Toyota Leadership and Change Process
The modern competitive environment within industries depends on the effective usage of innovative technologies and effective leadership. The dynamic and emergent changes are possible with references to the work of transformational leaders who can demonstrate the excellent ability to establish and encourage motivation and a clear vision of the company’s strategy.
In 2007, Toyota started recalling 55,000 automobiles. This period can be discussed as the pre-crisis stage in the company leading to the company’s decline.
To predict and overcome the development of the crisis, it is necessary to implement rational and effective procedures and strategies which are based on changing the current leadership style to the most effective one because of leadership failures.
Thus, despite the necessity to cope with the crisis effectively, the company’s leaders failed in relation to realising several important steps to avoid the progress of the crisis. As a result, the leaders failed in predicting the development of the crisis, in being transparent to improve the media awareness of the problem, in engaging the company’s stakeholders in solving the problem, and in creating the effective corporate culture.
It is possible to determine three main leadership styles. Autocratic leaders pay little attention to the opinions and needs of their followers. Laissez-faire leaders provide minimal involvement in the process. Transformational leaders can focus on the capabilities of their followers and guide them effectively to achieve the company’s goals.
Transformational leaders focus on the employee empowerment, the further improvement of the culture and strategy, and on the employees’ training and development.
Toyota requires the change of leadership and implementation of the transformational leadership style to achieve success within the industry.
Change Tool of Toyota Structure
The corporate structure of Toyota during the crisis period is based on the mechanistic design. The mechanistic design depends on the clear hierarchy, strict control provided by the leaders, formal and centralised structure, and on the usage of the vertical communication to exchange and share the necessary information.
The mechanistic design is not effective for the company’s development. That is why it is important to concentrate on the more progressive structure based on organic design. The characteristic features of the organic design are the integration, cooperation, work in teams, usage of the flexible and adaptive practices, decentralised structure, and rather informal communication.
As a result, the company’s employees become involved in the decision-making process, and the changes are implemented with references to efficient communication channels. Thus, the implementation of organic structure in Toyota leads to effective changes within the company and increasing the role of employees in the decision-making process with references to the usage of more flexible approaches and principles of integration.
Toyota Change Model
Toyota should use Kurt Lewin’s model based on three key elements of Unfreeze – Change – Refreeze to realise the necessary organisational change. Thus, the process of organisational change depends on three basic stages. During the first ‘Unfreeze’ stage, the leaders of Toyota Company focus on identifying and analysing the corporate issues concerning such aspects as quality, employees, customer relations, and the process of manufacturing. It is important to involve the company’s stakeholders in the process of identification and analysis to receive the complete vision of problems and stimulate their participation in the change process. The success of the stage implementation depends on effective leadership and management.
The next stage is the ‘Change’ stage when the company’s leaders should focus on outlining possible benefits of the necessary changes according to the set of factors. It is important to analyse benefits concerning such factors as employment, customer relations, market share, financial benefits, branding, motivation, and rewards. Managers and leaders should review the operational progress and pay attention to the change process’s effects on the mentioned elements of the business process to control the implementation.
The final stage is the ‘Refreeze’ stage when managers and leaders of the company identify the possible obstacles of the change process. The development of effective strategies and approaches to continue changes is realised regarding such fields as a reward system, feedback systems, and training facilities.