The Toyota Way is a set of principles guiding the Toyota Company, through maintaining leadership and installing the values of the company into its corporate culture. The principles imply the excellence in every aspect of business, from technological processes to management and innovations. The core of the Toyota’s philosophy is summarized in five components, which are continuous improvements, searching for the source of the problem when developing a solution, challenging oneself to improve, emphasis on team work and company’s interests, and respect (Nelson & Quick, 2009). The significance of this philosophy is that the philosophy is followed and integrated into the company’s distinctive culture.
The Toyota Motor Corporation is a multinational company headquartered in Japan and led by Akio Toyoda. With approximately 320,808 employees worldwide, the company is currently the world’s largest car manufacturer with 8,547,000 cars sold around the world, as of March 2008 (2009b). The presence in the United States can be represented through the company’s direct investments which constitute about $17.4 Billion (Toyota, 2009a). With a strong multinational presence and enormous financial investments, the leading role in the company’s success is given to the company’s customer-oriented approach, which is reflected through its employees and its culture. In that regard, the company’s main asset and competitive advantage can be understood rephrasing one of its competitors, a representative of General Motors, where he stated that stopping Toyota can be achieved only by destroying its culture (Nelson & Quick, 2009, p. 574).
The company’s foundation can be dated to 1937, when the Toyota Motor Co., Ltd was established by Kiichiro Toyoda. The establishment of the company was preceded by researches in the area of automobile engines, which major achievements include Toyoda Model G Automatic Loom and small gasoline-powered engine (Toyota, 2009b). Other significant dates in Toyota’s timeline include the merger of Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd into Toyota Motor Corporation in 1982. Nevertheless, a huge year for the Toyota Company can be considered 2008, when the company displaced General Motors(GM) for the position of the world’s number one automaker, a position that was held by GM for more than 70 years (Tierney, 2009).
The company’s motives for self excellence and focus on the customer, in addition to the economical advantage, lies in their firm belief that quality is not a negotiable factor. The aforementioned statement can be confirmed through the way Toyota manages its misfortunes. While other companies might seek excuses for the presence of flaws in their products, Toyota would recall its production back, with a belief that even mediocrity is a flaw (Nelson & Quick, 2009). Thus, the motives can be found in “Toyota’s competitiveness… [which] is rooted in an institutional obsession with improvement, a pervasive lack of complacency with whatever was accomplished yesterday” (Frahan).
A distinctive feature of Toyota’s way of leading business is its ability to adapt to changes. The “obsession” of constant improvements, as indicated earlier, was fully utilized to emphasize quality in its products. In that regard, it can be assumed that such adaptation and changes are paying off, considering its position as top automaker. Nevertheless, the company does not stop at the achieved, and is willing to adapt… again, stating that the company needs to “develop radical new ways of manufacturing vehicle components more economically” (Nelson & Quick, 2009). Judging by its history, it can be stated that it will definitely succeed in that too.
References
Frahan, A. H. d. How Toyota Is Rejuvenating the Idea of Corporate Culture. Frahan Blonde. 2009. Web.
Nelson, D. L., & Quick, J. C. (2009). Organizational behavior : science, the real world, and you (6th ed.): South-Western Cengage Learning.
Tierney, C. (2009). Global auto industry realigns. Detroit News. Web.
Toyota (2009a). Toyota in the United States. Toyota Motor Sales. Web.
Toyota (2009b). Toyota: Overview. Toyota Motor Corporation. Web.