Introduction

In this study, we talk about “Managing Change in Organizations”. Organizations

recognize change as very important for its existence and prosperity in today’s most competitive

environment and new business challenges. They make change initiatives to keep up the pace

with changing environments and new challenging competition. The success and performance

advantage of organizations is very much dependent on its ability to align its internal arrangement

with the demand of the external world. While studying the change literature, the concept of

change and its differentiation looks very vague and it was very difficult to understand the overall

picture of change from the scattered literature. So the company that we discussed the change

management in this assignment is “TOYOTA”. Toyota is the world's top automotive company

and also Japan's biggest car company. It was founded in 1933 and now has developed into the

main car production, business to large industrial groups involved in machinery, electronics,

finance, and other industries.

Discussion

Task: 1

Change factors and drives analysis:

The Toyota Motor Company has always been one of the most prevalent automobile

manufacturing companies in the world. Their success has full-sized from the application of

Japanese quality and efficiency. Toyota has always designed faster and more consistent vehicles

at a more cost-effective price with the result that now Toyota motor company is a far more

profitable automobile manufacturer than any other company in the world.

The main reason said to be a major factor in the Toyota motor company’s

accomplishment is that they are continuously bringing new product and features in the market
with speed.Corolla has one of their most basic vehicles whose whose overall product

development and production resulted in only 15 months. One of Toyota motor company’s

foremost policies has been to learn from others. The feature that sets the company apart from its

peers is the circumstance that Toyota Motor Company enjoys a cost distinction factor. They

deliver the same luxuries and benefits in their vehicle and do so at a minor cost compared to

other well-known companies.

Significant Organizational Changes:

Toyota has been known to make organizational changes every so often to give the

company a competitive edge in the market. These controls vary from organization objectives

variations to the re-evaluation of hierarchies in the company. Some of the key changes declared

in 2010 are as follows: For the purpose of increasing efficiency and utilizing company resources

prudently, the Business Development Unit and Marine Business Division shall now be retitled to

the Marine and Unit Business Division. The sales purposes shall also be looked after by this unit.

The Purchasing planning department shall now be restructured into the Purchasing

Administrative Department and the Global Purchasing Promotion Division and the Body Parts

Purchasing Division shall now be updated to the Purchasing Planning Division. The purpose is to

unite local and foreign administrative functions and work on future project management

activities and cost-efficiency policies. The Tokyo Design Division shall now be called

Advanced Design Division to focus more on future technological growths.

This separation has always been one of the main success factors for Toyota

Motor Company. Toyota has always been known for its fresh and improved

technical ingenuity at a comparatively lower cost.

Every change is driven by some factors that encourage that change. Some of the internal

and external drivers that encouraged this change are as follows:

External Change Drivers:

Increased Competition:

Technology is a arena where new innovatives are presented very frequently. For a

company to appreciate a competitive edge.that are necessary to constantly on the lookout for

ways to keep themselves updated with the latest technological trends and developments. They

need to continually make changes and keep on promoted themselves. Toyota Motor Corporation

has always been one of those companies that believe in continuous change and improved

themselves as for new technological perspectives. This gives them a competitive edge over other

companies as they are reviewing their systems, processes, strategies,testing,implementations and

actions on a very frequent basis. The reason for this major organizational change was also to

maintain that competitive edge in the market as competition keeps increasing with time.

Globalization:

Communication and integration between people across the world are getting closer and

closer day by day. As technology progresses, distances decrease. For this reason, a company

needs to keep up with the latest trends of globalization. Globalization was another main driver

for organizational change. The societies are now becoming even more integrated with each other

through business and communication.

Changes in consumer demands:

patterns. The cost has become a major factor in consumer buying decisions. Fortunately, Toyota

has also elected for cost differentiation and enjoyed a central position in that aspect. Customer

satisfaction is also become a major concern nowadays and was the main driver for the change in

the organizational structure. In the new strategy, Toyota Motor Company has focused more on

providing quality services for customer satisfaction. This is another major factor is creating

brand loyalty and goodwill amongst the customer.

