Significant Changes of Toyota
Our choice to pick Toyota was due to the significant changes it has gone through over the years. When Toyota first came into the market; nobody was willing to buy this Japanese car that they knew nothing about. But as time has gone by they have proved themselves to be one of the most reliable cars that can be found in today’s market. A radio producer in Kenya once said ‘every car in front of you and behind you is a Toyota’ (Juma, 2002) and indeed it is true.
Toyota’s decision to make this hybrid car was driven by both internal and external forces. It has been noted that the ‘hybrid Camry will be the first commercially available hybrid vehicle built in Australia. The decision was announced in June 2008 to begin manufacturing a hybrid version of the Camry Sedan at the Altona plan in Melbourne from the beginning of 2010’ (www.toyota.com.au). Looking at the internal forces first Toyota is ‘committed to developing hybrid systems as a core technology. Globally, the goal is to reach one million hybrid sales per year during the 2010s. Toyota’s worldwide goal is to approach zero impact on the environment in all our activities, including vehicles and production. While we may never be able to achieve zero impact, we always strive to do better – and hybrid technology is an important part of that effort’ (www.toyota.com.au). There is constant need to improve their cars-not that they need that much improvement but in the sense of safety and efficiency for its customers. External forces are the need to stay on top of the competitive market. All automobile companies are constantly making a new car or adding features to a new car. For Toyota to maintain its name and customers and attract new customers the hybrid was the best way to go about this.
2. DRIVING FORCES
The forces which has no or minimal control by the Toyota Production System (TPS) are termed as External factors. These can be further classified into three categories. 1.Technological developments 2.Competitive environment 3.Social and Political pressure
2.2 Economic
With the current global financial crisis hitting virtually the entire world, and as mentioned above the fluctuating fuel prices, there is bound to be a change in the consumer spending and price of most commodities will definitely be affected. It is in this aspect therefore those organizations will have to change so has adapted to the dynamism of the ever rapid globe and become relevant to the consumer in both product and services that they do offer in the market.
2.3 Social
The current social trend is “go-green” which basically means being environmental cautious more of the eco-solution lean towards the conservation the earth- less pollution. The trend particularly in the automobile world is the one moving from fuel guzzlers cars to eco-friendly cars more of hybrid cars which the Toyota organization has done well to rebrand themselves’ as the automobile industry of the future.
2.4 Technological
Environmental factors have driven TPS (Toyota Production System) to excel in their Technological developments. As a result TPS introduced hybrid vehicles, which are more fuel efficient and eco friendly. This external factor has transformed TPS from an ordinary passenger car manufacturing company to a Technology innovative company.
With the new innovation particularly in the fuel conservation, Toyota Australia leads in the domestic market through its ‘variable value timing intelligent technology’ (www.toyota.com.au , 2009). The VVTI technology makes it stand out from the other car manufactures. The organization is also distinctive in its development management styles such as the ‘just-in-time’ and ‘Toyota production system’ (www.toyota.com.au , 2009) which are incorporated by the Toyota Australia.
2.5 Competition
Competitors in the automobile industry have been a key player for TPS development. In order to sustain in the market TPS reengineered some technological advancements and gadgets from their competitors such as Cruise control, Auto gearing in their products. (Driel, Dolfsma, 2009)
Competitors in the automobile industry have been a key player for TPS development. The automobile industry has the most furious competition in the world, with the greatest Toyota competitors being, Honda which is from Japan. Toyota however stands alone due to its capability to change its technology and conform to its changed environment, particularly the fuel efficiency aspect
3. CHANGE PROCESS & MODELS
Following the strong desire that both the Federal and Victorian governments had for new environmental friendly technologies; Toyota decide to come up with an eco-friendly car, the hybrid. In addition to that; ‘the growing demand for our Prius hybrid also confirmed that there is a need for more hybrid models in our line up’ (www.toyota.com.au).
As purported by the ‘equilibrium theory of change’ (Abernathy & Utterback, 1978; Imai, 1986; Tushman & Romanelli, 1985) comes the crucial fundamental understanding that ‘change occurs in a series of radical and incremental changes’ (Abernathy & Utterback, 1978; Imai, 1986; Tushman & Romanelli, 1985). With emphasizes from (Kofoed, et al.2002) stating in other words that ‘the above theory claims that an organisation-just like an organism- is pressured by periodic environmental events to change dramatically or else perish’. So strong is this notion that it is further illustrated without any reasonable doubt by the Toyota organisation worldwide and to be specific Toyota Australia too. The Toyota Australia has conceptualized the essence of the ‘equilibrium theory of change’ (Abernathy & Utterback, 1978; Imai, 1986; Tushman & Romanelli, 1985) more so by embarking on radical changes that are all geared towards the improvement of structural process and systems within the organisation. The Toyota Australia uses both the continuous improvement process and re-engineering process.
