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Toyota: The History of Success

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History of Toyota

Toyota's origins lie in the Japanese weaving industry when Sakichi Toyoda invented the world's first automatic loom and, subsequently, set up the Toyoda Spinning and Weaving Company in 1918. His invention reduced defects and increased yields since a loom stopped and would not go on producing imperfect fabric and using up thread after a problem occurred. This principle of designing equipment to stop automatically and call attention to problems immediately (jidoka) remains crucial to the Toyota Production System today.

The loom impressed a British Company, the Platt Brothers, so much that, in 1929, they bought the production and sales rights for £100,000. Sakichi gave those proceeds to his son, Kiichiro, to develop automotive technology at Toyoda. This in turn led to the launch of the Company's first ever passenger car in 1936, the Model AA, and in 1937, the Toyota Motor Company was born. Production of Toyota vehicles outside Japan began in 1959 in Brazil and now, besides its own plants, manufacturing subsidiaries and affiliates in Japan, Toyota manufactures Toyota and Lexus brand vehicles and components throughout the world.

Look back at the history of Toyota, starting with the birth of founder Sakichi Toyoda. It traces the company's development from 1937 when Toyota Motor Corporation was established to when the two millionth Prius hybrid was sold.

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Toyota history: from loom to vroom

From one man’s inspiration to one of the biggest and most respected businesses on the planet, this is a brief Toyota history from its foundations to the launch of the company’s first domestically developed passenger car, the 1955 Toyopet Crown.

Toyota history: 1867-1937

Kiichiro Toyoda was the founder of what is now known as Toyota Motor Corporation. However, his inventiveness and business acumen was inherited from his father Sakichi Toyoda (1867-1930), who started his working life as a carpenter before finding international success in the production of Japan’s first self-powered weaving looms for the textile industry.

As a child, Kiichiro was fascinated by his father’s weaving machines and through a combination of observation and physical interaction became fully conversant in their workings. He gravitated towards engineering courses through school and university, and made excellent contacts with academics and like-minded students whose later careers would prove to be invaluable in his next venture.

Following his graduation, Kiichiro worked for his father and was tasked with overseeing the research and development of looms with automatic shuttle changing mechanisms. In a little over 20 years since Sakichi began his quest to improve the efficiency of the weaving industry, the family had built a successful loom manufacturing business. Towards the latter end of that time frame, Kiichiro’s further innovations finally made his father’s dream of automated looms a reality. Full-scale production of Toyoda’s new Type G automatic loom began in 1927, and capacity quickly rose from 300 to 1,000 units per month.

Toyoda’s automatic looms were widely acclaimed for their ability to increase productivity. Indeed, the technology was sought by textile companies eager to recapture market positions that had been lost during World War I. The largest of these was British firm Platt Brothers of Oldham, which in 1929 agreed to pay £100,000 for the rights to use Toyoda’s patented technology and therefore protect its key markets. Little was it appreciated at the time but Platt Brothers had unwittingly provided Kiichiro with the capital that helped provide the platform to fund his passion project – automobile manufacturing.

Evidently, Kiichiro had his finger on the pulse. His desire to diversify the Toyoda family’s loom-making business coincided with the Japanese government presenting a plan to develop a domestic automotive industry. So in 1933, Kiichiro established an automotive division within Toyoda Automatic Loom Works and recruited a small but passionate team of engineers and industry experts to assist him in this venture.

The team’s first task was to create a new engine based around Chevrolet’s contemporary ‘Stovebolt’ straight-six. While reverse-engineering this powerplant, Toyoda’s team was able to create improvements in the cylinder head and intake manifold, which in turn produced more power. A similar approach was taken with the company’s first prototype vehicle, the 1935 Toyoda Model A1, which was heavily influenced by the streamlined DeSoto Airflow.

