Introduction
The COVID-19 pandemic has affected the automobile industry in varied ways, including creating supply chain disruptions and changes in consumer behavior. This paper discusses how Toyota, a Japanese car automaker, will operate in a post-COVID world by evaluating the role that creativity and innovation will play in facilitating change within the organization.
The main drivers surrounding the future development of change strategies and the social and environmental application of the proposals will also be explored in the current review. Additionally, the role of corporate governance in fostering innovation and creativity in the formulation and implementation of these strategies is investigated in the study.
The analysis will be done by recognizing the social and environmental implications of adopting measures aimed at helping Toyota navigate the challenges posed by COVID-19. The findings of the investigation will be useful in preparing organizations to operate in a post-COVID-19 world.
Repositioning Toyota in a Post-2020 Pandemic World
Given the challenges brought by the COVID-19 pandemic, businesses have to rethink how they will operate in an environment characterized by uncertainty. The relevance of social and environmental issues in repositioning business processes in a post-pandemic world has recently come into focus due to health and safety concerns brought about by the COVID-19 crisis (Hemmington and Neill, 2021).
In rethinking the place of businesses in a post-COVID environment, five drivers are relevant to understanding the social and environmental ramifications of changes meant to prepare companies to operate in a post-COVID-19 world. They include value shifts, health concerns, financial anxiety, the quest for truth, and digital transformation (Jain et al., 2021; Hemmington and Neill, 2021). Given that the COVID-19 pandemic is ongoing and involves multiple variants of the virus, the pandemic is not expected to end soon (Eklund, 2021). Therefore, from the perspective of the “quest for truth”, Toyota has adopted government-led guidelines, such as social distancing and wearing masks, to control infections (Toyota Motor Corporation, 2020a).
At the same time, the company has demonstrated a shift in value from being profit-centered to health-focused by reducing its staff numbers and production volume to minimize the risk of infection (Toyota Motor Corporation, 2020a). As a health-based measure, Toyota has also reduced the number of dealerships and service center outlets for the same reason (Toyota Motor Corporation, 2020a). The goal is to minimize congestion and by extension, infection rates from the Coronavirus.
Based on scientific research showing the efficacy of vaccines as a tool for controlling infections, vaccination has been part of Toyota’s overall response to the pandemic. In this regard, it has joined other companies to promote a digital transformation agenda by using the latest technology to aid in the fight against COVID-19 (Toyota Motor Corporation, 2020a). To support this plan, it has developed refrigerated vehicles that would help the World Health Organization (WHO) to distribute vaccines around the world (Toyota Motor Corporation, 2020b). So far, the company has reported internal challenges and weaknesses in the adoption of some of the above-mentioned measures. Thus, it is critical to understand key drivers affecting the company’s adoption of future strategies designed to address the effects of the COVID-19 pandemic on its operations.
- Digital Supply Chain: Given the challenges posed by the COVID-19 pandemic on the operations of Toyota, key drivers that would be instrumental to its survival include the adoption of a digital supply chain system. A digital supply chain model is associated with the adoption of automated processes to manage an organization’s operations (UNCTAD, 2021). Toyota has adopted this system by moving its supply chain processes from a manual to a cloud-based framework (Garnsey, 2018). The technology provider is a Canadian-based company called Kinaxis and it intends to provide a global-based digital system founded on Toyota’s ability to plan and manage its demand and supply chain processes (Garnsey, 2018). The system is designed to optimize supply chain processes and be more responsive to customer needs. This digital supply chain model will be instrumental in helping Toyota to make sense of “what if” scenarios that characterize a post-COVID-19 environment. The model will also be important in understanding the overall impact of the change management process on its organizational activities (Mohsin et al., 2021). Additionally, a digital supply chain system will play a critical role in merging supply and demand side functions to better predict and calibrate the net effect of proposed changes on the firm’s marketing functions.
