Recent orders
Toyota-Financial Analysis
Name
Professor
Course
Date
Toyota Company Performance Analysis
Introduction
Toyota Company is one of the known Japanese automotive producer that has its headquarter in Karachi, Japan. The company consists of more than 500,000 employees worldwide as indicated its website in January 2014. It was also ranked as the 14th largest company in the world in-terms of revenue. In 2012, the company was rated as the world’s largest automobile manufacturer by production. In July, the same year the company reported a production of 300 million vehicles (Cole 30).
How to determine the best Performance Measure of the company
Based on the above information about the company, it was worth for the corporate financial department of the organization to determine the performance of the company. The most crucial steps that the company has been experiencing is to determine the best framework to use for the analysis. For this case, Toyota has been using various measures but one of the most dominant one is the use of both financial and non-financial performance measure among other tools such as the use of the responsibility reports. The company being one of the largest in the world it used different protocols to determine the above performance tools: the department employees Job satisfaction rate, the efficiency of the employee in the company, the growth of the company, and the profitability of the company in the last 2 years were among the foundations used to determine the performance tools.
Decentralize and use responsibility accounting
One of the tools that Toyota uses to determine the performance of all the employees especially in the corporate finance department is the use of responsibility accounting and decentralization of business roles in the company. Toyota uses this tool to determine the performance of the employees because, the system creates a definite plan for each segment of the department hence able to allocate staff, resource as well as evaluate the effectiveness and efficiency. Responsibility accounting also improves the motivation of employees who on return improve their level of performance (Liker, Jeffrey and Hoseus 40). This is because responsibilities are properly directed to qualified individuals. This feature of the responsibility accounting helps evaluate the performance of employees easily because roles are specifically assigned hence easy to evaluate.
Performance evaluation systems and how the balanced score card assists companies to evaluate performance
Toyota’s corporate financial department uses performance evaluation systems to determine individual performance. The system work hand -in- hand balance scorecards to helps the company to evaluate the performance of the department and at large the entire company. Moreover, the scorecard helps the Toyota to provide the management with true picture of the business operational and offers immediate strategic information to the stakeholders and the employees in the department.
Functions of Responsibility Report in reporting cost, revenue and profit centers
Responsibility reports are comparison analysis that Toyota uses to compare itself with other companies. It helps the company compare its production costs, revenue, and profits annually with its competitors (Micheline 12).
Evaluation of the contribution of financial and non-financial performance measures
For example, this paper uses growth ratio as a non-financial performance measure used to evaluate the performance of the company. According to the ratio of growth, it indicates that the company has a steady growth over the years. In addition, the income statement has been used to depict the performance of the company in terms of monetary performance. The monetary performance according to the statement Is that the company is performing excellently. This has been indicated in the appendix
Conclusion
Thus, both the non-financial and financial performance measure used have been important in evaluating the performance of the Toyota Company. However, the company should consider employing more performance tools.
Works Cited
Cole, Robert E. “What really happened to Toyota.” MIT Sloan Management Review 52.4 (2011): 29-35.
Liker, Jeffrey K., and Michael Hoseus. “Human resource development in Toyota culture.” International Journal of Human Resources Development and Management 10.1 (2010): 34-50.
Maynard, Micheline. “Toyota will offer a plug-in hybrid by 2010.” New York Times, nytimes. com (January 14, 2008) (2008).
Appendix
Income Statement of Toyota Company
Income
Growth Ratio
Toyota uses low cost strategy will Coca-Cola uses differentiation strategy
Short Answer Practical Questions
Name
Affiliation
Set 1 Questions
Question 1
Toyota uses low cost strategy will Coca-Cola uses differentiation strategy. Both the companies use Strategic Total Rewards Management. This is one of the best strategies used by various other companies around the world. As for the case of an IT company in the UAE especially Dubai it is better for it to also adopt a Strategic Total Rewards Management. This is a better total reward strategy. The use of strategic Total Reward systems is considered as the best amid all the other strategies that companies should adopt. As of the case of an IT company in the UAE, it should adopt such a strategy in order to pursue the current IT market. Due to the fact that the IT market in the UAE has already bloomed, such a company needed to strategically determine the best interest of the people especially its employee in order to motivate its workers so as to increase it marker domination.
