Innovative Performance of Toyota Motor Company
Introduction
Most of the organization in the current days are greatly focusing on innovation. This is due to the fact that there is the existence of supporting technologies for innovation and this is also the best way to advance in the industry sector. Therefore most of the business organizations are now focusing much on innovation and ensuring that they are coming up with the right technologies for various functions for example efficiency in terms of production (Alon & Higgins, 2005). Innovation is also ensuring competitiveness as the firms are able to come up with more competitive products in the market. Therefore this study will seek to examine Toyota Motor Company’s innovative performance. This will be explained through the consideration of the company existing capabilities in the delivery of the types of innovation, the organization process to scan for ideas the manner in which the company manages uncertainty and failure in relation to innovation.
Overview of the Company
The comoany basically manufactures and also sales vehicles and their spare parts globally. The company operates internationally and that is in 53 overseas countries whereby it has been focusing on innovation and this is for example by coming up with the hybrid cars and also the self-drive cars which are doing well in the market. The comoany has also come up with cars with less in most on the environment and therefore one of the bet innovation that the comoany has come up with. It also has come up with its manufacturing companies in twenty eight countries and regions to support its innovation. The company innovation level is as indicated in the graph below.
Summary
Toyota Motor Comoany is one of the largest automaker in the world and that is by volume of the product that the company produces. The comoany is lo the Japanese auto industry pioneer which was established back in the year 1937. It is notable that the name of the comoany originated basically from the family name of the comoany founder, Kiichiro Toyoda. The company headquarters are located in Toyota City which is in Aichi Prefecture, Japan. The comoany is much focused on in novation in the motor industry and that is by coming up with more better car models which are environmental friendly and also self-drive cars. The comoany has also invested much in innovation to support new technologies.
Existing capabilities in delivering types of innovation
Toyota Motor Company is one of the largest vehicle production companies in the world and it has several capabilities that can enable it to deliver many types of innovation (Nkomo, 2013). The first capability of the company is taking research or science as the powerful tools to guide its work (Nkomo, 2013). Recently, innovation is enables by extensive research in the area of specialization. Therefore, the company has put up several facilities that are being used for innovation and making discoveries regarding the production of vehicles (Shang, 2017: 90). In this way, Toyota Motor Company has modern labs and also plants that can deliver many high capabilities in terms of research and innovation hence the delivery of several innovation types in vehicle production.
Besides, adequate and effective market research is also one of capabilities of Toyota Motor Company. Customer experience encompasses every aspect of a company’s offering (Varma, 2012). Regarding this, the Toyota Motor Company dispatches most of its researchers to the field for regular close monitoring of population and economic development to interview those more important people so that their customers can buy the cars they produce. According to the regular interview, the company can collect special information regarding their production, knowing what the customers are saying or what they want. Understanding market needs is the most important step to ensure the automaker imply the best innovation technology which makes it stay on the top of the market (Höflinger et al., 2018; 26-39).
Furthermore, the employees in the Toyota Motor Company are all with the highest qualification and professional experience. Toyota Motor Company takes employees who are most qualified regarding the production of vehicles and who have a good experience. As explained by Potter & Paulraj, (2020: 7), these employees can use their knowledge and skills to come up with different types of innovation which enables the company to perform well in the sector. According to research studies, researchers indicate that Toyota Motor Company is one of the companies in the vehicle production industry with the most qualified and experienced workers hence a capability in delivering types of innovation (Potter & Paulraj, 2020: 7).
How the organization is structured and how it has supported inhibited innovation
In Toyota Motor Company, its organizational structure is mainly based on the varied business operations of the organization around the globe (Mierzejewska, 2018: 69-83) Being one of the leading companies in the automobile manufactures, the company employs its organizational structure in supporting its business goals, as well as the strategic direction. This organizational structure was also proved by Mierzejewska (2018: 69-83). Mierzejewska (2018) stated that the Toyota Motor Company’s structure is linked to the old organizational structures which were applied in Japanese business. In addition to the experiences learned from the original Japanese companies, the organization structure of the Toyota Motor Company is also based on several business operations that are being carried out by the company in all parts of the world. This organizational structure is as indicated in the diagram below.
Regarding the global hierarchy, Toyota maintains a global hierarchy with its headquarters located in Japan. This headquarters is responsible for making final decisions in all matters concerning the company and making a decision on major issues. The geographic divisions for the company are also eight in number which include Japan, North America, Europe, Africa, Middle East, China, Oceania, Latin America, Caribbean and Asia (Masunaga et al., 2017: 701-708). Each of these regional centers and their heads have responsibilities to report their daily works and decisions to the headquarters.