- Reskilling: Workforce reskilling refers to the acquisition of new skills and qualifications necessary for the completion of an employee’s job tasks. Relative to this assertion, researchers suggest that reskilling could be a vital process that is necessary for companies intending to manage the effects of the COVID-19 pandemic (Agrawal et al., 2020). Toyota has a tradition of reskilling its workforce by collaborating or collaborating with different parties or companies that offer valuable skills and resources needed for its adoption (Toyota Motor Sales, U.S.A., Inc., 2021). For example, in 2010, it collaborated with local communities and technical colleges in the US to develop one of the first iterations of Advanced Manufacturing Technician (AMT) (Toyota Motor Sales, U.S.A., Inc., 2021). To overcome the effects of the COVID-19 pandemic, Toyota may have to reskill its workers to adapt to new workplace conditions by assigning them new roles and activities aligned with the new business environment.
- Innovative Products and Services: Post-pandemic businesses are expected to be heavily dependent on “e-tailing” to gain competitiveness. “E-tailing” refers to the use of e-commerce strategies to facilitate business processes. Relative to this assertion, technology will play a central role in supporting business designs as workers play a secondary role in the completion of organizational tasks. At Toyota, the development of innovative products and services is designed to tap into this potential. In line with this vision, Toyota has automated all its customer service processes (Luthra, 2020). The company has also set up spraying booths in some of its dealerships to protect its employees and staff from infections (Toyota Motor Sales, U.S.A., Inc., 2021). Toyota is also investing its resources to revamp its online marketing strategies because it has identified this marketing platform as the main mode of communication for securing future revenue (Toyota Motor Sales, U.S.A., Inc., 2021). These measures have been adopted in the organization, in addition to current government guidelines currently being observed in the organization.
Creative Change and Innovation
The COVID-19 pandemic has increased the pace of change in organizations by making them adaptable to uncertainties and new business challenges affecting workplace safety. A survey of more than 1,500 companies conducted in 2021 revealed that innovation was a key tool in helping firms navigate the challenges brought on by the COVID-19 pandemic (BCG, 2021). Given its increased importance to a firm’s business operations, it is crucial for companies to allocate resources to support their research and development activities to find workable solutions in the adoption of new business practices to accommodate change.
- In the Organization: Managing creative change at Toyota requires its managers to address challenges affecting the business environment due to the COVID-19 pandemic. In the context of this review, procedures for managing creative change in the organization are addressed because creative change and innovation remain a priority for many organizations, as it is for Toyota (Kaur, 202; Ertel, 2021). Stemming from the background of the effects of the COVID-19 pandemic on business operations, Toyota will better manage creativity and innovation when efficiency is maintained while responding to the needs of the new business environment (Asensio-López, Cabeza-García and González-Álvarez, 2019). Additionally, creative change will be better managed in the firm when all relevant factors associated with the company’s business processes, including its social and economic implications, are discussed.
- People in the Organization: One aspect of Toyota’s creative appeal should be focused on performance measurement. This process involves identifying Key Performance Indicators (KPIs) and ways of celebrating them (Asensio-López, Cabeza-García and González-Álvarez, 2019). Project management should also be part of the company’s innovation readiness program as it relates to team processes and activities (BCG, 2021). In this context of the review, the main goal of Toyota’s managers is determining whether agile teams are working within the company with a common purpose of fulfilling its goals (Toyota Motor Sales, U.S.A., Inc., 2021). These teams are responsible for spearheading innovation and creative processes within the firm.
- Clients: Customers are an important stakeholder for Toyota because they drive sales and revenue in the business. The COVID-19 pandemic has affected how Toyota meets the needs of its customers because of the reduction in the number of staff at designated service points (Toyota Motor Sales, U.S.A., Inc., 2021). Managing the interests of customers in this environment requires Toyota to provide them with timely information regarding changes to the COVID-19 pandemic (BCG, 2021). This strategy may involve communicating changes to business operating hours or the closure of service centers.
Overall, the main forces affecting Toyota’s proposed change model are analyzed using Lewin’s change model below. Developed in 1947, this model adopts a dichotomous understanding of forces affecting change, with those that support and oppose it being on opposite sides, as shown in figure 1 below.
Lewin’s change model was selected for use in the current probe because it provides a balanced view of factors that impede or support change (van Hilten, 2018). According to Figure 1 above, Toyota has a history of innovation and a culture that supports creativity. Coupled with a positive attitude from managers who are enthusiastic about addressing present challenges using technology, Toyota has more forces supporting change as opposed to those that do not show the same optimism (Asensio-López, Cabeza-García and González-Álvarez, 2019). For example, the lack of timely information slows down the adoption of changes at the firm because health and safety guidelines are updated periodically (Dawson and Andriopoulos, 2021). Alternatively, innovation is critical in facilitating Toyota’s transition into a post-COVID-19 world.
