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Toyota Motors Corporation: A plan for organizational performance Improvement

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  1. Executive summary
  2. Introduction
  3. Toyota Motors Corporation in perspective
  4. Analysis of Toyota Motors Corporation
  5. Ways to improve organisational performance
  6. Implementing the blue ocean strategy
  7. Human resources
  8. Understand and learning the organization
  9. Conclusion and recommendation
  10. Bibliography

Change is pervasive not only in people's individual lives but also in business organizations. Change is inevitable; it is also one of the constants in this world. Change will happen. Management theories emerged as a result of change ? from the scientific management to centralized organization; from decentralized management to empowered workforce; and from knowledge management to learning organization. In order to protect its current status, Toyota Motors Corporation, as they say, must run faster to stay in place. First and foremost, it must embrace change whole heartedly ? this means the entire organization as a whole rather than its parts individually.
The above changes unfortunately results in more cutthroat competition, not only in the automobile industry but in other industries as well. Toyota, one of the most admired companies in the world, had thrived on changes and the challenges they bring.
Toyota Motors Corporation all throughout its history ? from Kaizen to Toyota Production System to further Kaizen ? has strived not only to maintain its current market position, but to improve it as well. A testimony to the success of these efforts is Toyota's inclusion as one of the top ten Fortune Global 500 companies by Fortune Magazine in 2003. However, a review and analysis of the macro environmental factors currently affecting and will surely affect the future of the automobile industry shows that Toyota's current strategy is no longer enough for it to defend its market position. In 2008, for the first time in five years, its net operating income as a percentage of net revenues declined to 8.6 per cent. Other financial indicators such as return on equity and return on assets also declined during the year. Such decline, unfortunately, looks not an aberration but that it could happen again.

[...] Its ?just-in-time? supply-chain concept has become a model for manufacturers around the world, and not just for automakers? (Toyota Motors Corporation 2008) which is popularly known as the Toyota Production System or TPS. The TPS is one of the proofs of Toyota's dedication to its craft and industry. However, Toyota Motors Corporation can not simply sit back and just rely on its past successes. More than ever it needs to run faster to remain in the same place, so to speak. [...]


[...] a point that Toyota Motors Corporation must learn and relearn. The success of these companies and the failure of others lies in how these firms acknowledge or disregard conventional boundaries on doing business and specially, on how organizations think of and respond to changes in their operating environment. Ng emphasized the urgency of transforming an organization into an innovative one to be not victim of unplanned obsolescence? (2004, p. 93). An innovative organization is in which members are systematically (integrated, seamless and coherent) and systematically (with order and method) renewing the organization through innovation as part of their everyday existence? (Ng 2004, p. [...]


[...] How to Improve Organizational Performance [Recommendations] In Toyota Motors Corporation's 2008 Annual report, the company said that the automobile industry faces a turning point in its history, Toyota aims to achieve sustainable growth by building a more flexible and stronger corporate structure to meet the challenges ahead? (p. 1). The real question remains. That is, what specific strategies shall Toyota adopts in order to build a more flexible and stronger corporate structure when time and business environment dictate that it's ?Kaizen', Further ?Kaizen', and Toyota Production System are no longer enough for the current and future demands of the marketplace? [...]

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