Resource shortage:

Due to the decline, there has been a significant shortage in the resources available. The

wisest move for any company is to effectively and efficiently utilize the existing resources

instead of bearing the expense and risk of going after new ones. That has also been a major

driver in this change. Many companies have also had to let go of a few of their employees to

compensate for the lack of production and sales. Toyota Motor Company made the decision to

keep a tight leash on its resources instead and utilize them prudently so that the production and

sales side do not have to suffer.

Internal change drivers:

Along with the external, there are also many internal drivers that motivate change in the

organization. Toyota Motor Company has been a company that has always believed in the

Kaizen principle that is the continuous change principle. That has resulted in a change in its

organizational structure and goals frequently. Toyota Motor Company is always looking for

ways through which they can improve themselves. Their inspirations have also come from other

successful manufacturing companies like Ford and the aggression to be the best in the world.

Company Growth:
 Growth is the desired outcome for all companies. Strategies’ are developed, goals are set

and action plans are created for this reason only. For any company to grow, change is important.

It has been the usual practice of Toyota Motor Company to change their strategies and

development plans every so often to keep the executives, employees and even the customers on

their toes. Positive change brings growth for a company.

Technology:

Technology has always been a competition between different organization.It has always

been a competition-driven field. Every day there are major innovations that change the world of

technology and those affected by it forever. For every business den pendent on technology, it is

extremely important to keep the process of innovation and progression continuous. For any

automobile company as well, to enjoy a competitive edge in technology is very important, but it

is also a difficult task. Toyota Motors Company has surrounded itself with innovative engineers

and designers to keep that competitive edge alive. The main internal driver for this change has

been to reinforce that aggression towards technological knowledge and aptitude.

Task: 2

Being an international firm in the automotive industry, Toyota’s corporate social

responsibility activity deals with various stakeholders with different interests and demands.

However, the following are the most significant groups of Toyota’s stakeholders, arranged

according to significance in affecting the company: Employees, Customers, Investors,

Environment, and Communities.

Employees. Toyota considers employees as its most substantial stakeholders. This stakeholder

group aims for job security, career development, and fair employment practices. Toyota’s

corporate social responsibility tactics address the interests of these stakeholders through
reasonable salaries and wages and a career development program for progressing employees. For

example, Toyota has an On-the-Job Development (OJD) program, as well as training courses

explicit to career paths in the firm. These training courses include Toyota Way Development,

Technical Development, and Management Development. In addition, the company offers

financial assistance for employees’ continuing formal education. Thus, Toyota’s corporate social

responsibility programs gratify the interests of employees as stakeholders.

Customers. Customers are the second-priority stakeholders in Toyota’s corporate social

responsibility strategies. The interests of this stakeholder group are first-rate automobiles and

service, along with sensible pricing. Toyota discourses these interests through rapid innovation

based on The Toyota Way and the Toyota Production System (TPS), which aim to exploit

efficiency, quality, and innovation. Thus, the firm’s corporate social responsibility programs

accurately cover the interests of customers as stakeholders.

Investors. Toyota considers investors as another major stakeholder group. These

stakeholders are concerned in business cost-effectiveness. Toyota addresses these interests

through an prominence on global business strength. The company experienced a deterioration

because of the recession in the late 2000s and massive product recalls that started in 2009 due to

safety issues like the sticking pedal problem. However, following its reorganization in 2013,

Toyota now highpoints improved business flexibility as a priority over rapid expansion. Thus,

Toyota’s corporate social responsibility tactics address the interests of investors as stakeholders.

Environment. Toyota has corporate social responsibility strategies targeting

environmental objectives. The main interests concerning the environment as a stakeholder

comprise business sustainability and environmental preservation. The company reports these

interests through the Toyota Environmental Activities Grant Program. Through this corporate
social responsibility program, the firm contributes automobiles and funds for environmental

conservation. For example, in 2008, Toyota donated five hybrid cars and more than $1 million to

support Everglades National Park. In addition, the Toyota TogetherGreen program cares a

network of environmental advocates and initiatives throughout the United States. Thus, Toyota’s

trade social responsibility plans successfully accomplish interests concerning the natural

environment as a stakeholder.

