Toyota Motor Company International Business - Research Proposal Example

TITLE by Name of author Name of class Name of Professor Name of school Location of school Date Toyota Motor Company The company of choice for this project is Toyota Motor Company. Firstly, being the second largest automobile manufacturer in the world, Toyota Motor Company plays a major role in the automobile business worldwide. Secondly, this position has enabled Toyota boast a consumer power over its competitors. The company is able to dictate the price of raw materials giving it competitive advantage over competitors. Thirdly, the ability of the company to manufacture large volumes of automobiles at minimal costs ensures its economies of scale are better than competitors meaning that its activities are under the New Trade Theory. Market research for expansion is thus made easy ensuring globalization is strategic and limited to economies that the company’s plants can thrive. Fourthly, given Toyota’s operations in 27 countries and sales in more than 170 countries, the company has to strategically deal with different legal structures, economic systems and cultural backgrounds in order to succeed. This makes it an interesting company to study. Library Catalogues 1. Zhang, W. B 2008, International trade theory capital, knowledge, economic structure, money, and prices over time, Berlin, Springer. This text offers students a chance to make sense of incoherent multiple theories by providing a more general theoretical framework that enables students to make sense of current theories. One strength of this text is that it sheds light on trade theory and other facets of trade including inequality, education, research strategies and policies and knowledge. 2. Aswathappa, K 2010, International business, New Delhi, Tata McGraw Hill Education. International Trade text book goes into detail explaining the different concepts of international trade. It also gives a detailed account of global business practice and theory. What makes this text important to users is the use of case-lets taken from contemporary businesses which helps one acquaint him/herself with the basics of global business. 3. Beugelsdijk, S 2013, Firms in the international economy: firm heterogeneity meets international business, Cambridge, Massachusetts, The MIT Press The fundamental point drawn from this comparison is that firm heterogeneity is derived from international economics benefiting from the analyses of international business in terms of behaviour and organization of the firm in question that is internationalizing. Most importantly, this text looks at the firm as a unit of analysis and considers inputs relating to entry decisions, interactions with external environment, innovation and firm boundaries. Fundamentally, the text tries to marry international economics and international business. 4. Shenkar, O, Luo, Y, Chi, T 2014, International Business, New York, NY, Routledge. International Business by Shenkar, Luo and Chi boasts a practical approach that is action focused. This makes it an ideal text for those who want to understand how the global business environment behaves. Its main strength is that it has mini-cases that are industry and country specific to offer students a practical insight on how to succeed in today’s global business environment. It also covers important trends that affect the way international business operates such as globalization drivers, e-commerce and international entrepreneurship. Electronic Databases 1. Markusen, R. J, Venables J. A 1998, ‘Multinational firms and the new trade theory’, Journal of International Economics, vol. 46, pp. 183–203. This paper by Markusen and Venables tackles the relationship that exists between multinational firms and the New Trade Theory. They bring forth the concept that the theory adds a few elements to the more traditional theory of international trade such as ‘increasing returns to scale, imperfect competition and product differentiation’ (Markusen and Venables 1998, p. 183). 2. Bernard, B. A., Jensen, B, Redding J. S, Schott, K. P 2007, ‘Firms in International Trade’, The Journal of Economic Perspectives, vol. 21, no. 3, pp. 105-130. Most researches concentrate more on the ‘comparative advantage, increasing return to scale and consumer love for variety but fail to give much attention to the multinational firms that drive the trade flow’ (Bernard, Jensen, Redding and Schott 2007, p. 105). This paper analyses and demonstrates that multinational firms play a significantly important role in international trade patterns. Across a wide array of countries, research shows that multinational firms are more productive and larger than national firms (Bernard et.al. 2007). 3. Gustafsson, P and Segerstrom, P 2011, ‘North-South Trade with Multinational Firms and Increasing Product Variety’, International Economic Review, vol. 52, no. 4, pp. 1123-1155. This paper discusses the importance that that international trade patterns has on product variety. ‘Consumers of products are always on the lookout for new products that meet their demands’ (Gustafsson and Segerstrom 2011, p. 1132). This paper therefore demonstrates how international trade enables a multinational firm ‘to engage in adaptive R&D so as to learn how to produce products of different varieties’ (Gustafsson and Segerstrom 2011, p. 1123). This also increases consumers welfare in the different regions within which the multinational firm operates. 