The Strategic plan for Toyota Company

The Strategic plan for Toyota Company Executive Summary: The Strategic plan for Toyota is to serve as guideline for conducting and coordinating development, research, marketing ,and all other business activities across the motor industry and for increasing the development of new and exciting efforts based on identification of region in the motor invention opportunity and challenges. Then strategic plan shows a dynamic or changing planning process and brings multidirectional research and manufacturing agenda, together with an interlinked collection of goals and strategies for attaining those goals. Once the plan is setup, it is implemented in the reality for analysing and testing those formed strategies about its effectiveness and attractiveness. Toyota follow the concept of strategy can be updated and changed anytime whenever it is in need of that. Strategy is not any fixed rule that any origination when establishes it, can not change. That means Strategy can be modified anytime when needed. But unless it is updated or said to be changed, all the stakeholders have to follow that to achieve the collective goals of the origination. Some time there is strategy failure in the organisation. But Toyota has never experienced its strategy failure ever. There is constant monitoring of the implemented strategy in Toyota Company in Order To identify the effectiveness and efficiency of implemented strategy. As the Toyota has got distributed architecture of management, all its branch around the world can adopt and implement any separate strategy plan in order to balance the pressure of localization. Literature Review: Seen from the almost mid seventies, it can be noted that scholars can make big difference between big and small business in term of sophistication level, needs, and strategic planning. Pearson and Bracker(1986), Ibrahim and rue(1998), Perry(2001) and Wijewanrena Zoysa, Perera and Fonseka (2004) they all formulated the exact definition of strategic planning which take the distinct of small businesses in consideration and gives the chance that any small businesses cant make on management and resources in a way same as large businesses do. Then findings of piric shows that at correlation between performance and strategic planning. Nevertheless, those findings are mixed. The survey conducted on twenty-six different studies based on experiments Cardinal and Miller (1994) to find an appropriate positive connection between small business performance and strategic planning. In 1982, Robinson argued that very high level of profitability as well as growth in share value and sales return and quantity of employees, who are working fulltime, in a set of small businesses which has paid the consultants from out of the company for strategic planning purpose. Comparing with other business Pearson and Bracker (1986) discovered an appropriate growth in income and remuneration per entrepreneur in business activities that has prepared that strategic course of action to be followed. But not much increase observed in the expenditure (salary) divided on the sum total of sales. A significant differentiation in the rate of sales increase was found by Rue and Ibrahim (1998) in small businesses that incorporated written planning (basic or sophisticated), as opposed to other businesses. Perry (2001) detected a significant differentiation in the degree to which planning was conducted in small businesses that did not applied for bankruptcy as opposed to those that did. Wijewardena et al. (2004) define three levels of planning: no written planning; basic planning; and detailed planning. The findings indicate that the level of planning stands in direct proportion to the level of increase in sales. Yusuf and Saffu (2005) classify three levels of planning: low; moderate; and high. A connection was found between increase in sales and the low level of planning. No correlation was found between strategic planning and increases in market share or in profitability. Andrews (1998) argued that corporate strategy is decision pattern in any organisation that reveals and determines its goals and objectives, then helps to produce principal plans and policies for achieving formed goals, and also expresses the business range that company can pursuer. Strategy Reveals and identifies the companys purpose in terms of action program, long term goals and objectives and available resources allocation priorities: Finding the business in the organisation where it is in, or it is to be in. Helps to find out distinct task for managers at functional, business and corporate levels Is a unifying, coherent and integrative patterns of making decisions Is organisations strategic intoned expression process Is for nurturing and developing intend of the organisation. Part 2: Analysis Task 1 Construct a management strategy. A) Identify an organisation of your choice which you will discuss as an example in this assignment and give your reasons for choosing this organisation. The organisation I have chosen for this assignment is Toyota Motor Company. The company counts under worlds top ten largest companies and stands second in overall vehicles production worldwide. This organisation has always been of my interest and would like to see further to be a part of it. As the company is in the height of success, it has a very effective and successful strategy management. The company initiated on fourteenth February 1867 has now expanded into a massive motor production known worldwide. The success of any organisation depends