In addition to the headquarters, the product-based divisions are the core department of the company. This is also another feature of Toyota Motor Company’s organizational structure whereby it is the set of product-based divisions. There are four of these divisions, including the Lexus International Operation which ranked at the top one in the North American region, and Toyota is number two for the Unit Center and other regions then lastly Japan and Europe.
The Toyota Motor Company’s organizational structure has fully supported continuous innovation mainly through the creation of sustainable growth with the application of strict policies which focused on company’s goals. That is, most of the company policies are innovation-driven policies and procedures hence enabling the company to ensured continuous innovation in its production and sale of cars (Bevilacqua et al., 2017; 769-794).
How people are recruited and rewarded
In Toyota Motor Company, the recruitment and rewarding of people are undertaken by the human resource department (Mierzejewska, 2018: 69-83) The Company has five recruiters in the headquarters whereby this process is being done from the headquarters with the help of eight administration managers. The company makes the use of Taleo for its applicant tracking, and the job advertisements are being carried out on magazines, televisions, the company website, social media sites and notice boards (Höflinger et al., 2018: 26-39). The recruiters in the company stay connected with documenting and researching process. The recruitment process for the company involves the online application which includes completing a questionnaire, and uploading with the applicant CV and the cover letter (Martínez-Cháfer et al., 2020: 89). After preliminary examination, the shortlisting process is carried out, and then a face-to-face interview is arranged for the candidates. Those who qualify during the interview are given the reporting letters, as well as a training before they start working in the company.
In Toyota Motor Company, there is a criterion that is used to reward people. The company has a sound reward system that is made up of three clusters based on performance. This kind of reward system is based on the seniority, total health management and bonus payment (Höflinger et al., 2018: 26-39). For example, in most cases, the company rewards its employees based on their performance at the end of each year. Those employees who perform best in their area of work are rewarded by the company, including, yet are not limited on gifts, vacation trips, and bonuses. Rewards are also give in the company in regard to the number contribution that someone makes in the company. Those employees who are able to come up with new technological ideas in the company production process for cars are also rewarded for this contribution.
Organizational processes the firm has used to scan for ideas
According to research studies, researchers indicate that Toyota Motor Company makes the use of a structured process to scan for ideas (Höflinger et al., 2018: 26-39). This process comprises scanning of the idea, idea occurrence, strategy formulation for the idea, resource procurement to implement, implementation of the idea and finally value creation (Bevilacqua et al., 2017: 769-794). The resources to implement this idea are technology, high qualified workers and financial resources.
The organization also makes the use of organizing and planning processes to scan for ideas. Organizing and planning are one of the best methods in idea scanning since it involves the systematic arrangement of the activities involved and what the company wants to achieve (i.e. corporate goals, products, and culture). That is, resource, such as research skills, finances, and technology use, are involved to implement the processes.
The other way through which Toyota does search for its ideas is through the customer feedback and recommendations. In the process that the company comes up with a given car produced under a certain technology, the company collects data about the car from the customers in the market and their suggestions. Then the company relates the customer recommendations and suggestions with the existing technology to come up with a new idea in the development of its cars.
How innovation challenges are identified in Toyota Motor Company
Toyota Motor Company identifies its innovation challenges through the collection of data from its customers. In the case that the company comes with innovation in production, it processes the products (e.g. cars) and then distributes them to the market. After putting the product on the market, the company collects data from the customers who buy these products and tries to analyze the data to know the response of the customers whether their innovation is working or not. The customers will inform the company about the strengths and weaknesses of their innovation hence this is one of the challenges of how the company identifies their innovation (Bevilacqua et al., 2017; 769-794).
Another way in which the company uses to identify the challenges of its innovation is through sales. If the company comes with a certain innovation, for example, the hybrid or electric cars and then the sales are very low, then the company knows that there is a challenge regarding this innovation. The level of sales that the company makes from a given in ovation indicates of how best the innovation is accepted in the market.
Strengths and competencies are another factors to identify the strength of innovation. Toyota motor company identifies challenges in innovation, for example, the newly made cars through checking on their strengths and competencies since this gives a clear measure in terms of performance. This is because a good innovation is supposed to be competent and also effectively serve the targeted purpose.
How innovation is practiced with external stakeholders
Innovation is practiced with the external stakeholders through the incorporation of their interest. According to Höflinger et al., (2018: 26-39), the external stakeholders are interviewed and engaged with the company innovation team to give their views and interests on what they expect the company to do or what kind of technology they expect the company to come up within the production of vehicles. This is for example the adoption of electric car manufacturing by Toyota Motor Company.