3.1 Continuous improvement process
The essences of Toyota Australia continuous improvement process is its quality management programmes and to be emphatic ‘Toyota production system’ (www.toyota.com.au). The organisation through the ‘Toyota production system’ (www.toyota.com.au) are enabled to provide its customs with the highest quality cars and at the same time services. At the heart of this system is the ‘Kaizen’ (www.toyota.com.au) which is the ‘absolute elimination of waste and helps workers to be more efficient’ (www.toyota.com.au).
3.2 Re-engineering process
As mentioned before, Toyota Australia makes use of this process because it has identified its distinctive competences that differentiate itself from other auto-motive industries are the fuel efficient cars that they produce. The organisation emphasises is on high-quality performing fuel efficient engine cars, ‘at lowest possible cost, in a timely manner with the shortest possible lead times’ and its ‘Just-in-time management schemes’, (www.toyota.com.au). The car prices are relatively cheaper in comparison to other brand of cars from different industries. The core process without any doubt is the ability to come with a hybrid car of the future, since customers are keener about other alternatives of fuel consumption. The ability of such innovation adds value to customers thus the perception that, Toyota Australia is a ‘series of processes from strategic planning to after-sales’, (Robbins & Judge, 2007).
3.3 Lewin’s three step model
Lewin’s three step model of unfreezing, movement and refreezing can be noted in the change cycle used by Toyota. Unfreezing is the process of overcoming pressures of both individual resistance and group conformity (Robbins, 2007, p651). This is the status quo that all automobile companies share. Then comes the movement stage that transforms the organisation from the status quo. Toyota’s movement stage was to develop the hybrid that has both petrol engine and an electric motor which recharges itself as the car is driven. The refreezing stage involves stabilizing the change model. This is quite evident in Toyota as seen in the success of the Prius. Sorensen adds on by telling us that companies with strong cultures excel at incremental change’ (2002).
‘The Prius has been recognised globally as a ‘clean’ vehicle achieving many awards and certification to the toughest environmental standards in the world. Many other engine technologies are yet to achieve emissions low enough to satisfy these emerging low emission standards’ (www.toyota.com.au). This is bound to bring about a competitive advantage over its rivals. Imitation of this may be quite costly and take
Developing such a change has involved a lot of processes, knowledge and most importantly costs. Toyota is still very committed to its customers and maintains that trust by developing this new car that not more efficient but also environmental friendly for our future. To show its loyalty customers are guaranteed to an after sales service for three years or up to 600,000kms. As we have been told by Toyota; ‘We are committed to sound environmental management for a sustainable future which in turn improves our business performance. Toyota Australia’s environmental performance, initiatives and technologies are further explained throughout this site’ (www.toyota.com.au).
3.4 Organisational development model
Toyota Australia is an organisation whereby people are given respect and this aspect of the organisation is enshrined as part of its core value thus making it different, more of a standalone auto-motive industry. The other aspects of this change model that are used by Toyota Australia are trust and openness. These two characteristics are nurtured through having ‘authenticity, openness and a supportive climate’ (Robbins & Judge, 2007) in the organisation. Team building is also another characteristic that is embedded in the Toyota Australia organisation and in the processes helps in managing change. Last but not the least is the characteristic of confronting problems with again Toyota organisation having a notion of not ignoring or shrugging of problems. On the contrary these problems are dealt with amicably with innovation for a better organisation presently and in the future always in mind.
4. CONCLUSION
‘If an organisation needs to survive, it must respond to changes in its environment. When competitors introduce new products or services, government agencies enact new laws, important sources of supply go out of business, or similar environmental changes take place, the organisation needs to adapt’ (Robbins, 2007). Toyota has realized that early enough and brought out a car that will be very helpful in the future as it is now. This success and competitive edge has kept Toyota in the world’s top ranking.
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Driel V Hugo, Dolfsma Wilfred (2009), “Path dependence, initial conditions, and routines in organizations”, The Toyota production system re-examined, Journal or Organizational change Management, Vol. 22 No.1, 2009, pp. 49-72.
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Tushman, M.L, Romanelli, E (1985), “Organisational evolution: a metamorphosis model of convergence and reorientation”, Research in Organisation Behavior, pp 171-222
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Toyota: www.toyota.com.au (Accessed on 19/08/2009)
CIA factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/af.html (Accessed on 24/08/2009)
Juma, Emmanuel, Radio Kiss fm, Nairobi 6th June, 2002. 10.30am.