on how it is structured, organised, managed and controlled, and in this company all of these important functions are well managed. While having a research on this company it was found very interesting on how the company strategy are set, measured and managed. Therefore i choose Toyota Company, as the best example for this assignment. B) Who are the major stakeholders of your organisation and what considerations should be made to ensure their (stakeholder) participation in developing management strategy? In this complex world, any corporate activities to remain sustainable must consider what society demands and how to work for the best interest of the organisations shareholder. Any person or group that are affected or can be affected by the organisation activities are stakeholders. There are numbers of stakeholders for Toyota Company (external and internal). Toyotas major stakeholders Internal stakeholders Owners/Shareholders of the organisation Employees Senior management team unions External stakeholders Customers Business partners/suppliers Local communities Government Debt holders Environmentalist For all these groups or individual it is important to understand their expectations in detail and how these might differ from each other and the extent to which they are likely to seek influence over an organisations purposes and strategies. These stakeholders have divergent interest therefore they create conflict of interest. Therefore management should set such a strategy that their personal goal leads toward the overall goal of the organisation. In order to achieve that target it is important to have their active participation in management strategy. Given below are some considerations to be made for large motor company like Toyota for active participation of its stakeholders. Shareholders participation: as they are the owner of the organisation, company should run on their best interest. Therefore before setting any strategy there should be the clear vision on what the shareholder wants and how are they going to measure it. After knowing on what direction they want to lead the company and what are their long terms and short term objectives strategy should me made accordingly. Participation of internal stakeholders: Employees or staffs plays a vital role to meet the target of the organisation, therefore it is important to know what kind of environment they want to work on, what kind of culture they are expecting and how can it be set. For instance in Toyota motor company, business is totally oriented on production staff and IT staff thus workable environment is most essential factor. Therefore during strategy formation needs and demands of employees should be considered. Dispute among management and employees can lead to a huge loss even company can collapse, for instance regular strike (recent postal strikes), staff absenteeism, staff turnover etc. Involvement of It department: In 21st century IT plays a vital role. In this competitive market company must have latest technology and infrastructures which can kill or can be killed. Thus IT departments involvement is must in formulating any strategy from the start. Meetings, decision making and reports: the success of company depends on how well the strategy of the company is set. Therefore during planning and formulating strategy all important stakeholders should be called for meeting for group decision. At least a member from external stakeholder should be given to attain the meeting. Experts views and senior management involvement is must in decision making process whose progress can be measured and analysed. Management style: Senior management, staffs, supplier, creditors and production department should interact with each other and deicide on what management technique they want to adopt say directing style, teamwork style, and participatory style and so on. C) What are the key criteria that should be considered when reviewing management strategies options? Following are the criteria for reviewing management strategy: 1. Countrys regulations and restriction: the countrys regulation and restriction has main impact. Strategy formed must be according to the countrys regulation and restriction when the business of Toyota is running 2. Flexibility: Ability of an organization to effect changes in the process components (activities, inputs, resources, information etc.) in a timely manner usually in response to changes in business environment and stakeholders needs. 3. Sustainability: has no negative impact on the global or local environment, community, society, or economy-a business that strives to meet the triple bottom line. Often, sustainable businesses have progressive environmental and human rights policies. 4. Resources: the availability of resources in the organisation. It also needs to be considered while reviewing potential options. 5. Alternative functions and strategy: while reviewing it is necessary to go and analysis all others alternatives too so that best alternative could be selected. 