Toyoda’s next prototype was the 1935 Toyoda Model G1 truck, which utilised the new Type A engine and a stretched version of the Model A1’s ladder chassis but with an in-house designed body. This truck was historically significant for being the first Toyoda production vehicle, and the first to be exported to foreign markets. Its immediate profitability drove the development and later production of the Toyoda Model AA saloon and Model DA bus.

Toyota: 1937-1956

Assisted by the introduction of automotive manufacturing laws in 1936, Toyoda’s new business was booming and had outgrown its position as an offshoot of its parent company. So in April 1937 the automobile department of Toyoda Automatic Loom Works was legally registered as the Toyota Motor Company Limited (now Toyota Motor Corporation), the subtle change of consonant within the founder’s surname delivering an appealing eight-stroke signature and more balanced pronunciation.

Operations at the Koromo Plant, the company’s new dedicated production facility, began in November 1938 with a staff of 5,000 employees and a production capacity of 2,000 units per month. Although the layout and workflow was based on large-scale production facilities in the USA, Kiichiro streamlined the process with an innovative, just-in-time production system that provided the early foundation for today’s Toyota Production System.

Japan’s wartime economy suffered severe material shortages, which led to the government prohibiting passenger car production in the late 1930s. During this time of restrictions, the fledgling Toyota company focused on supplying cars and trucks for military use, although Kiichiro took on personal projects developing electric vehicle storage batteries, diesel engines and alternative fuel technologies.

Just one day before the end of World War II, one quarter of Toyota’s new Koromo Plant was damaged during an air raid. But that didn’t stop Kiichiro resuming commercial vehicle production just three days later. Passenger car production was a little slower to get going again, primarily because restrictions limited numbers. Nevertheless, Toyota kept the wheels of industry turning by developing and producing 197 examples of the new, aerodynamically styled Model SA – the company’s first small passenger car – in the five years between 1947 and 1952.

But Toyota’s fortune was about to change. In 1951, Kiichiro instituted a five-year plan to modernise the company’s production facilities, which saw a shift to automation that allowed one employee to operate multiple machines. This required considerable investment, the return on which could not be guaranteed with small-scale production.

The establishment of Toyota’s new and highly efficient automated production method – now adopted worldwide as the Toyota Production System – initially targeted a doubling of the company’s existing capacity, which would take production from 1542 to 3,000 units per month. Yet by the end of 1956, Toyota was making some 5,000 vehicles each month. This rapid growth was spurred on by the sales and critical success of the 1955 Toyopet Crown, the first entirely Japanese-made passenger car, the first Japanese car to use independent front suspension, and the first Japanese car to be exported to the United States .

It was the fulfilment of Kiichiro Toyoda’s dream to develop and build a domestically produced passenger car. Sadly, however, the founder and former president of Toyota Motor Corporation never lived to see that dream realised. Kiichiro died suddenly from a cerebral haemorrhage in March 1952, aged 57.

Learn more about Toyota history: History of the Toyota Crown

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Human Resource Management Structure of Toyota

Introduction.

Human resource management plays a critical role in the accomplishment of organisational goals and objectives. The role of line managers in the running of multinational companies cannot be underestimated in a competitive global environment.

In this report, the Toyota Motor Corporation has been chosen due to the implementation of diverse HR functions in its organisation. The efficacy of line managers in the implementation of HRM responsibilities is emphasised.

In addition, it analyses the structure of the company’s human resource management. The report also provides an insight into the role of the HR practices in the management of a large number of employees.

On a different viewpoint, many businesses are restructuring their HR roles for better management of their employees to ease crises in the workplace, improve financial outcomes, and maintain organisational efficacy.

This essay provides a detailed analysis of the HRM delivery in the Toyota Motor Corporation by closely examining the role of line managers.

The Toyota Motor Corp. is a global company with fifty manufacturing companies and over one-seventy distribution centres.

It was founded in 1937 in Toyota, Japan. According to the company’s Annual Report (2014), the multinational offers a variety of products and services such as speciality steel, automobile parts, marine vessel engines, biotechnology, real estate, financial services, electrical components, and house appliances (Liker & Hoseus 2008).