4. Antras, P and Yeaple, S 2013, ‘Multinational Firms and the Structure of International Trade’, Journal of International Economics, vol. 65, pp. 1-67. This paper tries to answer questions as why ‘firms make strategic decision to operate in more than one country and if New Trade Theory has anything to do with these decisions’ (Antras and Yeaple 2013, p. 2). The most important part of this paper is that it recognizes the fact that international trade theory has evolved over the years and practitioners are today leveling down to firms rather than concentrating on just countries and industries in general (Antras and Yeaple 2013). Items Published on the Internet 1. http://www.ibtimes.com/ International Business Times This website boasts up-to-date information on everything regarding international business from countries, industries and markets to technology, media and culture. Contributors to the content on this website represent respectable institutions such as Microsoft Corporation, MIT and government institutions. This makes the website a credible and reliable go-to source for any form of information relating to international business. 2. http://www.jstor.org/ This is website shared library where educational institutions and academic publisher store their academic journals. What makes this source reliable is the fact that it makes it easy for individuals to search any relevant journals touching on any area of study. The papers stored in the site are also refereed thereby making them credible. 3. http://globaledge.msu.edu/ibrd/ibrd.asp This is a very comprehensive website that habours international business portals. These portals are from the Centre for International Business Education and Research (CIBER). Its major strength is that it is hosted at the Michigan State University which makes it a reliable source. It has links with to individual countries as well as international business topics (market trends and trade information), economic tables for individual country comparisons as well as original articles. Research Plan Research Background Currently there is a plethora of firms expanding business across borders into foreign economies. The main reason for this trend can be said to be the appeal created by the competitive advantage to be gained by exploiting foreign resources. As a multinational company enters a new market/region, its organisational structure becomes extremely complex. When a company expands business to another country, its control mechanism becomes a major area of concern as managing subsidiaries’ operations to conform to the parent company strategies takes centre stage. Several relevant international business theories have been proposed that multinational companies can use to help them transition smoothly as and when they enter foreign markets. In order to manage their operations, MNC’s employ strategies such as price systems and hierarchy as a way of manipulating business activities across foreign border markets (Doz 2011). Presently, in order to effectively and efficiently respond to the business pressure of the fast changing global business environment and still maintain the MNC’s localness, scholars propose that MNC’s do their best to structure the firm in a way that is distinctive from the home country. To maintain a competitive advantage in foreign markets environments, MNC’s must be structured in a way that allows them to respond to different legal requirements, political environments as well as cultural differences (Navarro, Acedo, Losada and Ruzo 2011). Research Problem The problem facing multinational companies when it comes to managing operations of their international business subsidiaries is organizing many different foreign markets at the same time and in different business environments. Building the best possible firm structure and a control mechanism for subsidiaries becomes the main objective for any multinational company. To explore how multinational companies cope with expansion as they enter into foreign markets, Toyota Motor Company has been taken as the multinational of choice because not only is the company currently displacing Australian made cars and fast gaining market share but also that it is the second largest automobile manufacturer in the world (DeGasperi and Beissmann 2014). For instance, in 2013 Toyota Corolla was the top selling car in Australia with a record sale of 1,136,227 cars (DeGasperi and Beissmann 2014). The success of Toyota in foreign markets and international business makes the organisation the perfect example for this study. The considerable global growth of Toyota represents a notable point of interest to study how the company effectively and efficiently manages its operations of international business units and how it has managed to becomes one of the world’s leading automobile manufacturers. From the company’s subsidiaries, this study will focus on Toyota Australia because it is one of the company’s Regional Technical Centre headquarters as well as containing core operations of Design, R & Development and manufacturing. It is important to note that Toyota has a total of four regional headquarters and Australia is one (Pais 2011). To conduct this research, the researcher has developed a research question: ‘How does Toyota coordinate its international business across foreign markets? A focus on relationship between Australia and Japan.’ Research purpose The aim of this paper is to investigate how Toyota Moto Company manages its many subsidiaries in foreign markets with specific focus on the coordination between Toyota Motor Corporation in Japan, the company’s headquarters and its subsidiaries Australia. This will provide an invaluable amount of information on the strategies and theories that Toyota uses before and after entering foreign markets. It will also provide an understanding on how MNC’s coordinate their international business activities. Research Target This research will provide the much needed knowledge to business owners, company managers, international business students as well as entrepreneurs as to how Toyota Motor Company has been able to succeed in foreign markets. Moreover, this paper will equip the above mentioned target group with guidelines which would enable them make use of the knowledge retrieved from it to make both career and business decisions. To the scholar who wants to understand how the theories of international business influence the operations of a multinational company across borders, this project will provide such information. Research Methodology According to Yin (1994, p. 19) a research design represents a guideline for a research investigator to execute a study from the moment the research question is formed to the conclusion of the whole study. This study will put forward international business theories as used by multinational companies in coordinating their international businesses and Toyota Australia has been chosen as the primary focus for this research. Yin (1994, p. 20-25) reiterates that for a research design to be of high quality then it must have five elements; it should begin with specifying the problem that will be the focus of the research project. It will then establish a research question to be scoped down by relevant theories through thorough review of various reliable literatures in the field of study. This will be followed by the research’s ability to specify the unit to be analysed and what research approach will be used in the analysis. Subsequent to doing this, the data collected has to be connected to the theories that have been developed as well as linking them to the criterion to be used in the interpretation process of the analysis. Overview of Literature and Conceptual Framework While it is true that multinational manufacturing companies are able to reduce the risks related to entering into foreign markets by just exporting and intensifying their involvement in only those markets that they find to be successful regions, companies such as Toyota must do all they can to enter foreign markets to sell their products to an ever growing differentiated customer base. The question which then must be answered is whether the firm will be able to exhaust, efficiently, all opportunities presented within one foreign market before it goes to another or whether the company will distribute it limited resources over foreign markets in order to continue to exploit the highest possible return from these foreign markets, the way a multi-market monopolistic company would do. Literatures discussing firm entry into foreign markets have focused exclusively on the importance of costs in making strategic decisions over the number of companies that can carry out operations and even compete in a foreign market and at a given point in time (Lin and Saggi 2002). These same literatures have also given much attention to the effect that company heterogeneity has on the likelihood of a firm entering a foreign market (Lin and Saggi 2002). The model presented in these literatures assumes that heterogeneous companies make simultaneous decisions to enter foreign markets with the view of reducing costs of entry. The consequent of this is that these companies will compete in one single market which will result in the higher production levels thereby assuring firms profit in the new foreign market. With operational costs being low in every foreign market that a firm goes into, then it becomes easy to manage its operations across borders as management’s attention is focused on making subsidiary coordination with the host company its sole objective. This study however will take a different approach from the previous studies carried out in the field. Rather than collectively investigating how multinational companies handle their operations when they enter into foreign markets, this research will concentrate solely on Toyota Motor Company and the strategies the company puts into place when entering new foreign markets regarding its coordination between Japan and its subsidiaries Australia. This study will however assume that Toyota faces sunken costs when entering foreign markets. These costs maybe those involved in researching the rules governing a certain foreign market and customer behaviours of the new market. Data Collection To get detailed information on how Toyota coordinates its international business in foreign new markets, this research will gather data using primary and