a factor in the development of a company. The concept of national wealth and the theory of sustainable development of society are based on the recognition of man as the driving force of social development. Human capital can be defined as a set of accumulated knowledge, skills, abilities, and personal motives, and in a broader sense, as the main factor in the movement of economic growth.
The development of human capital, the importance of which is growing in modern conditions, helps to increase the competitiveness of the company. Globalization has given particular importance to knowledge and skills in the process of development, both in the economy of a single country and for a particular person. Based on the foregoing, we can conclude that human capital is a relevant concept in the theory of economic growth. An integral part that contributes to the development of human capital is corporate social responsibility. Corporate Social Responsibility (CSR) is a concept in which organizations take into account the interests of society and fulfill their social obligations. A large number of organizations in the world practice CSR, thereby acquiring additional benefits. Toyota’s CSR – through the prism of its relevant report – should be analyzed from various perspectives – starting from the ecological and ending with the economic one (Cooper & Owen, 2007). This is the only way to gain the necessary insights into the extent of development of the company’s CSR.
Ecological Responsibility
Toyota’s CSR implies cohesion, the presence of a collective spirit, and the very conduct of business is aimed not only at making a profit but also at establishing the right social values and awareness of responsibility within the whole society. A distinctive direction of the CSR model under consideration is the emphasis on environmental values and concern for the environment. An example of concern for the environment is the company in question, which is engaged in the development of electric vehicles. One of the priorities of Toyota is the minimization of emissions into the atmosphere. Environmental policy is included in the concept of sustainable development of the company, which will later become the basis of global environmental thinking. Toyota Motor also sets the goal of creating fully recyclable vehicles that are environmentally friendly.
Toyota’s environmental targets for 2050 are clean air, clean land, clean life, and a clean world. Toyota pays great attention to the creation of environmental innovations. In 2017, it developed a new hybrid system featured on the C-HR Hy-power concept crossover (Toyota Motor Corporation, 2022). In the near future, the hybrid system will be available for a number of production models of the Japanese brand. To achieve the goals of sustainable development, Toyota applies various principles and methods, among which the Cradle to Cradle principle has become very popular in recent years. It involves the management of non-waste production based on the formation of new business models.
The Cradle to Cradle approach to the product lifecycle requires the product to be re-integrated into the manufacturing process. Instead of designing products with limited reusability, Toyota uses resources and design systems that support reuse in products or services. Of the environmental initiatives, one can note cooperation with WWF in the framework of a nature conservation project along the Tisza River in northeastern Hungary (Toyota Europe, n.d.).
Given the information obtained from the report, Toyota adheres to an environmentally friendly strategy in its business activities. The corporation participates in numerous related initiatives worldwide, which is a crucial indicator of an ecologically conscious company. Moreover, there are well-developed sections on the CO2 emissions challenge in the firm’s report that reveals its notable contribution to the struggle against the issue (Toyota Motor Corporation, 2022). Toyota has also launched a number of global ecological campaigns involving a number of transnational actors. The corporation recognizes the importance of international cooperation within the given scope and encourages the global community to participate in it.
Ethical Responsibility
Here is a fact that testifies that the basic principles of ethical responsibility have developed in Toyota Motor Corporation. The report contains the following fundamental provisions (Toyota Motor Corporation, 2022). The first is to honor the letter and spirit of the law of each country and to conduct business openly and honestly in order to be a worthy corporate citizen of the world. Secondly, it is to respect the culture and traditions of all nations and contribute to the economic and social development of society through their activities. Third, it is to direct efforts towards the production of environmentally friendly and safe goods, to improve the quality of life throughout the world. Fourth, it is to develop a corporate culture that stimulates individual and collective creativity and promotes mutual trust and respect between ordinary employees and management. Fifth, it is to cooperate with business partners in research and development with the aim of stable long-term growth and mutual benefit while remaining open to new contacts, etc.