The automobile and accessories company is regarded as the second largest in the industry after the General Motors (GM) Company. Various sources attest that the secret behind its position in the automobile industry hinges on its apt approaches to the selection of its workforce.

The human resource management department highly differentiates the diverse abilities of entrant employees to ensure that they fit in the correct job positions based on their skills, attitudes, and experience among other factors.

Besides, the administration of the Toyota Motor Company develops and implements strategies that improve the HR since it promotes the company’s position to stand against management challenges in the near future. The results of such strategies are seen in the firm’s growing profitability rates, especially in the past decade.

Furthermore, the Toyota Motor Company strives to create a sound working climate for its esteemed workforce. This objective is achieved by furnishing them with the necessary equipment, career development opportunities, and incentives to ensure sustained motivation and satisfaction.

The central management ensures that such activities are provided equally to all its branches worldwide. Various analysts have also predicted that the automobile company can lead the industry in the near future if the pace of development is kept constant.

Delivery of Human Resource Management in the Toyota Company

The delivery of HRM in the Toyota Motor Corporation involves a number of models that are deployed to manage the HR functions. The activities addressed by the HR approaches include compensation and benefits, employee and labour relations, and health and safety among others.

Liker and Hoseus (2008) reveal that the Toyota Motor Corporation is known for its timely production models and a prolific HR development culture (Liker & Hoseus 2010). The research revealed that the introduction of lean production ushered new responsibilities for the HR personnel (Yamamoto 2014; Liker & Hoseus 2010).

Furthermore, the restructuring of the firm’s traditional HRM structure is in progress. The plan is to align the human accounting function with the new HR responsibilities in the firm (Annual Report 2014).

A recent management crisis in one of the core branches of the Toyota Motor Corporation instigated moves to restructure its human resource framework.

Effective Leadership Style

The research revealed that the company adopts a high profile culture in its HR practices and policies. The organisation of the human resource functions is designed to guarantee satisfactory employee experiences. This objective is achieved through the efficient management of its human resources.

In addition, the company maintains a leadership style “TOYOTA WAY” that is based on its values, mission, and business processes.

According to Yamamoto (2014), the leadership style focuses on an unremitting improvement strategy that holds undisputable respect for not only its workforce but also consumers among other stakeholders.

The company’s highly structured HRM framework is strategically aligned with its philosophy to ensure the development of its goals to meet the growing demand for vehicles and accessories in the industry. As a result, the company has inevitably become a role model for many firms (Liker & Hoseus 2008).

HR practices and policies in the company aim at ensuring workforce integration, obligation, flexibility, and adaptability in an attempt to realise its esteemed organisational goals (Annual Report 2014).

The company’s leadership approach assumes unique values and strategies that are based on its guiding principles (Liker & Hoseus 2010).

Although the lean leadership style in the Toyota Motors Corp. has been deemed inspirational for many years, it has been variously disparaged for its parochially structured strategy (Liker & Ballé 2013; Shim & Steers 2012).

For instance, the company nearly overlooked an issue concerning the braking systems of its automobiles. This set of circumstances raised international concern over the safety of its vehicles.

It is true that Japan is characterised by narrow restrictions of business life. This situation recently forced the company to review its management and leadership styles to suit the changing global corporate environment (Liker & Ballé 2013).

The Role of Flexibility and Job Design

The role of flexibility, adaptability, and job design cannot be underestimated in a multinational company such as the Toyota Motors Corp.

The research revealed that autocrats have been leading the company; hence, the authority of the topmost leaders has been guiding its operations in all aspects pertaining to the design, development, and manufacturing of vehicles.

However, unremitting criticism forced the company to restructure its HRM strategies to accommodate the authority of teams to create avenues for flexibility in the firm. Flexibility in the automobile organisation has been strengthened by the encouragement of multi-skilling amongst the employees.

This strategy has ensured that workers can shift from one department following a rotational programme that depends on the tasks in progress. Flexibility has also been linked to the development of innovative practices in the Toyota Motors Corp.