6. Overall planning and possible outcomes D) Describe a situation with your chosen organisation where a potential strategy might be developed to resolve an issue. Produce an appropriate strategy and indicate its resource requirements. Toyota is already very grown company and its all most all level of management is, I can say best. But still after going throw number of reading and analysis I can say that the Toyota can make more output than it is getting now. It has enough resources and infrastructures and capability to handle any kind of innovative development. But this could be more effective if the human resources could be used more effectively. Here is one hypothetical strategy example presented by me to explain how to create a good strategy Implement the Framework Agreement through the successful alignment of company and staff objectives in the management and treatment of staff. Implement new pay structures for all staff which guarantee equal pay for work of equal value and provide transparent mechanisms for both career and pay progression. Ensure that all managers have successfully realigned their approach to deliver the more effective performance management which should be one of the major outcomes of the implementation of the Framework Agreement. Execute a systematic, transparent and equitable job evaluation process which will be uniformly applied to all posts and informed by rigorous equal pay review. Achieve greater harmonization of staff pay and conditions. Pilot a new approach to the review of all staff which will promote their professional development and will facilitate the effective and equitable introduction of performance pay, with the least bureaucracy possible. Pursue fairness as a guiding principle in relation to all company behaviours Challenge current arrangements by which specific staff groups are excluded from particular activities and introduce new transparent policies, no longer based on unjustified notions of status or narrow expectations of contribution, which will increase morale and facilitate more productive networking between colleagues. Improve the way in which the Company recruits, employs, manages, develops and rewards its contract researchers by introducing improved arrangements upon the basis of a careful analysis of the overall impact of the Company almost exclusive, reliance on the use of fixed-term contracts in relation to these and other members of staff. ensuring that all staff receive equal opportunity and diversity training Improve the Companys performance by recruiting new staff of the highest quality and motivating existing Colleagues. Review Companys staffing strategies, in the light of the objectives, in terms of the age, gender, ethnicity and seniority of the staff to be recruited, the balance to be achieved between the numbers of academic and support posts to be filled and the precise competences to be sought with regard to all advertised positions. Assess, through appropriate benchmarking of the performance of other like companies, the effectiveness of current search procedures and induction arrangements. Ensure that the company response to the Framework Agreement motivates and assists the retention of those staff who make significant contributions to the companys success, utilizing a diversity of approaches to reward and a flexible approach to career development which allows advancement and lateral development of jobs Enhance the well-being of all colleagues as engaged members of a caring Company community. Encourage productive and open interaction about concerns and issues, by, for example, making improved use of the communication channel afforded by the Staff Survey. Ensure the provision by Human Resources of a service which is highly supportive and regarded as both accessible and effective. Preserve the privacy and security of all colleagues in a period in which Company is attracting much external interest Task 2: Develop Vision, Mission, Objectives and Measures. A) For your chosen organisation, list the down its ethical, cultural, environmental, social and business objectives. How are these influenced by the current business and economic climate? Toyotas objectives are discussed below: Business objectives: To maximize shareholders wealth and giving them returns on their capital invested. Effective working capital management Cost management Quality production Resources utilization (manpower, capital, assets and other) Public image in market (national and international) Overcome competition Ethical objectives: No compromise in ethics True and fair presentations, comply with law and standards (in United Stated list and tick basis whereas in The United Kingdom follow what standards say if not explain why?) Maintain highest level of honesty, integrity, professionalism and ethical behaviours. Cultural social and environmental objectives: See foreseeable future needs, companys responsibilities as a manufacturer company and always take proactive steps that benefits customers as well as society. Proper waste management as a corporate social responsibility Protect whistle blowers and have regular meetings and review on social, cultural and environmental issues. Guarantee safety, peace of mind and comfort to its valuable customers Quality production ( Toyota has commercialized vehicles such as the Prius hybrid vehicle that achieve superior driving performance, in addition to high fuel efficiency and low exhaust emissions, source www2.toyota.co.jp). Employment generation. In present, business market has been worse ever due to hard time of recession. Because of economic recession most industries are facing huge wealth loss. As a result Toyotas sales percentage has been effected and having hard time to meet its first and important objective. Company believes it will be better once the market revive. Due to current market situation people are forced to leave their job and are made redundant. However to meet its business objective company has adopted JUST IN TIME (JIT) principle. To make best use of the staff idle time the company staff has starting engaging themselves on activities like