As a result of the spread in the world, people’s expectations regarding the role of Toyota have increased. This is taken into account – when developing the above principles, the company proceeded from how it could influence sustainable development in close interaction with stakeholders. According to Toyota’s approach to business, the company aims to avoid the so-called “big corporate disease” even though it employs a quarter of a million people around the world. In order for the company to remain strong and energetic, it is necessary to maintain a competitive and stimulating spirit (Toyota Motor Corporation, 2022). The corporation’s management believes that this disease of large corporations occurs when the duties are carried out by management and employees slowly when they repeat inefficient processes. It is emphasized that one of the important aspects of the company’s success is the constant stimulation of people – creating situations of competition and encouraging them to constantly improve.
The peculiarity of Toyota’s corporate relations is that the company does not demand high performance from employees without offering anything in return. For example, Toyota does not reduce pensions and health insurance amounts. In a typical company plant, in addition to life insurance, health, dentistry, and vision programs, there is a pension plan and a fund accumulation plan. Employees are provided with free work clothes and medical care and receive discounts on cars. Toyota’s management methods include the fact that team leaders protect their people and monitor their work on the assembly line (Toyota Motor Corporation, 2022). Thanks to this interchangeability, in case of problems, each member of the team can offer solutions. All this contributes to the formation of closer relations between employees. Not surprisingly, Toyota’s competitors around the world seek to borrow similar management practices from Toyota.
In conclusion of this section, Toyota operates in the interests of the people of the country of its location, guided by its own principles. The company carefully protects its employees, providing favorable working conditions and providing social guarantees. The relationship that has developed within the company between employees and the manager is characterized by originality and differs significantly from the relationship between employees and employers common in most Western companies, which is partly due to the peculiarities of Japanese culture. The undertaken research allows stating that the policy pursued by Toyota is very effective, and the socio-ethical aspect is the main component of its successful development.
Economic Responsibility
From Toyota’s report, it seems that the company is economically responsible, given the given data in Promoting Sustainability and Strategy and Management sections. The corporation founds all its manufacturing and economically-related affairs on lean production. The latter is a directly systematic approach to identifying and eliminating costs by continuously improving the production process. Its founder is the head of mechanical production at Toyota (Chen et al., 2019). The essence of lean manufacturing as a whole lies in a systematic approach directly to identify and avoid costs by the methodology of continuous improvement of the production process, as well as towards improvement in all areas of the organization. The application of lean production implies a certain method of thinking, a way of considering various activities in terms of value directly to the consumer and reducing absolutely all types of costs. The ideology of lean production is based on the perception of business as a process of creating value for the consumer, identifying and minimizing costs as much as possible, continuously improving absolutely all types of activities in all enterprise structures, and involving and developing employees to maximize customer satisfaction.
The lean production philosophy is reflected in the approach that is considered one of the first and basic tools of lean manufacturing, from which its implementation in the enterprise begins. This approach implies compliance with the following principles in production: sorting (clear spatial distribution of tools, materials, and components according to the degree of need and frequency of use), keeping order (neatness and orderliness of the workplace), keeping clean (workplace, workshop, etc.), standardization (setting clear rules) and improvement (self-discipline and self-education) (Chen et al., 2019). Other popular lean manufacturing tools include mapping – the creation of a map of the process. In other words, it is modeling and visualization of its weaknesses. Mapping allows you to see the very “mood” at the stage of production planning and make the necessary management decisions in advance or adjust current algorithms.
It is worth mentioning Toyota’s Total Productive Maintenance, which can be considered as general equipment maintenance. This tool aims to reduce production downtime by reducing breakdowns and redundant maintenance. This is achieved by creating a production culture in which the personnel is directly working behind the machines, and not just repair specialists, are involved in the maintenance process (Chen et al., 2019). Visually, the presence of a lean approach in an enterprise is easy to determine by looking, for example, at warehouse zones. The lean manufacturing concept implies the reorganization of storage schemes for inventories, components, and tools in such a way as to minimize the loss of time and other resources (electricity, fuel, labor costs, depreciation of warehouse equipment) when performing warehouse operations. Most often, this involves the creation of local storage cells right in the shops or production sites.