The company has strived to maintain flexibility and adaptability by ensuring team authority rather than individualised management of power.

The establishment of teams has paved a way for flexibility in the Toyota Motors Corporation, as they are task-based; hence, they can be reorganised based on the prevailing production situations (Amasaka 2013).

The role of line managers in delivery HRM

The line managers in the Toyota Motors Corp. are well groomed to keep the company’s identity by ensuring progressive commitment, enduring innovativeness, and formulation and execution of sound decisions and standards of work.

According to Ryu and Kim (2013), the Toyota Motor Corp. deploys line managers who are charged with various responsibilities ranging from the allocation to the management of human resources in the organisation.

For instance, the product line managers are responsible for the financial gains and losses of products. Ryu and Kim (2013) reveal that the line managers play a paramount role in the execution of robust HR roles in the automobile company.

It is highly believed that the HRM activities in the company directly affect the outcomes of the employees (Alfes et al. 2013). Improved individual performance results in increased firm outcomes in terms of financial prowess and organisational efficiency (Friedman 2007).

According to Novicevic & Harvey (2001), line managers have taken the role of training, orientating, and motivating individual employees and teams in the giant multinational.

Devolution of HR responsibilities is an indisputable way of improving employee performance in the Toyota Motors Corp. (McGuire & Mylona 2008).

Line managers are in direct contact with the employees; hence, they easily identify their experiences with view of ensuring that they are provided with the necessary equipment, knowledge, training, and motivation to promote productivity.

The evaluation of the company also showed that the deployment of line managers improves conflict resolution, employee retention, and easing supervision costs among other benefits (Nehles 2010).

However, some underlying limiting factors that include overwork, short-range goals, and tendency to overlook organisational rules among others have been noted to affect the full engagement of the employees in their duties (Alfes et al. 2013).

Furthermore, the line managers play a crucial role in the handling of values and perspectives of the employees. It is believed that the training of employees is paramount to the accomplishment of its mission that aims sound innovation, designing, manufacturing, and distribution of safe automobiles (Cheng & Huang 2007).

This objective is achieved by keeping abreast with emerging technology that upholds energy saving and road safety. Most importantly, the personnel are thoroughly trained in new ideas to ensure the production of innovative automobile products.

For instance, the research reveals that the Toyota Motors Corp. is establishing a new learning facility and course content organisations to foster the development of teams.

This situation will bring about a confident and constant flow of successful employees to sustain the competition gap in the global business environment (Monden 2011; Cheng & Huang 2007).

HR Development Programmes in the Toyota Motors Corporation

The basic concept of HRM in the company hinges on the development of the on-the-job-training (OJT) learning programme (Liker & Ballé 2013). This strategy has been deemed paramount to the development and passage of the present tech-savvy production to other generations in the near future of the business.

The OJT programmed upholds a number of activities that form the basis of the HRM concept. At the outset, the company seeks to instil confidence in its workforce by maintaining resolute employment and a favourable work environment.

The HR departments in all the branches of the company are also encouraged to prioritise the safety and health of the employees by developing and maintaining safe working conditions.

Besides, the company is also concerned with the physical and psychological needs of its workforce with a view of improving their standards of living.

This HR role extends to the provision of treatment opportunities to not only the employees but also their families. As a result, the company’s workforce remains positively engaged in work. This situation ensures efficient contribution to the automobile organisation.

The basic HRM concept also encourages the promotion of the ‘TOYOTA WAY’ leadership style that ensures conscientious production techniques.

This practice ensures the design and production of competitive automobiles and accessories that lessen the competitive gap in the market. Next, the research revealed that diversity inclusion is high regarded the Toyota Motors Corp.

The line managers strive to ensure that the employees conduct their activities in a harmonious work climate that allows for dynamism and flexibility irrespective of their race, gender, and or nationality among other aspects. Lastly, the firm respects pride and loyalty.