Communities. As stakeholders, communities are attentive in their socio-economic

development. Toyota’s corporate social responsibility policies address this stakeholder group

through numerous community development and funding programs. For example, the company

has education outreach programs to promote literacy. Also, Toyota’s Go Safely initiative delivers

safe driving education and utensils for families. In addition, the firm’s Meal Per Hour program

contributes meals to Food Bank. Moreover, Toyota works with other establishments like the

American Red Cross to support community development. Thus, Toyota’s corporate social

obligation policies effectively satisfy the interests of communities as sponsors.

Toyota is a paradigm for using corporate social responsibility strategies to fulfill the

interests of stakeholders. The company has a wide-ranging CSR approach that addresses all of its

stakeholder groups. Even with major trials linked to the global decline and product recalls due to

safety fears, Toyota has taken the essential stages to ensure that the organization is on the right

way in upholding its fruitful efforts to gratify stakeholders for high corporate social

responsibility performance.

Task: 3

Managing change process:

possible product for the customer. Some of the changes to achieve that are as follows:

Keep customer satisfaction as the top priority of the company:

Additional focus was given to quality services for customer satisfaction. To achieve that

objective a separate division for customer services was developed.

Performance Dashboards were used:

Performance can only be measured if it is continuously monitored and progressed is

gauged. Performance Dashboards are management tools used to evaluate the company’s

performance and progress on a frequent level. The overall organizational strategies till the level

of quality service that is provided to the customers, this all can be gauged by performance

dashboards. The reason for its popularity is that they are easy to design and can be implemented

with efficiency. More and more companies nowadays are going for a performance dashboard

with the number increasing every day. A way to ensure the performance dashboard's success is to

develop it using three simple principles in mind, that is, simplicity, support of senior executives

and use of proper measuring metrics that should be constant throughout the whole company.

Stretch goals were set for excellence:

After the areas where improvement is required are identified, goals are set. These are not

a normal target but stretch goals. Stretch goals are practical yet highly ambitious goals that are

clear, compelling and competitive. A company needs to be highly capable and confident to be

able to fulfill their stretch goals. TOYOTA MOTOR COMPANY plans their goals on an annual

basis and monitors and evaluates them throughout the year.

Design of new interaction structure:

puts key decision-making authority in the hands of the 29 top executives at its headquarters in

Japan. The centralized structure did not work well for the company when the recall crisis started

in the US, because at the time there was nobody with authority to speak or make a decision on

behalf of the company. Toyota also has a vertically integrated structure because they own most

of their supply chain. They have a structure that screens suppliers for quality and financial

capabilities, which is why they own almost all of their supply chain. In order to facilitate the use

of highly specialized staff; Toyota is designed to operate in a matrix structure (a combination of

two or more structures). Toyota’s matrix structure as argued by Jeffery K. et al (2006) in their

book; “The Toyota product development system”, functional manager’s makes up one side of the

matrix and the Chief engineers make up the other side. For example, if a product group wants to

develop a new product or addition to their line, they obtain personnel from other functional

departments (marketing, engineering, production) to work for the duration of the project (More

on the structure needed).

Operational changing strategies:

The order winner’s factors for Toyota are of high quality and low cost. Customers choose

to purchase Toyota because of the affordable price within a short time. The order qualifying is

the cars that Toyota produced to satisfy the various needs of the customer in high quality.

Operations management is the maintenance of the production of goods or services that a

company is developing for sale. The management team is charged with the task of ensuring a

profitable and safe production system, and also ensuring that resources are allocated and used in

an efficient manner, minimizing waste in labor and material resources. In order to meet these

goals, the management team thus has to attempt to find the best operations strategy available for
their particular situation and product. The biggest challenge for any organization and its

operations is to try to maximize production by cutting down on waste, Finding the right balance

between getting the production up to the required standard by using the resources available to the

optimal level.

There are many strategies that can be used by an operations manager depending on the

needs of production, and in the first section we will examine some existing operation

management strategies, and in the second section, we will examine the effectiveness of these

strategies, and how well they fit in with the goals of the target organization, Toyota.