It would be reasonable to summarize that the most important thesis of Toyota’s economic responsibility is that it can only be effectively implemented if all the personnel of the enterprise, from the cleaner to the general manager, are interested in it. That is, employees must be held together by a common idea of improving product quality and reducing costs (Chen et al., 2019). This goal is achievable if the company’s management strives to create and maintain an inclusive creative corporate culture without focusing on negative motivation (fines and disciplinary actions). It is important that each employee is clearly aware that their material well-being now, as well as career (creative) growth and self-realization in the future, are inextricably linked with the success of the team and the company as a whole.
Conclusions and Recommendations
Taking into account the discussion above, the recommendations for Toyota in the context of CSR are as follows. Founding on the principle of putting consumer interests ahead, the company should continue to offer innovative and safe, high-quality products and services that meet a wide range of consumer requirements to improve the quality of life around the world. However, given such a global approach, the corporation’s flexibility in terms of adapting to various business environments needs to be significant. In this vein, Toyota is to make every effort to protect the personal information of clients in accordance with the principle of the privacy laws of the respective state.
It was discovered that Toyota respects its employees and believes that the success of a business depends on the well-integrated activities of the whole team. No issues have been identified in the socio-ethical dimension of the company’s practices. Therefore, Toyota can go on encouraging the personal growth of its employees, which invariably affects the favorable development of the company.
However, it seems that Toyota is to find a balance between addressing its employees’ needs and ones of partners and shareholders. Toyota’s CSR report contains many information on the company’s affairs in establishing great relations and providing significant conditions to them. Nevertheless, there is no specific data on its charitable activities and donations, which is essential as well. Wherever the company conducts its business, it actively participates in charitable activities, both independently and with partners, directing its efforts to strengthen the community and improve the quality of life. As part of its social responsibility policy, Toyota promotes the development of culture, sports, and education. The company pays special attention to programs related to road safety. Such pieces of data that reflect charity, respect of all the partners, suppliers, and dealers and cooperation based on mutual trust that contributes to the development of the business of both partners and the company itself should be reflected in the report in the future.
When selecting new partners, Toyota considers all proposals, regardless of the nationality and company size of the candidates, and makes its opinion based on their overall potential. Toyota also adheres to the principles of free and fair competition in accordance with the letter and spirit of the laws of each country. All this leads to the expansion of the scope of activities, which again emphasizes the necessity to expand the reporting on the company’s cooperation affairs in the framework of CSR. The Business Partners section – which takes only three pages of the report (Toyota Motor Corporation, 2022) – does not seem to be sufficient in this regard.
In carrying out its activities, Toyota strives for harmony with the environment. It aims to develop and implement such technologies, thanks to which the coexistence of the economy and ecology is possible. Toyota is committed to working with a wide range of individuals and organizations working in the field of environmental protection. The company adheres to the principle of respect for all people and honors the culture, traditions, history, and laws of each country. Toyota is constantly looking for safer and cleaner technologies to develop products that meet the rapidly changing needs of society. Thus, it might be assumed that Toyota cares about the environmental dimension to a great degree. Its report contains much data regarding the corporation’s environmentally friendly actions and their outcomes.
References
Chen, P.-K., Fortuny-Santos, J., Lujan, I., & Ruiz-de-Arbulo-López, P. (2019). Sustainable manufacturing: Exploring antecedents and influence of Total Productive Maintenance and lean manufacturing. Advances in Mechanical Engineering.
Cooper, S. M., & Owen, D. L. (2007). Corporate social reporting and stakeholder accountability: The missing link. Accounting, Organizations and Society, 32(7–8), 649–667.
Toyota Europe. (n.d.). Biodiversity: Helping to preserve the Planet’s ecosystems.
Toyota Motor Corporation. (2022). Sustainability data book.