Participating in idea generation is another way through which Toyota Motor Company practices innovation with its external stakeholders. This is, for example, the companies like Subaru that partner with Toyota are given a chance to participate in idea generation and development concerning innovation in Toyota Company. This is one of the best ways through which the company engages most of its external stakeholders including the customers.
How Toyota manages uncertainty and failure
There exist many uncertainties and failures in the automotive industry where Toyota Motor Company operates. As mentioned by Mierzejewska, (2018: 69-83), the first way in which the company manages the existing uncertainties is through the use of the right technology. For example, most of the countries do not encourage vehicles that release harmful gases to the environment and to prevent market uncertainties, the company has changed its technology used in production for example the Double Overhead Cam technology.
The other way is through the identification of uncertainties and failure at an early stage and assessing them. By identifying the uncertainties and failures for example large amount of capital required, the established brand image and reputation and many more at an early stage, the company can decide to mitigate the uncertainties before they get to occur in the company while in its operations.
How Toyota reconciles exploratory and exploitative learning
Toyota Motor Company balances exploratory and exploitative learning to enhance its performance. It makes the use of exploration and exploitation to ensure radical innovation and improvement in a performance that is continuous (Masunaga et al., 2017: 701-708). Both exploration and exploitation are reconciled in the company to ensure a climate that support radical innovation activities through research and technology improvement.
In the company, it improves the organization’s performance in radical innovation through the encouragement of both exploitation and exploration and it is much less concerned with harming the company’s radical innovativeness than the need for continual improvement.
Recommendation for future innovation strategy of Toyota Motor Company
Toyota Motor Company should continue to undertake concerted efforts to strengthen its management platform and raise corporate value. The company should be able to make the use of the top-down form of management which is one of the best management frameworks for effective decision-making and effective operations (Smeds et al., 2003). This kind of management should be implemented in the headquarters of the company, its branches and subsidiaries, however, the top management of the headquarters should act as the final and oversight management of the company (Potter & Graham, 2019: 1216-1228). In the top-down management structure, there should be the senior managers of the company at the top level, then the middle-level managers should have responsibility to give various directions, and finally the base-level management is basically to assist in the middle-level management in giving directions.
To meet the needs of globalization, Toyota Motor Company, as the world’s leading company, should enhance the power of the workplace and diversity in the use of human resources, and strive to nurture global human resources. To achieve this goal, on the recruitment side of the organization, it is best to consider the external recruitment before carrying out internal recruitment (Engwall, 2014). Some workers have advanced their knowledge and skills and they can be able to fit in a higher position in the company. Therefore, the company can consider internal recruitment, for example, job promotions which also act as rewards to the employees. However, this kind of recruitment may decrease the diversity.
When it comes to scanning for ideas, Toyota motor company should be able to make the use of market scanning to search for the ideas, making it possible to respond quickly to the changing market circumstances. The company can send its team to the market to get the views of the customers and the types of vehicles they need (Masunaga et al., 2017: 701-708). They are also most likely to get the suggestions and feedback of the customers in the market. At this point, customers can be regarded as the powerful resources for the companies to get ideas on what kind of technology vehicles they need and what kind of vehicles to produce for the market.
In terms of innovation, the company should be able to involve its external stakeholders mainly by giving them a chance to come up with prototypes. This is one of the best ways in which the company can engage its external stakeholders in participating in the innovation process for production in the company (Potter & Graham, 2019: 1216-1228).
We also suggest that the company can identify its failures by checking on the extent to which the company achieves its goals both in the short run and in the long run. According to Höflinge2018: 26-39), this is one of the best ways in which the company has a clear idea or plan for the future directions. As the company checks on what it has achieved in a given period based on its goals, the company will easily recognize the areas whereby it has weakness leading to its performance.
As mentioned by Mierzejewska (2018: 69-83), the interviews in the recruitment process should be focused on testing the knowledge and skills that fit the position that the company wants to get an employee in. This will ensure that the company can get the best employees who are fit in the relevant fields hence ensuring the sustainability of the company in the production and also ensuring that the existing employees are able to generate new ideas to help the company in its production process.
Lastly, there are also uncertainties and failures which the company has faced before. To manage the uncertainties and failures in the company (Lin, 2018: 179-208). Toyota Motor Company should make the use of uncertainty avoidance schemes to avoid the occurrence of these uncertainties. The company can mitigate its failures by preparing for the failures in the early stage before its occurrence. This can be devising the proper methods for handling the failures if they occur in the company.
References
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