secondary sources. Data gathered will then be linked to the theories developed after analysis. Primary data In order to cover all topics, telephone interviews will be conducted based on semi-structured model with questions having been set prior to the interview. The questions may however, need adjusting as the interview progresses in cases where the respondents do not understand the questions being asked (Fisher, 2004, p. 133). These interviews will act as supplementary information to the gathered secondary data. 10 senior Toyota Australia employees currently heading various departments will be interviewed. Secondary data Secondary data will form a bulk of the data for this study to be retrieved from documentary and archived records as well. Documents will be gathered from the Toyota’s company website, press releases by the company, company annual reports, the university database, public library databases and reliable articles from reliable search engines such as Jstor. Analysis and Conclusion At this stage of the study, both the primary and secondary data collected will be connected to the theories that the researcher will have developed for the research. Data analysis will be presented in this part of the main research by the author’s own analysis of the information taken from the secondary sources and interviews of the Toyota Australia employees. Specifically, the author will conduct a step by step analysis of how Toyota coordinates its international business activities across foreign market borders. Construct Validity The research will be conducted through a qualitative case study that will be linked to secondary data, artifacts and employee interviews. Before constructing the interview questions, the author will ensure that they peruse through the secondary data so as to have a clear understanding of the firm as well as the scope of the study. Thereafter, the secondary information from the secondary sources will be tied to the study’s theories in order to form interview questions. Finally, the author will repeat the interview answer to the interviewee at the end of each interview question (Fisher 2004, p. 143). Internal Validity Fisher (2004, p. 296) states that the data gathered and analysed must answer the research problem in question for a study to meet internal validity. In this study, the use of several sources of evidence will ensure that it achieves research internal validity threshold. In this study, the author will gather data from semi-structured interviews, secondary sources as well as artifacts presented voluntarily. Data collection via multiple methods will ensure the issue of internal validity is taken care of. External validity External validity according to Fisher (2007, p. 297) refers to the extent to which a research topic can be generalized to different populations. The author will ensure that the secondary information gathered will be representative of the global view of the Toyota Company. By doing this, the study could be used to carry out other research involving Toyota in Europe or in Asia. However, the small sample size making up the primary and a little bit of secondary data will probably make an individualized conclusion regarding transferability of the study findings. In a study, if the sample is too small then it is the responsibility of the researcher to provide the reader with detailed information so as to enable them make personal conclusions relating to external validity (Fisher, 2004, p. 298). Ethical considerations The author will ensure that the identities of the interviewees will be kept as anonymous as possible by protecting and coding such data that have their details. The author also promises to store all documents related to the study under tight security. The author also promises that any research assistants that will be used will be instructed to protect the identities of participants to the study. Finally, the author will seek permission from the relevant bodies prior to conducting this research project. References Fisher, C 2004, Researching and writing a dissertation: for business students, 1st ed, Pearson Education Limited, London. Fisher, C 2007, Researching and writing a dissertation: A guidebook for business students, 2nd ed, Pearson Education Limited, London. Yin, R.K 1994, Case study research: design and methods, 2nd ed, Sage publication, USA. Doz, Y 2011, ‘Qualitative research for international business’, Journal of International Business Studies, vol. 42, no. 5, pp. 582-590. Navarro, A, Acedo, F, Losada, F, Ruzo E 2011, ‘Integrated model of export activity: analysis of heterogeneity in managers' orientations and perceptions on strategic marketing management in foreign markets’, Journal of Marketing Theory and Practice, Vol. 19, No. 2, pp. 187-204. DeGasperi, D and Beissmann T, 2014, Car sales 2013 Toyota Corolla steals title of Australia’s most popular car, retrieved 11 September 17, 2014, from http://www.caradvice.com.au/265366/car-sales-2013-toyota-corolla-steals-title-australias-popular-car/ Pais, J 2011, Toyota- International business, retrieved 15 September 17, 2014, from http://www.slideshare.net/joelpais/toyota-international-business-mgt. Lin, P and Saggi, K 2002, ‘Timing of Entry under Externalities’ Journal of Economics, vol. 75, no. 3, pp. 211-225. Read More