promoting green clean environment. Therefore, although the market and economic situation influence the objectives of the company but it depend on how can it be minimised and managed. B) Describe the role of vision and mission statement of chosen organisation. Mission Statement Toyota is a very successful manufacturing company with a mission to contribute to peoples lifestyles, society, and economy through automotive manufacturing. The company is to benefit people worldwide with an affordable automobile. Furthermore company wants customer satisfaction, safety, peace of mind and comfort which protects the goodwill and ultimately provides very attractive returns to its owners. Some of the corporate principles of Toyota are: Respect each trading countrys language and culture. Provide safe and clean product to enhance quality of life through the companys activities. Create new technologies to meet customers changing demand Foster corporate culture and built mutual respect and trust between labour and senior management. Work together with its partner to achieve mutual benefit together with long term growth. Vision statement Toyota aims to achieve long term, stable growth in harmony with the environment, the global economy, the local communities it serves, and its stakeholders. (Hiroshi Okuda, Chairman, July 2003) Company aims to continuously offer its customer combination of environment friendly, safe and comfortable quality automobile and continuously improve: Customer services Quality and design Economic and durable The details of companys mission and vision are stated above and below are the explanation of its role: Role of vision and mission statement Figure1.  Key Roles of Mission and Vision (Source: http://www.flatworldknowledge.com/pub/1.0/principles-management/29026 ) Mission and vision is all about organizations objectives and purpose. As in the figure above mission and vision statement helps to set companys strategy. Mission and vision statement acts as a stepping-stone for the employee for better understanding of companys strategy and its implementation. These statements helps to shape companys strategy and can helps in evaluating performance and achieving its targets. For instance, in this case of Toyota Company, it is moving forward vision urges management to find newer and environmentally friendly way of delighting the purchaser of their cars. Therefore the success of business depends upon how well its mission and vision statement are stated and to achieve those how well the strategy are planned and implemented. C) Indicate how it is possible for an organisation to evaluate the achievement of its objectives: There are three important parts for the evaluation process: By making the group of 4 to 5 stakeholders with experts objective achievement need to be evaluated which helps to measure the level objectives met against the objectives and plans set. Forming the group of leaders evaluation of achievement in percentage of their ideas and goals is measured. In fact this stage indicates the level of attainment of the strategic and significant goals proposed by leaders. Social evaluation: for evaluating quality, attitude, work efficiency, work effectiveness, justness and influences from customers and society. The primary phase of performance evaluation is conducted by a numbers of people (5 to 8) who can be from both internal as well as external of the organisation to examine accurately and correctly without biasing report in one direction i.e. independent of others. Second phase evaluation is done by senior leaders of the organisation and the social appraisal is carried out by group formed from representative of given social aspects above in chart. Therefore the evaluation process is 360 degree and it is the combination of both bottom-up and top-down approach. Phase Assessors Number of Assessor Objective Achievement Internal/external examiner including expert 3-5 Leaders evaluation Top level managements (directors, chairman, CEO, stakeholders, departments managers, etc.) All leaders almost Social Appraisal All person concerned with community and society like community members, environmentalist, government representative, citizen representative, employees or staffs themselves, human rights 360 social entities including customers (Source: Book on Corporate strategy 2001 written by: Mk Bhatt) Task 3 A) Discuss how a timetable for strategy implementation can be determined. Include a sample timetable, to include key milestones and their timings After overall planning and formation of organisations strategy it is important to bring it in practise with the obligation to finish by its deadline. Every project and plan has its life and for the given time table it is assumed that the first stage starts from first week of November with a deadline of October 2014.each activities are evaluated, analysed, reviewed and reported on yearly basis or half yearly if required. Implementing HRM Strategy The framework agreement implementation by staff and company corporate objectives in both the treatment as well as management of staff. All colleagues well-being enhancement for making employees engaged member for company caring. Motivating all staffs and recruiting new quality staffs to improve the performance and compete in the market Pursue true and fair guidance principle in relation to company behaviors Implementing Marketing Strategy Advertising, Join The Chamber of Commerce, Participation in Car Shows B) How might the dissemination process be used to help an organisation gain commitment to its strategy and the implementation of this? Monitory term is not always sufficient to bring commitment and motivate people to follow vision of the organisation. Positive outcomes and commitment from staff in the organisation can be obtained by practising 3 complementary and distinct leadership (Antonakis and House 2002; 2004). Among all the complementary and distinct leadership, successful cascading leadership takes place in 3 stages: Stage1: Creating vision stage, Stage2: Created vision and strategies distribution, and Stage3: Monitoring and controlling the effect of the stage 2. 