As a result, its employees are constantly motivated with an aim of maintaining an enthusiastic team. The analysis exposed that the OJT programme has ensured the development of professional staff who have gained skills to join technical positions in the company.

How Personal Working Practices fit in the Organisation

The management of people in any organisation is a role that requires flexibility to analyse and accommodate diverse ideas that are relevant to development. In this case, the role of the HRM extends to cover areas such as project management.

This state of events suits the dynamic business environment of the twenty-first century where technology and globalisation have taken the centre stage in the competitive automobile market (Price 2011).

Project management transforms the roles of the HR into tangible products through guided decisions that are focused on gaining a competitive edge in the industry.

However, the achievement of the desired objectives involves working with a number of factors such as time constraints, budget allocations, sound terms of reference, diverse efforts, and projection of profits and costs.

These factors have been aligned with the company’s lean production strategy that has resulted in its present achievement. Nonetheless, the company was recently criticised for its weakened design practices due to the single-minded HR practices that led to the oversight of crucial areas concerning the design of cars.

The analysis also revealed that most engineers and managers in the company are subjected to excessive work pressure (Like & Hoseus 2010). Sometimes, this state of circumstances can lead to deterioration of morale that can have adverse effects on the overall production processes.

As a result, there is a need to adopt strategies that ease the pressure on the managers and engineers with a view of increasing innovative productivity. My personal working practices that can fit in the organisation revolve around the enlistment, selection, and training of employees.

HRM Role in Staffing at the Toyota Motor Corporation

The importance of resourcing personnel is to ensure that the organisation is staffed with the right people who have desirable skills, values, experience, and attitudes towards the accomplishment of the organisational goals (Lawler & Boudreau 2015).

This objective can only be achieved in situations where organisations are involved in a greater degree of flexibility to accommodate the diverse workforce.

The research revealed that almost all the executives of the Toyota Motors Corp. come from a Japanese origin. This situation has limited the company’s diversity inclusion at the corporate level (Friedman 2007).

In a personal point of view, the company should strive to fit in the modern corporate world where factors such as flexibility, innovation, adaptability, creativity, diversity, and inclusion play a crucial role in the realisation of organisational success (Lawler & Boudreau 2015).

In addition, the executives were found to exercise autocracy whereby they formulate most of the decisions in the organisation.

Although this leadership perspective is acceptable in the Japanese corporate culture, it has been phased out by the fast globalising world where robust and diverse decisions on management are paramount to the timely realisation of production goals (Heller & Darling 2012; Jayamaha et al. 2014; Friedman 2007).

The Toyota Motor Corporation hinges on its ‘Toyota Way’ lean production strategy that is closely linked to its management principles (Jayamaha et al. 2014; Bamber et al. 2014).

While this strategy has led to the improvement of production in the last decade, the recruitment, selection, and training of employees is needs improvement.

The report reveals that the failure of the HR department to emphasise employee training, rewards, recognition, leadership growth, and turnover reduction among others has significantly affected the company’s reputation in the international arena (Bamber et al. 2014).

The role of the HR in the multinational company should be reorganised to ensure that eligible candidates are offered equal chances of selection and training. The report also exposes that employability has raised concern in the automobile company.

Bamber et al. (2014) affirms that the HRM approach to the hiring of employees follows a parochial process where only candidates with exceptional grades are considered for job placement.

In a personal viewpoint, the academic intelligence of a person does not guarantee the improvement of performance, especially in the modern corporate environment where technology, globalisation, and stiff product rivalry have taken the centre stage (Zia et al. 2014).

Consequently, there is a need to make the Toyota Motors Corp. a smart organisation that offers equal employment opportunities to eligible candidates by considering not only their intellectual capabilities but also their experience, skills, and positive attitudes towards the operations of the company (Zia et al. 2014).

Recommendations

The report led to the development of various recommendations to improve the delivery of HRM in the Toyota Motor Corp.

In the twenty-first century, where globalisation, shifting technology landscapes, and competition are dominant, the company has to redesign its HRM delivery strategies to exercise the sound handling of teamwork.

