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The Toyota Company’s People Management Report

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Updated: Jul 23rd, 2021

Executive Summary

This report is aimed at examining how internal and external factors influence Toyota. In particular, it is necessary to show how people management practices and power relations in this corporation are transformed.

Currently, the senior management of Toyota strives to empower managers and employees working in different divisions of this corporation. Moreover, this organisation attempts to foster cooperation between employees representing various business units. In this way, the corporation struggles to promote the identification and promotion of the best practices. These activities are also important for improving quality control. Additionally, this corporation tries to respond to new legislative acts that may be implemented in various countries. Finally, the changes in the company can be partly attributed to new technological trends. In the long term, these changes can produce a positive effect on the corporation.

The organisation has to address both internal and external stimuli that highlight the weaknesses in the organisational practices. These activities can be important for increasing the commitment of employees and making the corporation more agile.

Overall, the organisation should focus more on reducing the power distance of between workers and managers. More importantly, senior executives should encourage the initiative of employees and foster their cooperation.


The adoption of new human resource practices is often provoked by significant changes in the external and internal environment of a business. This paper is aimed at discussing how power relations and people management of Toyota are affected by various factors such as the new trends in technology, employment legislation, labour force trends as well as the need to remove internal inefficiencies. Currently, Toyota claims the title of the largest car manufacturer in the world. To a great extent, the growth of this corporation can be attributed to its production system, emphasis on efficiency, and innovative HR practices. It should be mentioned that Toyota operates at an international level, and the company has to adapt to a wide range of influences that can originate from different countries. The first section of this report will examine the changes caused by the internal environment. In particular, it is necessary to discuss how the management of the company attempts to respond to various inefficiencies that can impair decision-making and quality control. Overall, these issues are vital for the financial performance of this corporation. The second part will demonstrate how senior executive reacts to new trends originating from the external environment. These changes in people management and power relations will be examined by studying various documents released by Toyota Motor Company within the last six years. Secondly, it is important to examine books and articles that can throw light on the practices of this organisation. This willingness to change people management and power relations is important for increasing the resilience of the company.

Discussion and analysis

The changes prompted by the internal environment

In many cases, businesses have to modify their policies when they encounter a significant challenge that cannot be addressed with the help of existing managerial tools (Stone 2010). To a great extent, this argument can be applied to Toyota. At first, it is important to examine the internal environment of this corporation, especially the quality deficiencies of its vehicles. In particular, they had problems with foot pedals and unintended acceleration. These deficiencies resulted in recalls of many cars and significant financial losses for this corporation. More importantly, the reputation of this corporation was damaged. To address the problems, the senior management chose to change current HR practices. In particular, they decided to provide more autonomy to national divisions located outside Japan; for instance, one can mention the divisions in the United States (Snavely, 2013). In this case, local executives and managers representing various levels of the workplace hierarchy were given more control over the design and production of vehicles (Snavely, 2013). This argument is particularly relevant if one speaks about the design of the Toyota Furia and Toyota Avalon (Snavely, 2013).

To a great extent, these events prompted the changes in power relations in the company. In this particular context, power can be regarded as the ability to take part in the decision-making process by affecting the process of design and production. In the past, these employees were deprived of this opportunity. It is important to mention that before the recall scandal, regional executives had to coordinate their actions with the Japanese headquarters. As a result, decision-making was usually very slow.

Furthermore, many local workers believed that management simply disregarded their opinions. So, it is possible to speak about the shift in the use of power. In particulars, leaders are supposed to rely on their expertise to guide the actions of workers, while in the past, they could use their coercive power, connections, or ability to reward and punish. This is one of the main changes that should be identified because it is important for improving the sustainability of this organisation that should be able to respond to various challenges.

These inner problems had significant implications for the training of employees. The company strives to make sure that every worker can develop crisis management skills (Toyota Tsusho, 2013). These people should be able to act independently to identify and eliminate the problems that can be very urgent. For instance, these professionals must identify quality defects and take actions without referring to senior management. These developments can also lead to changes in power relations. In particular, workers can influence day-to-day operations of the plants. However, at the same, they are prompted to acquire new skills. Thus, one should speak about the changes in people management, because the company should provide additional training to workers and promote their professional growth. Overall, this change has been critical for resolving several power conflicts in this corporation.