Role of Corporate Governance in Creative Change and Innovation
A company’s corporate governance policy defines systems that managers or directors use to direct or control a firm. Corporate governance will play a critical role in facilitating change at Toyota because it affects the pace of adopting creative thinking and innovation in the workplace (Asensio-López, Cabeza-García and González-Álvarez, 2019). In the context of this review, corporate governance could play a critical role in promoting creativity and change at Toyota by defining, directing, and managing change in priority areas. Current CSR policies are focused on providing disaster relief support and transportation for people who are in need of help (Toyota Motor Corporation, 2020c). In a post-COVID world, the company’s CSR initiatives should be centered on raising awareness levels about the social and environmental implications of infection control measures adopted in the organization.
- Raising Awareness: It is important to understand the social and environmental implications of adopting innovative practices in the workplace to comprehend the scope of their effects on employees and local communities. However, there is also a need to raise awareness of these issues as the first step in adopting the proposed changes for managing the company’s operations in a post-COVID-19 business world (Tricker, 2019; Asensio-López, Cabeza-García and González-Álvarez, 2019). In this regard, Toyota’s corporate governance policies will play critical in raising awareness of the issues affecting the adoption of new business plans, including their social and environmental costs (Solomon, 2020). The goal is to develop a work ethic that is consistent with the needs and requirements of the organization in a post-COVID-19 world.
- Defining Priority Areas: In the new business environment characterized by increased uncertainty and changing workplace practices and attitudes in the automotive industry, Toyota needs to identify priority areas requiring attention in its change management system. Relative to this assertion, its corporate governance policies should highlight priority areas affecting this process, including setting a clear vision for the organization and explaining why companies innovate in the first place (Ottosson, 2018; Brown and Cowling, 2021). The second priority area should be identifying innovation domains (Mitchell, 2017). This strategy may be implemented by defining why the organization should create and innovate to remain competitive.
- Directing and Managing Change: The COVID-19 pandemic has created conditions for companies to evolve and meet present demands for goods and services. In this regard, companies can either choose to consolidate their operations or innovate to stay competitive. The decision on which strategy to follow is often dependent on many factors (Jain et al., 2021; Hemmington and Neill, 2021). Based on the proposed strategy options for Toyota, the Pugh OD Matrix described in Table 1 below uses resource availability, ease of implementing strategies, cost of implementing the strategy, and their effectiveness, as the main criteria for evaluating the proposed strategies.
Table 1. Pugh OD Matrix (Source: Developed by Author)
The criterion used to evaluate the strategic options for Toyota to embrace change in a post-pandemic world is based on resource availability, ease of implementing business strategies, their associated costs, benefits, and effectiveness (Jain et al., 2021; Hemmington and Neill, 2021). As highlighted in table 1 above, each of these evaluative structures is allocated different weights based on their importance and relevance to the change management process (Hemmington and Neill, 2021).
Alternative 1, which is the establishment of a digital supply chain, emerges as the best alternative for Toyota to pursue because it has the highest score of “3”, while the other two options have a score of 2. Based on the above findings, innovation, as opposed to consolidation, will be used to drive the company’s future operating strategy. Innovation is critical because it accounts for the effects of varying novel challenges affecting Toyota’s transition to a post-pandemic world (Mallin, 2018; Toyota Motor Corporation, 2020c). It is difficult to implement a consolidation plan in this context of review because of varied business customization models applied by Toyota in different markets around the world.
Conclusion
The findings of this study reveal that innovation is needed for Toyota to remain competitive in the post-COVID world. This finding means that consolidation would not be a suitable strategic fit for the organization, given the differences in the application of business models in various markets around the world. The wider use of the e-commerce business model and the World Wide Web will also play a critical role in nurturing the transition into a post-COVID-19 business world. The social and environmental implications associated with the strategic shift of Toyota’s business processes will be integral in understanding how the business survives in a post-COVID world. This analysis will be relevant in identifying problems or challenges that may occur in the implementation of strategies to navigate the COVID-19 pandemic.
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