It is evident that the Japanese culture adopts a parochial form of leadership philosophies that are closely linked to autocracy. This situation creates a scenario where the employees’ efforts form the framework for development guided by stringent principles of the organisation.

The case of the Toyota Motor Corporation is not exceptional. The report reveals that such issues have led to various organisational frictions during the implementation of projects.

Therefore, it recommended that the company should take into account the reorganisation of authority to ensure the devolution of power in the organisation.

This set of circumstances will pave way for the formulation of diverse decisions resulting from the projected autonomy that can arise amongst the employee fraternity (Lawler & Boudreau 2015)

Secondly, the Toyota Motor Company conducts internal promotion of its employees rather than opening opportunities for external expertise. This strategy is deemed appropriate for the organisation’s development of its workforce besides the maintenance of its visions and values.

However, it is highly recommended that the automobile multinational should outsource workforce from outside the organisation to promote open-mindedness by obtaining diverse people who are goal-oriented.

This situation will also resolve the current issues pertaining to the company’s public relations and reputation due to its recent issues with various designs of its automobiles (Annual Report 2014).

Finally yet importantly, the Toyota Motor Corporation should not only select its executives from the Japanese community. The report reveals that a large percentage of the company’s topmost executives are Japanese men.

This set of circumstances implies that its HRM strategies alienate not only other communities but also the women. This scenario is a form of discrimination due to the bureaucratic leadership practices in Japan.

Although the company upholds diversity inclusion, the practice is inadequately implemented in its organisational culture. As a result, it should hire a diverse workforce.

Since language barrier is a major hindrance to the accomplishment of this objective, the company should aim at training its diverse workforce to understand different languages with a view of improving communication.

The report has revealed that HRM roles play a significant function in the development of the Toyota Motor Corp. However, various issues that are linked to the selection of employees have raised the concern of diverse stakeholders around the globe.

To realise full-fledged results of its goal implementation processes, the company has to focus its management on key areas such as employee training, recognition, leadership development, and retention among others factors that have significant effects on the company’s reputation and development.

Alfes, K, Truss, C, Soane, E, Rees, C & Gatenby, M 2013, ‘The Relationship Between Line Manager Behaviour, Perceived HRM Practices, and Individual Performance: Examining the Mediating Role of Engagement’, Human Resource Management , vol. 52 no. 6, pp. 839-859.

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Bamber, G, Stanton, P, Bartram, T & Ballardie, R 2014, ‘Human resource management, Lean processes and outcomes for employees: towards a research agenda’, The International Journal of Human Resource Management , vol. 25 no. 21, pp. 2881-2891.

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Price, A 2011, Human resource management , Cengage Learning, Boston, MA.

Ryu, S & Kim, S 2013, ‘First-Line Managers’ HR Involvement and HR Effectiveness: The Case of South Korea’, Human Resource Management, vol. 52 no. 6, pp. 947-966.

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IvyPanda . (2023) 'Human Resource Management Structure of Toyota'. 27 August.

IvyPanda . 2023. "Human Resource Management Structure of Toyota." August 27, 2023. https://ivypanda.com/essays/hrm-in-toyota-motor-corporation-2/.

1. IvyPanda . "Human Resource Management Structure of Toyota." August 27, 2023. https://ivypanda.com/essays/hrm-in-toyota-motor-corporation-2/.

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IvyPanda . "Human Resource Management Structure of Toyota." August 27, 2023. https://ivypanda.com/essays/hrm-in-toyota-motor-corporation-2/.

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Case Study Analysis on Toyota Corporation Tanvir Ahmed 2017-1-10- MD. Ibrahim Khalid 2017-2-10- Salma Karim 2017-3-10- Shazzad Hossain 2018-1-10- Date of Submission: 6th December, 2021 Toyota Motor Corporation could be a Japanese international automotive manufacturer headquartered in Toyota, Aichi, Japan.

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