Question 2
The level of rewards determines the extent at which the performance of an organization will be. This outcome is evaluated based on the motivation the employees get. It is clear that highly motivated employee are industrious and eventually produce better performance. Most organization around the world as well as others in the UAE get low performance due to low motivation levels of rates of their employees. As a result the outcome of the does not meet the goals and the objectives of the organization or businesses. Therefore, organization should ensures that they motivate there employees by giving them rewards that are in accordance to their performance. Employees should be paid based on their output.
Question 3
The following are the forms of pay that one can get from work; guaranteed pay, variable pay as well as equity based pay. However, on the personal list the only pay is benefit pay. Based on an employee’s perspective, the best form of pay is guaranteed pay while to that of the employer it’s the variable pay. The reason for stating that employee prefer guaranteed pay is that they are sure that at the end of the day of month or contract they are sure of getting their pay. On the other hand, employers do not prefer that because they consider that such kind of pay will not favor performance. They prefer that payment or reward is made after the performance is evident.
Set 2 Questions
Question 1
The three selections are: lecturer, graduate assistant and the last is Tutorial fellow. The best way to conduct a job analysis for the above position is first to take note of the position that I would prefer among the three. This will be done using various sources of job information. For this case, I will collect all the needed information from friend as well as get the information from the media such as company websites and newspapers. I will evaluate the above three jobs based on their salary, scheme of services as well the duration of the contract offered. The rationale behind choosing the above is that is not only gives me the best time frame to get the needed job but also to secure the most flexible of all. However, I consider that job analysis can be undertake from other different perspectives but the most considerable one is using job descriptions. Sources of job data and information can also be obtained from third party organization that render job analysis as well as conduct recruitment and selection.
Question 2
First the base pay structure should take into consideration of the level of education the employee has, the audience he or she is yet to attend to, the level of difficulty will also be considered when I determine the base pay structure, and overview of the task to be performed by the employees. In addition, the nature as well as the working environment will also be considered when structuring the base pay structure. An evaluation of the pay structure should also be on board so as to determine the base pay for each of the employees in the organization. Apart from the above requirements, it will be considerable to consider employee representation during the structuring of the base pay. This will increase employees’ clarification of their demands during the structuring. Other stakeholder such as inflation and tax experts must also be on board to ensure that the base pay structure is up to date.
Question 3
Compensation plan
Category Revenue Commission Rate Commission Bonus and Sub Totals Commission Totals and Bonus
Commission Level One AED 750,000
1.5% 11,250 Commission Level two AED 600,000 2% 12,000 Total Commission AED 1,350,000 23,500
The commission will based on the sale of the products to the clients. The rate of commission is calculated based on the revenue collected. This denotes that the total commission with be determined from the two categories of commission of the level of commission and this will be 23,400 per month. The above compensation plan has deep rooted background from the services offered by the sales person. The hard work of the employee determines the end reward he/she will get. In addition, an employee had to attain a minimum of 70% of the entire sales for him to be considered for a better pay of a guaranteed pay (commission).
Set 3 Questions
Question 1
Compensation can be defined as the returns that an employee gets from the work he/she does for an organization of himself. The level of compensation matters with the type of output from the respective employee. From a United States perspective, compensation is considered entitlement for work done. The latter means that all the employee have the right to be compensated not considering the output as compared to my definition. However, I consider that compensation should be evaluated in-terms of rewards since one is compensated with respect to the effort he or she has rendered to an organization or at the workplace. Despite the fact that the word had different definitions, it is vital to determine the nature of work we are into before defining it. For example, military personal are really entitled to their pay but a casual work in a construction site is rewarded for his service.
Question 2
Regulatory environment of employment in the UAE works under the free zone policy.
ISSUES UAE USA
Set up process The set up process in the UAE is not very hard, the process is easy for both the natives and the expatriates In the USA the legal and structural procedures are very hard making it difficult to set up.