However, the most important thing is that this empowerment of regional divisions can be important for the identification and promotion of the best practices throughout the corporation. It should be mentioned that Toyota has often been praised for its HR management practices. Moreover, its HRM policies have been emulated by other car manufacturers to become more competitive. Nevertheless, the management has laid too much stress to conformity, and this approach led to some negative effects such as the failure to detect faulty design processes and lack of initiative. In turn, current initiatives are supposed to address these issues and promote the initiatives of workers who should not be afraid of taking independent steps. This is one of the arguments that can be put forward.

Thus, it is possible to say that people management and power relations can be modified to eliminate internal weaknesses. In some cases, a single problem can highlight a wide range of inefficiencies in the policies. More importantly, it can necessitate profound changes in power relations and people management. Overall, such changes can eventually produce positive effects. This is one of the main points that should not be disregarded.

The transformation caused by the external environment

Additionally, it is important to consider the changes caused by the transformation of the external environment, for instance, the legislation of various countries. One should mention that this corporation struggles to provide more support to people who could have been marginalised in the past due to disability or age. In particular, one can speak about the amendments to the Americans with Disabilities Act adopted in 2008 (Bhattarcharya & McGlothlin 2012, p. 1284). The new regulations require businesses to provide additional accommodations to people with disability, even if their disabilities do not prevent them from doing daily activities (Bhattarcharya & McGlothlin 2012, p. 1284).

Moreover, one should remember about the legislation which prohibits age discrimination (Mann & Roberts 2007). At present, the company implements eliminate the risks of age discrimination and ensures that every employee with a disability can receive appropriate workplace accommodations. This policy is supposed to produce several important effects. For example, this question can be examined in terms of people management. In particular, these changes are supposed to create a more inclusive environment. Every worker should feel that the management does not disregard his/her needs. In the long-term, his/her commitment can also increase.

Furthermore, this strategy is important for avoiding lawsuits that can damage the reputation of the company and lead to considerable expenses. This argument is particularly relevant if one speaks about various developed countries in which the governments try to empower social groups that can be discriminated due to some reasons. In this way, the company raises the standards of people management in the organisation.

The management of Toyota has to adopt new policies while negotiating with employees and trade unions. Furthermore, one can speak about the adoption of the Fair Work Act 2009 in Australia. This legislative act provides additional protection to the employees, especially in the case of employment termination (Forsyth & Stewart 2009). This change is related to industrial relations, and it strengthens the bargaining power of employees and trade unions. As a result, the company has to provide more protection to its workers. This policy enables the corporation to comply with the regulations of various local regulations. This policy changes power relations because the employees can feel more protected, and the management has fewer opportunities for using coercive power in the workplace. Thus, one can argue that employment law is one of the main external influences.

Additionally, the corporation has to change its people management practices while operating in the European Union. The legislation of European countries lays stress on such an issue as the work-life balance of employees (Toyota Motor Company n. d). For example, these people have an opportunity to change their schedule and workload. Moreover, the company strives to reduce overtime hours to minimise work stress (Toyota Motor Company n. d.). In addition to that, one can speak about compressed workweeks. Yet, one should keep in mind that the management of Toyota strives to adopt the same practices across different divisions (Toyota Motor Company n. d.). In this way, this company strives to streamline its operations. More importantly, this policy strengthens the culture of this company since workers can see that they have similar opportunities. In the long term, this strategy can strengthen the commitment of employees and their motivation. Thus, it is possible to say that employment legislation adopted in a certain country or a region can influence people management practices in large multinational corporations that attempt to engage workers representing different divisions. This is of the details that should be taken into account.

The empowerment of employees can also be explained by the increasing cooperation of Toyota with other car manufacturers, especially those which have been able to achieve considerable technological breakthroughs. Currently, Toyota has to collaborate with various companies that help this corporation develop more energy-efficient vehicles. For example, Toyota has attracted the executives of Tesla Motor Company. As a rule, these professionals strive to adopt new approaches to HR management and power relations. For instance, they usually provide more autonomy to employees who should exercise more control over the process of design and manufacturing. To some degree, this policy is important for the adoption of more efficient practices. Thus, this case demonstrates that technological development can indirectly impact people management in the organisation, and senior executives and other business administrators should not overlook this influence.