1. Vision creation stage: For this propose, a team of stakeholders with experts come into play that go through number of analysis and deep understanding of different images of the company future. In order to make vision realistic, it must be formed in the form of pictures so that it can be easily felt, understand, and followed by followers and this will also implicate follower action (Den Hartog and Verburg 1997). All the team members must show their equal participation and contribution to the vision formation. At this stage need, importance of strategic initiatives must be articulated to gain the agreement from the all followers and make vision to happen. 2. Using Effective communication distributing the formed strategies and vision: To make mission, vision and strategies formed successful, it is necessary to share this information to all level of organisation ranging from higher level of management to lower level of management. Very effective channel for communication must be used to share and distribute this among the stockholders. Here, the formed vision is converted into concrete actions, and then the implementation plans and milestones are set. 3. Monitor the impact of stage 2: Regular monitoring is very important to know how effectively works are going on. It is necessary to share this information to all level of organisation ranging from higher level of management to lower level of management. Very effective channel for communication must be used to share and distribute this among the stockholders. Here, the formed vision is converted into concrete actions, and then the implementation plans and milestones are set to share this information to all level of organisation ranging from higher level of management to lower level of management. Very effective channel for communication must be used to share and distribute this among the stockholders. C) Describe the importance of monitoring and evaluation of new strategy. Outline how this might be achieved. Importance of Monitoring Monitoring of any new strategy from the time of implementation to its completion is very important in order to make comparison against plan developed and past strategies. The effectiveness or non-effectiveness of any strategy can be only determined by its monitoring after implementation. Therefore all the strategy, not only just new, must be monitor toed in the business process. It also helps to identify and establish what is happening now, what may happen in the future and then compare these trends against existing policies and targets to determine what needs to be done. Once the data or observation is made on the implemented new strategy we do evaluation of that to be sure about effectiveness and efficiency of that particular strategy. Once it is evaluated, it will be helpful for future level of effective strategy formation. Monitoring and evaluation process moves together and can be achieved in the following ways. Determine what to measure: Identify who will be involved in the design, implementation, and reporting. Engaging stakeholders helps ensure their perspectives are understood and feedback is incorporated. Clarify scope, purpose, intended use, audience, and budget for evaluation. Develop the questions to answer what you want to learn as a result of your work. Establish Predetermined Standards: Indicators are meant to provide a clear means of measuring achievement, to help assess the performance, or to reflect changes. They can be either quantitative and/or qualitative. A process indicator is information that focuses on how a program is implemented. Measure actual Performance: Determine the data collection methods like Examples of methods are: document reviews, questionnaires, surveys, and interviews. Analysis and evaluation: Review the information obtained to see if there are patterns or trends that emerge from the process. Evaluation and Control The process of analyzing data and understanding findings should provide you with recommendations about how to strengthen your work, as well as any mid-term adjustments you may need to make. Communicate your findings and insights to stakeholders and decide how to use the results to strengthen your organizations efforts. Monitoring and evaluation not only help organizations reflect and understand past performance, but serve as a guide for constructive changes during the period of implementation. Conclusion From my evaluation, I have realised that the measurement of the performance had been based on communication, human resources commitment, finance, cost and time. The overall result reveals that the strategy which was used by the company was successful as the added to the organisational core competencies shows that the company has the ability to face the future competitive factor that might be prevalent in the business environment in the nearest future. The company, by believing in the committed leadership could achieve its strategic because the company has lots of consistency in the commitment.