Licensing options There are various licensing options available. The USA offers limited licensing options
Visas It is very easy to get an employment Visa to the UAE especially for SMEs Getting an employment Visa is very hard in the USA
Business Sectors The UAE favors tourism and SMEs business The USA is open to all sorts of business sectors
Employment Criteria In the UAE, the government is very concerned with the upkeep of employees as it offers 60% to the Emiratis and 40% to the expatriates The United States does not favor expatriates as it as it gives them less than 10% of available employment.
Question 3
Lecturer
This is a position that has a lot of prestige in the UAE. Most people are paid more than AED 15,000. It is ideal to consider that there are various factors that must be considered before, taking a lecturer position in the UAE. First, the individual should appreciate the fact that the person must be disciplined and has the highest level of education as compared to the students. For one to be a lecturer, he/she must have a master’s degree and above. A lecturer position is among the well-paying jobs in the country, but the provisions for the job are very high. This is because they are known to be the top cream of a nation. It is from such people that have other better people such as doctors as well as other politicians. Thus, the potential employee seeking such position should have outstanding public relation as well as credited student to teacher relationship. In addition, background checks are vital when handling such jobs so the employee should be aware that he/she has to undergo background checks before being enlisted or employed as a lecturer in the UAE.
Doctor
This is almost highly paid jobs in the UAE. Very few people have qualified to be doctors in the country. The job is highly paid with not less than AED 50,000 per month. The qualifications expected are high. A doctor need to be an exemplary medical performance before being employed. He/she also needed more than 5 years of experience before being employed to senior medical positions in the UAE. Having made the top jobs in the country, the job analysis of such a position should be very complex. The employee with such qualifications have to undertake serious job analysis to determine if there are able to meet the job description offered to them in the job adverts. Therefore, it is ideal that the employee seeking such working position should not only have a deep job search in order to ascertain the best job description, but also should take his/her search to government and non-governmental organization as they are the only areas that could offer such position. Due to the fact that the job is well paying it also calls for time dedication.
IT technician
This job pays less as compared to the above two in the UAE. Employee get even less than AED10, 000 for such jobs. IT technician jobs vary according to their level of education. Diploma and graduate employee are paid differently, but most of the jobs are for diploma holders. This informs the employee that the works can only be done with less qualification and handling it in more qualifications could lead to over equalization in the interview. On the other hand, the ideals is that the work could also be done with a graduate qualification but this can only be done with professional of higher job status. For example, there are IT technicians who are employed by large organizations like companies and other big organization. As for the case of the above, the qualifications goes even beyond mere graduate position to post graduate status. Thus, the ideals of such a job calls not only for a deeper understanding of the job analysis but also the potential employee ought to have proper sources of information and data about the job.
Toyota Strategic Management
Toyota Strategic Management
Author
Institution
Introduction
The importance of strategic management in any organization can never be gainsaid as far as safeguarding the long-term and short-term sustainability and profitability of the organization is concerned. It has been acknowledged as one of the most fundamental pillars of any organization, involving the identification, as well as description of strategies that managers aim at using in order to enhance their competitive advantage. It is worth noting that the competitive advantage of an organization is underlined by its profitability being considerably higher than all organizations in the industry’s average profitability. Varied definitions of strategic management have been devised. Nevertheless, it mainly revolves around a collection of decisions and activities undertaken by managers and which have a bearing on the performance of the firm both in the long-term and the short-term. It demands that the managers have comprehensive knowledge, as well as analysis pertaining to competitive ad general organizational environment in order to make the appropriate decisions. It is imperative that the managers undertake a SWOT analysis where they would examine the organization’s strengths, weaknesses, opportunities, as well as threats. This analysis allows them to optimize on their strengths, minimize their weaknesses, exploit the available opportunities and avert the effects of any threats. This underlines the complexity of strategic management. The process of strategic management is continuous involving the evaluation and control of the operations of the organization, the assessment of the competitors and setting strategies and goals that enhances competitiveness, as well as the regular reevaluation of the strategies to determine their implementation and effectiveness.
