Stakeholder

Toyota’s Stakeholder Groups & CSR Initiatives

As a global firm in the automotive industry, Toyota’s corporate social responsibility activity deals with
various stakeholders with disparate 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

Communities

Employees. Toyota considers employees as its most significant stakeholders. This stakeholder group
aims for job security, career development and fair employment practices. Toyota’s corporate social
responsibility strategies address the interests of these stakeholders through satisfactory salaries and
wages and a career development program for advancing employees. For example, Toyota has an On-
the-Job Development (OJD) program, as well as training courses specific 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 satisfy 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 high quality automobiles and service, along with
reasonable pricing. Toyota addresses these interests through rapid innovation based on The Toyota Way
and the Toyota Production System (TPS), which aim to maximize efficiency, quality and innovation. Thus,
the firm’s corporate social responsibility programs properly cover the interests of customers as
stakeholders.
Investors. Toyota considers investors as another major stakeholder group. These stakeholders are
interested in business profitability. Toyota addresses these interests through emphasis on global
business strength. The company experienced a decline 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 highlights improved business resilience as a
priority over rapid expansion. Thus, Toyota’s corporate social responsibility strategies address the
interests of investors as stakeholders.

Environment. Toyota has corporate social responsibility strategies targeting environmental goals. The
main interests regarding the environment as a stakeholder include business sustainability and
environmental conservation. The company addresses these interests through the Toyota Environmental
Activities Grant Program. Through this corporate social responsibility program, the firm donates
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 supports a network of environmental advocates and initiatives throughout the
United States. Thus, Toyota’s corporate social responsibility programs effectively fulfill interests
regarding the natural environment as a stakeholder.

Communities. As stakeholders, communities are interested in their socioeconomic development.

Toyota’s corporate social responsibility strategies address this stakeholder group through various
community development and support programs. For example, the company has education outreach
programs to promote literacy. Also Toyota’s Go Safely initiative provides safe driving education and
tools for families. In addition, the firm’s Meal Per Hour program donates meals to Food Bank.
Moreover, Toyota works with other organizations like the American Red Cross to support community
development. Thus, Toyota’s corporate social responsibility strategies effectively satisfy the interests
of communities as stakeholders.

Resources

Toyota, Resources Analysis

Brief Company OverviewToyota Motor Corporation is a Japanese multinational corporation, and is

considered the world’s largest automaker of automobiles, trucks, buses, robots, and providing
financial services. The company adopts a philosophy in terms of its production system, which is named
The Toyota Way. Its philosophy in production involves a list of fourteen principles that are implemented
in the company, and serve as guides to the operation of the company Resources

Tangible resourcesFinancial ResourcesToyota is the largest and the most profitable automobile
manufacturer in the world. The company reported annual sales of $202 billion and net profit of $ 2.4
billion in 2010. The company has cash equivalents of $43.3 billion. The huge balance sheet and liquidity
allows the company to employ cash easily and also to generate funds from outside. Organizational
Resources

Toyota has developed a powerful ‘dynamic capability’ in the form of consistently practiced ‘Rules-
in-Use’ for organizational design, improvement, and adaptation. (Spear, 2011) The firm effectively
overcomes the problems of integrating functional know-how into new product development by the
creation of cross-functional product development teams for new product development. This helps to
focus on all aspects on product launch simultaneously rather than sequentially and thus shortens the
time to market. Physical Resources

The company has factory all over the world to meet the demands of the local market and exploit the low
cost manufacturing at several places. Due to its plants spread all over the world the company is able to
synergize the overall demand faced by it and the low costs. Toyota is a pioneer in flexible manufacturing
system (FMS) which enables it to produce a number of models at the same facility at a low cost. FMS
allows the firm to respond the fluctuation in the demand of its models more quickly and efficiently.
Technological Resources

Toyota has been able to manage its competitive advantage due to strong R&D in product development
and especially in plant engineering & production processes. Toyota has been able to churn out products
at rapid pace as it pioneered the use of platform system whereby multiple models can be formed on a
same platform (chassis) by slightly modifying the platforms. This has helped to cut down the R&D costs
drastically and bring the models to the market at quicker pace. The Just in time (JIT) lean manufacturing
system was first adopted by Toyota and gives it a huge competitive advantage in terms of inventory
management and production capabilities. Due to this, the company has been able to drastically reduce
cost of inventory management. Intangible resources

Human ResourcesToyota is building both tangible (a new learning facility) and intangible (course
content) structures relating to team member development that ensures a secure and steady flow of
qualified human resources to conduct Toyota’s global business in the 21st century. Innovation
Resources