Toyota’s Organization Diagnosis and Change Process

Topic: Strategic Management
Words: 1377 Pages: 5


The Toyota brand is today one of the largest car manufacturers. Toyota Motor Corporation (TMT), as the flagship automaker in the eastern region, has a long development history. Due to the efforts of its founders and leaders, the brand has gained global fame and become a recognized auto concern. However, despite the success of past years, the corporation that produces a large volume of products annually is losing its leadership position due to the lack of innovation that the target market seeks to receive. While competing with other major automakers, TMT cannot offer consumers some of the options other brands equip their vehicles with, such as high-precision and robotic navigation systems. As a result, the company has to be in the status of catching up, and high market competition slows down its development. The corporation’s HR professionals and line managers are involved stakeholders whose participation in bridging the current gaps is essential. Thus, TMT, despite its many years of success and recognition among consumers, is losing market positions to some car manufacturers.

Organization Diagnosis

One of the main issues that TMT has faced is poor innovation management caused by the lack of focus on optimizing the internal operating environment. Profiroiu et al. (2020) compare Toyota’s activities with other major brands in the eastern region and note that the auto manufacturer in question lags behind some competitors. Failure to establish a work environment in which employees freely express ideas and are encouraged to openly participate in the improvement program hampers the development of the company, which, in turn, leads to the loss of market positions. The issue assessment can be performed from organizational and group perspectives.

Levels of Diagnosis

At the organizational level, the integrated work of the corporation’s HR department should be assessed to identify specific causes and shortcomings. As Suh (2019) notes, TMT relies heavily on skilled human resources in its operational strategy. In this regard, engaging talented and professional employees is not the only area of ​​work that the company’s management should promote. From an organizational perspective, corporate principles for sustaining innovative growth are determined by the necessary funding, employee engagement incentives, and robust market intelligence to identify the current trends and consumer interests. As a result, failure to address these aspects is an organizational oversight and requires an effective change process.

At the group level, the responsibility of HR specialists and line managers is determined by the willingness of teams from different departments to participate in the development of the business’s operational aspects. Suh (2019) argues that TMT needs sustainable knowledge transfer, and the role of the HR department in managing this process is significant. According to Milagres and Burcharth (2018), who analyzed the productivity of TMT, “the longer the company exchanged knowledge in its supplier’s factory, the quicker it improved performance” (p. 42). This confirms the relevance of introducing an appropriate system of interaction among employees at the group level to increase the competitiveness of the corporation. As Toyota positions itself as a global corporation with a focus on innovation, dynamic changes must be made within its manufacturing departments. Cummings and Worley (2018) consider sustainable organizations in terms of learning ability. Therefore, at the group level, HR specialists and line managers of the corporation in question should promote appropriate ideas to increase the staff’s professionalism.

Data Processing

The information about the aforementioned gaps in TMT’s activities is taken from academic sources. The mentions of Toyota as a competing brand that cannot realize its full potential due to difficulties in optimizing the innovation base and insufficient staff training also appear in the mass media. Individual data from open sources were analyzed with a focus on specific variables, particularly knowledge transfer, the sustainability of HR policies, the level of interaction and engagement of employees, as well as the flexibility of the operational process. As a result, after processing the data, the idea is that a change process aimed at improving problematic aspects through strategic intervention is a prerequisite for strengthening the brand in the target market.

Organization Change Process

As a change process for the identified development issue, the approach based on dynamic strategy-making is an appropriate practice. The aforementioned gaps in addressing Toyota’s innovative aspects and the lack of interaction within the team can be corrected by transforming the traditional principle of straight-line performance control. Cummings and Worley (2018) highlight the value of dynamic strategy-making and describe it as a revolutionary process aimed at promoting continuous improvement in a system designed to optimize productivity and increase work efficiency. According to the authors, this algorithm includes several crucial criteria that determine the transition from outdated and weak organizational solutions to more advanced and flexible operational steps (Cummings & Worley, 2018). They include speed, breadth of intervention, flexibility, empowerment, simplicity, and unity (Cummings & Worley, 2018). Each of these aspects is designed to reorganize stagnant work patterns by utilizing available human resources and assets and changing the company’s strategic management concept.

The proposed optimization system is based on activating changes through the transformation of the internal aspects of the work process but not the entire organizational structure as a whole. The framework that Cummings and Worley (2018) propose as a background is aimed at creating a system in which available resources and capabilities, along with complex environments, provide a transition to an operating model in which the direction of strategic development is determined by setting flexible goals and simple and clear objectives. Teece (2018), in turn, argues that “the dynamic capabilities framework recognizes the importance of bottom-up innovation, either as the creation of new knowledge” (p. 362). In other words, optimization comes upwards, and employees, who are monitored by HR specialists and line managers, are the key driving force of change. In such a working environment, new ideas are generated more effectively, and the course for continuous improvement is more sustainable.

The primary justification for the relevance of this framework is due to the high dynamics of TMT’s work. According to Cummings and Worley (2018), any organization and environment in which a business develops cannot be considered static due to constant changes both within and outside the enterprise. Therefore, a strategic framework based on dynamic changes and incentivizing a faster and more open operating mode with an emphasis on employee engagement and management flexibility is appropriate to address the considered Toyota’s issues. As a result, the auto manufacturer needs to ensure a smooth transition to such an operating model.

Managing Change

Stakeholder Engagement

The company’s HR specialists and line managers will be involved as the main facilitators of changes initiated at the organizational level. All employees should receive instructions on what changes are planned to be implemented in the workflow. Responsible supervisors should promote the concepts of open communication, knowledge sharing, and free expression of suggestions aimed at optimizing individual operational aspects and improving specific production outcomes.

Control over the Transition Phases

Identifying difficulties in working under the new regime is a mandatory and responsible task for the supervisors. Specific indicators marked as the key areas for improvement need to be reviewed with a focus on the criteria from the strategic framework. This is essential to evaluate operational procedures from the perspectives of the flexibility of decision-making, the quality of teamwork, and some other characteristics that together allow for the implementation of dynamic changes.

Reporting System

A well-established reporting system is a crucial component of any change strategy. Responsible employees should provide HR specialists and line managers with reports on the success or problems of working in the new mode. These reports, processed in accordance with general feedback, are sent to senior managers. The minimum number of complaints and real positive developments in the operating environment are objective justifications in favor of the sustainability and value of the new strategy.


The proposed dynamic strategy making is a suitable framework for optimizing Toyota’s internal operations, which can help increase the auto manufacturer’s competitiveness due to more flexible and open interaction modes among employees. This model’s corresponding criteria should be considered as meaningful indicators designed to create a productive working environment. The intervention process needs to be monitored through the involvement of responsible managers, intermediate control, and the establishment of a sustainable reporting system to determine the success of the implementation of the proposed change strategy.


Cummings, T. G., & Worley, C. G. (2018). Organization development and change (11th ed.). Cengage Learning.

Milagres, R., & Burcharth, A. (2018). Knowledge transfer in inter-organizational partnerships: What do we know? Business Process Management Journal, 25(1), 27-68. Web.

Profiroiu, M., Kaneko, H., Vlad, C., Dutescu, A., & Ishida, H. (2020). Toyota Motor Corporation’s culture strategy. Review of International Comparative Management, 21(4), 458-489. Web.

Suh, Y. (2019). Centralization and decentralization of global knowledge transfer structure a comparative study on Toyota and Hyundai’s production system transfer. The Journal of Japanese Operations Management and Strategy, 9(1), 34-47. Web.

Teece, D. J. (2018). Dynamic capabilities as (workable) management systems theory. Journal of Management & Organization, 24(3), 359-368. Web.

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