In order to change stakeholders’ attitudes, Toyota has plan new strategies as marketing

strategies, operational strategy, communication strategy and etc. The strategies are built based on

the feedback from the consumer and the employees itself. Toyota as the practitioner of corporate

social responsibilities has the customer care center for worldwide productions. So they can

simply get opinions on how to improve the quality of productions.

Toyota is known to be consistent in its product quality and in the production department.

With its initiatives in the fast-growing hybrid market and with efforts to get its branding and

advertising acts together, Toyota could be well expected the roads on fire in the days to come.

According to the case study, Toyota was forced to recall its car from the US market due

to faulty brakes. This shows that Toyota has a great responsibility towards their consumer. They

have given their high-service and pay for reimbursement to the involve victims of the problem.

With proper actions and strategic planning, Toyota can be saved from devastating immediately

and run the business as usual.

McKinsey 7 S Model:

“McKinsey 7-S framework” or model is one of those few models that have achieved to

continue even when others came in and went out of trend. This model was developed by

consultants working for “McKinsey & Company” in the 1980s and structures seven steps or

stages for managing change. These steps or stages are as follows.

Stages:

The first step is Strategy, the strategy is the plan which is created to accomplish the past

competition and achieve the goal. The strategy is the main stage of change according to

McKinsey’s 7-S framework and this step comprises the growth and expansion of a step-by-step

process, method or future plan. The second step is Structure, the structure is the stage or aspect

of this model that relates to the division of organization or the structure it follows. The third step

is Systems. Basically, these steps relate to the day-to-day activities which are performed

according to the requirement on a daily basis. The chunks of activities are done in this step. The

fourth step is Shared values. Shared values refer to the fundamental or main values of an

organization according to which it runs or works. The fifth step is Style. In this step the changes

and leadership are adopted or implemented in a manner is known as ‘style’. The sixth step is the

Staff. This step contains the working capabilities of the employees and the workforce. Seventh

and the last step is Skills. The abilities as well as other skills possessed by the employees

working in the organization.

Benefits of this model:

The following are the benefits of this model. This model suggests the ways and methods

understand and recognize an organization and become a bottomless understanding and vision
into the technique and way it works. The other benefit of this model is, this model incorporates

both the demonstrative as well as the practical components of change which is very important to

generate and create ways to allow employees to deal with change easily. This model reflects and

considers all parts of the system to be significant and important, so because of this it equally

addressing all the parts, and does not leave out some features that may be of importance. This

model enables to follow the directional factor in the organizational change.

Disadvantages of this model:

The following are the disadvantages of this model. In this model, all the features are interrelated,

interconnected and interdependent on one another, if one part fails so it means that the whole

system fails and this is the greatest disadvantage of this model. Another disadvantage of this

model is that this model is difficult, complex, and multipart as compared to the other models and

differences are not focused upon in it. Those organizations and workforces who have used this

model have experienced more cases of failure, and this too can be considered as one negative

associated with it.

Kotter’s change management theory:

“Kotter’s change management theory” is one of the most famous and adopted ones in the

world. Kotter’s theory has been invented by “John P. Kotter”, who is a Harvard Business School

Professor and author of several books based on change management. This change management

theory is divided into eight stages where each step is focused on the main principle that is

associated with the response of people to change.

Stages:

The first stages are to Increase urgency. This step includes making a sense of

determination among the people so as to inspire and motivate them to move forward towards the
goals and objectives. The second stage is to Build the team. This step is connected and associated

with receiving the right people on the squad and workforce by choosing a mix of skills,

knowledge, and commitment. The third step is to Get the vision correct. This stage is associated

with producing the correct vision and idea by taking into account, not the just approach but also

objectives, creativity, and emotional connection. Forth one is Communicate. The communication

with the workforce and peoples about change and its necessity is also a significant part of the

change management theory by Kotter. The fifth is “Get things moving”. In order to get things

moving or empower action, one needs to get support, remove the roadblocks and implement

feedback in a constructive way? Sixth is Focus on short term goals. In this step focusing on short

term objectives, goals and dividing the final goal into small and achievable chunks or parts is a

good way to accomplish success without too much pressure and burden. The seventh step is

“Don’t give up”. Perseverance is the key to success, and it is important not to give up while the

process of change management is going on, no matter how tough things may seem. The last and

eight-step are “Incorporate change”. It is also important to reinforce it and make it a part of the

workplace culture

Benefits of this model:

The following are the benefits of this model: This is a step-by-step model that is easy to

follow and incorporate. The main idea behind it is to accept the change and prepare for it rather

than changing itself.