More often than not, organizations make mistakes that threaten their existence and cripple their competitive advantage. This is the case for Toyota Company. In the recent times, the Toyota Company has been dogged by massive recalls, thanks to the compromised quality of some components of their cars (Saporito, 2010). All in all, the company had to recall about 9 million cars in November 2009 as they were found to have been susceptible to unregulated acceleration, as well as balky brakes. Toyota had made previously made two small recalls in 2005 and 2007 after a rise in unintended acceleration accidents (Saporito, 2010). Initially, the unintended acceleration was blamed on floor mats, with Toyota Company putting the blame on their customers for “inappropriate installation of the floor mats”. It had stated that the accelerator pedal could be jammed in an open-throttle position in instances where the vehicle trim or floor mat came loose. However, investigations by the National Highway Traffic Safety Administration (NHTSA) in 2003 put the blame on the faulty gas pedals leading to the massive recalls to the tune of close to 3.8 million vehicles in the United States alone in November 2009 (Saporito, 2010). Needless to say, the company’s reputation was severely damaged at this time, and consequently its sustainability and profitability at least in the short-term. While the $2 billion losses in terms of repairs may count for something, the worst scenario was the inability of the company to salvage its name in time. The company has previously been known for its capacity to sight problems, eliminate them and even use them for its own gain, something that is credited with propelling the company into the realm of one of the world’s most admired organization (Saporito, 2010). Unfortunately, the company has been unable to replicate these past efforts. The situation is worsened by the internal wrangles between the top management on who is to blame, what should have been done and even who should guide the strategies (Saporito, 2010).
Nevertheless, the company established a plan that would restructure its domestic production structure. Initially, the company closed about 8 plants in the United States. Recalling the faulty vehicles and undertaking their repairs was one of the key strategies for salvaging its public image. While this may have come a little too late especially considering that the loyal customers had been given a reason to try out other brands, it is worth noting that it was effective at salvaging its name and reputation. The company reduced the trade-in prices of the cars, all in an effort to retain their customers. This is undoubtedly bound to work as it would mean that trying out other brands would be more costly to the customers than trading in their faulty cars. The strategy was in line with the company’s distinctive corporate culture that emphasizes on preventative measures and problem solving (Toyota, 2013). The company’s approach revolves around enhancing quality through its manufacturing processes, improvement of the quality pertaining to everyday operations, as well as strengthening the corporate governance (Toyota, 2013). In this regard, the company agreed with Kanto Auto Works and Toyota Auto Body that the two companies would be converted into Toyota’s wholly owned subsidiaries in January 2012 (Toyota, 2011). On the same note, Kanto Auto Works started merger discussions with Toyota Motor Tohoku Corporation and Central Motor Co. in an effort to improve the manufacturing specialization, as well as respond more accurately to the customer demands and lower the costs of production and development(Toyota, 2011). Each of the auto manufacturers would, therefore, have the capacity to execute the business strategy of the company as they are called upon to act in their own initiative in executing their roles in their areas of expertise. In this case, the company aimed at strengthening its supply strategy. While these may not have been entirely effective in regaining public trust, they may have been responsible for halting its fall beyond the fourth ranking.
Nevertheless, the president of Toyota Motors Co. outlined four other steps that the company would take in order to regain public trust. He stated that the company was taking responsibility for its mistakes, using them as a lesson and taking immediate actions to address the concerns of the independent government regulators and those of their consumers (Toyoda, 2010). As part of the strategies for ensuring that the company’s products meet high safety standards, Mr. Akio Toyoda stated that the company would create an Automotive Center of Quality Excellence in which top engineers would strive to enhance quality control and management throughout North America (Toyoda, 2010).