There are other important impacts of technology development, and much attention should be paid to the role of online communication tools. In particular, the senior executives of this company and frontline workers have more opportunities for interacting with one another. This change is important for improving the communication among various stakeholders within this corporation. Additionally, it enables employees to influence the practices of the company. For instance, they can offer various recommendations to the management. Thus, they have more control over the production process, quality control, or administration. Technology is one of the drivers that bring changes in people management practices and improves the interactions among different stakeholders. To some degree, it makes Toyota, a flatter organisation in which bureaucratic barriers are gradually eliminated. Thus, this trend can profoundly transform the operations of this corporation.

Furthermore, it is important to consider the increasing movement of the labour force throughout the world because it brings significant changes in HR management. At present, thousands of people have to cross national borders in search of employment, and many of them work in various subsidiaries of Toyota. These external forces necessitate responses of HR managers. In particular, the management of Toyota strives to support diversity and multiculturalism in the workplace. The company employs workers who may represent the different religious, racial, ethnic, and religious group.

Additionally, the management strives to make sure employees with different backgrounds can work in teams and take part in brainstorming. This policy can be attributed to several factors, such as the immigration of skilled professionals from developing to advanced countries. Additionally, the management has to provide additional training to expatriates who may work in different countries. These professionals should be able to work in a multicultural environment. Overall, by focusing on cultural diversity, the management has succeeded in improving the communication between different stakeholders within the corporation. The main implication for people management is the creation of a more inclusive environment that encourages a person to feel more open in the workplace. In this way, one can strengthen the commitment of employees. These are the main details that should be distinguished since they can have significant implications for the entire corporation.

Furthermore, one should mention that the company to promote the communication of workers representing different divisions. To a great extent, this change has been caused by new trends in employment relations. In particular, modern international corporations attempt to foster communication between people representing different divisions. To some degree, Toyota also tries to implement this policy. For instance, it is possible to speak about the Toyota European Forum. This strategy has been partly by the need to promote cooperation between employees. In particular, modern companies try to strengthen the connections between different departments. This innovation also has significant implication for people management. The main positive effect of this policy is that workers can join their efforts to develop solutions to the problems that the company may face.

Moreover, this forum is important for discussing the interests of different stakeholders and finding a compromise that can benefit various parties that may not have the same goals. In addition to that, one should speak about the empowerment of workers who can express their opinions about the current policies and offer recommendations. This is one of the main positive impacts that should not be overlooked by the management.

These examples indicate that that the changes in the external environment prompt businesses to implement practices that can empower workers and protect their rights. As a rule, this corporation has to respond to the changes in the legislation of various countries. For instance, this argument can be applied to Australia, the United States, and countries, representing the European Union. Additionally, this organisation emulates the practices used by other businesses and reacts to labour force trends. Nevertheless, these actions are important for making this company more agile and competitive. Therefore, additional costs associated with these changes can be eventually justified from an economic viewpoint.


On the whole, this discussion indicates that the transformation of power relations can be a useful method for addressing new challenges that a company may encounter. Toyota has to adopt new approaches to power relations and people management. In particular, this organisation has to provide more autonomy to employees since this policy supports decision-making. The changes that have been described are critical for improving the sustainability of this corporation and its ability to respond to various stressors. These are the main aspects that can be distinguished. Overall, it is possible to offer several recommendations for the management of this business. At first, the senior management should make sure that employees representing different levels of the workplace hierarchy can communicate with one another without any obstacles. This task is critical for identifying and removing any problems or defects.

Furthermore, it is important to foster cooperation between people who work in different divisions. This partnership is vital for spreading the best practices across the corporation. Finally, the reduction of power distance can be important for increasing the agility of the organisation. These are the main recommendations that can be offered.


Bhattarcharya, A. & McGlothlin, J. 2012. Occupational Ergonomics: Theory and Applications, Second Edition. New York: CRC Press.

Forsyth, A. & Stewart, A. 2009, Fair Work: The New Workplace Laws and the Work Choices Legacy. Melbourne: Federation Press.

Mann, R & Roberts, B. 2007. Business Law and the Regulation of Business. New York: Cengage Learning.

Snavely, B. 2013. . USA Today. Web.

Stone, R. 2010. Human Resource Management. New York: Wiley.

Toyota Motor Company. n. d. Employee Relations. Toyota EU. Web.

Toyota Tsusho. 2013. Human Resource Initiatives. Toyota Tsusho. Web.

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