Disadvantages of this model:

The following are the benefits of this model: Since it is a step-by-step model, no step can

be skipped to reach the one after that. The entire process given in this model can be very time-

consuming. The “Toyota Company” is in dare need to implement a change process that will
assist it to restructure and reorganized its processes and ensure that it shifts its production and

products to being environmentally friendly. The Toyota Corporation Company can effectively

achieve this goal with the help of John Kotter’s 8-Step Change Model.

The top management of the company will first require informing all the relevant

stakeholders the need for the change. The management should communicate with the other

workforce the importance of the company adopting alternative sources of energy in its

production. It should also inform them about the importance of the company to enhance the

production of devices and automobiles that use alternative sources of energy. The management

should emphasize the urgency for the need for this change to the employees. They should do so

by informing them that for the company to retain its excellent performance and being able to

survive the stiff current competition that it does not have any other alternative but to comply and

make its productions and operations environmentally friendly.

The management in Toyota Corporation Company will then require forming a change

management team that will help the company to implement the change process. The change

process of restructuring the productions of the company to become environmentally friendly is

an expensive venture for Toyota Corporation Company. The management should identify

appropriate leaders in the key departments of the company. These leaders should be the ones to

form the change management team. The formation of the team with members across the

department will be a strategic move in the change process. The management will then require

coming up with a learning program that will help to equip the change management team for the

task ahead of them.

After the formation of the team, the team will be responsible for emphasizing the urgency

for the change. The next step after the formation of the change management team is to ensure the
team assumes its duty of oversees the change process. The vision should be crafted in a manner

to address the company’s values of sustaining a conducive environment for everyone to live in.

The team should educate the management about the vision statements such that everyone is

conversant in describing and fully understanding it. The top management should ensure that they

live their talk so that they become a good role model for the employees. They should always

direct the other workforce towards the realization of the set objective and occasionally remind

them about their vision in a powerful way. One thing that they can achieve this is by encouraging

the other employees to adapt those devices that they are designed to be environmentally friendly.

This will entail the use of automobiles that consume biogas or solar energy. The top management

team should first adopt this lifestyle so that the other workforce can be motivated to take suit.

The change like any other change is likely to experience various obstacles. The management

should try to identify the main fences and barriers being expressed in the change process and

assist the employees accordingly. Among one of them likely challenge the employees are likely

to experience is insufficient technology on alternative sources of energy. Japan is not well

advanced in the technology of alternative sources of energy such as solar energy and biogas.

The management instead of the management empowering relevant employees with

appropriate skills and also higher more employees that are more experienced on these new skills

to boost the performance appropriately. The Toyota Corporation Company is supposed to take its

employees for further training maybe in Germany where the technology on alternative sources of

energy is more advanced.

Since the task of the change process is a very difficult task and many employees often

become discouraged, the change management team in Toyota Corporation Company need to

split the change process into factions with definite goals and process. For instance, the team can
take employees' acquisition of the new skills of alternative sources of energy as their initial

objective. Those employees that will successfully pass through this process should be rewarded

accordingly and those that will face challenges being supported adequately. The change

management should ensure that the employees remain focused on their main objective of

transforming their production and products to being environmentally friendly.

The management should also ensure that after the company is successful in implementing

its change process, it should come with a replacement plan to sustain the change that has been

realized. Failure for that can result in the company going back to its former performance that can

greatly affect the change process. He used the concept of creating a need for urgency to influence

the employees to see the call for the change. Therefore by the Toyota corporation company

adopting a similar strategy, it will succeed with its change implementation.