In addition, Mr. Toyoda stated that the company would enlist the services of blue-ribbon safety advisory group made up of experts in quality control and management to carry out a comprehensive review of their operations, as well as ensure that any deficiencies existing in the company’s manufacturing process are eliminated (Toyoda, 2010). This is done in an effort to ensure that its standards match the best industry practices. The fact that the findings of the independent experts and the company’s review was to be made public was undoubtedly bound to restore trust in the company as it created the impression that the mistakes were not deliberate and that the company was open to ideas on how to improve the situation (Toyoda, 2010). The most fundamental reason for the downfall of the company was its inability to act quickly to the complaints and resolve them in time. The president sought to assure the public that the company was investigating the customer concerns pertaining to the anti-lock brake systems of Lexus HS250h and the Prius so as to address the safety issue (Toyoda, 2010). He acknowledged that the current situation was predicated by deficiency of sharing information pertaining to quality and safety in its global operations. In this regard, the company was to increase information sharing and reach out to government agencies responsible for safeguarding motorists and passengers’ safety (Toyoda, 2010).
These solutions would e effective in restoring the company’s fortunes and enhancing public trust in the same especially considering that they meet the three criteria for strategic alternatives. These, according to Rao (2010), include feasibility, acceptability and suitability. Their capacity to meet these criteria is built on the fact that the strategies are in line with the corporate culture of the company. The company’s corporate governance is built on the conviction that the provision of products that cater to the needs of the customer is necessary for the achievement of long-term growth and stability. The strategies outlined by the president would strengthen the competitiveness of the company as it enhances transparency and aims at assuring the general public that it is getting the best deal in the market with the Toyota products.
In addition, the conversion of Kanto Auto Works and Toyota Auto Body into wholly owned subsidiaries that would undertake their own initiatives in pursuing the company’s objectives speaks of delegation of duty and a change in the organizational culture. As much as the subsidiaries would be responsible for their output and operations, they would still be answerable to the Toyota Company. However, their independence in the pursuit of the overall objective is in line with the belief in the company that every individual would like to make a contribution to the organization’s growth. This would inculcate a culture of self-discipline, which propels the prospects of the company to higher levels. On the same note, it is in line with the control organizational culture, where there is standardization, as well as well-designed structure that is effective for the enhancement of performance. Needless to say, the increased supervision is an element of control organizational structures where leaders monitor, coordinate and organize people and processes (Tharp, 2009).
References
Subba, R. P. (2010). Strategic management. Mumbai India: Himalaya Pub. House.
Tharp, B.M. (2009). Four organizational culture types.Haworth White Paper. Retrieved August, 2011, from HYPERLINK “http://www.haworth.com/en-us/Knowledge/Workplace-Library/Documents/Four-Organizational-Culture-Types_6.pdf”http://www.haworth.com/en-us/Knowledge/Workplace-Library/Documents/Four-Organizational-Culture-Types_6.pdf
Saporito, B., Szczesny, J.R & Schuman, M (2010). Behind the Troubles at Toyota. Times Magazine. Retrieved 14th March 2013 from HYPERLINK “http://www.time.com/time/magazine/article/0,9171,1963744,00.html” l “ixzz2NWEMsUUb” http://www.time.com/time/magazine/article/0,9171,1963744,00.html#ixzz2NWEMsUUb
Toyota (2013). Corporate Governance: Aiming to steadily increase corporate governance in the long term. Retrieved 14th March 2013 from HYPERLINK “http://www.toyota-global.com/sustainability/csr_initiatives/corporate_governance.html” http://www.toyota-global.com/sustainability/csr_initiatives/corporate_governance.html
Toyoda, A (2010). At Toyota, working to regain trust. The Washington Post. Retrieved 14th March 2013 from HYPERLINK “http://articles.washingtonpost.com/2010-02-09/opinions/36916151_1_toyota-team-members-andon-cord-quality-management” http://articles.washingtonpost.com/2010-02-09/opinions/36916151_1_toyota-team-members-andon-cord-quality-management
Toyota (2011). Annual Report: Restore and Renew Our Production Structure for Further Growth. Retrieved 14th March 2013 from HYPERLINK “http://www.toyota-global.com/investors/ir_library/annual/pdf/2011/p21.pdf” http://www.toyota-global.com/investors/ir_library/annual/pdf/2011/p21.pdf