Evaluating Toyota Australias Corporate Social Responsibility Efforts - Case Study Example

Evaluating Toyota Australia’s Corporate Social Responsibility Efforts Introduction The world has seen the Toyota emerging as one of the main and successful automotive industries in the world. Toyota Australia is a leading automotive industry in the Australian automotive industry. Toyota very successfully adds up to the Australian economy through direct and indirect service, as by purchasing, capital investment and exporting revenue. Toyota Australia is a manufacturing center on an international level for Toyota Motor Corporation (TMC), of which it is a wholly owned subsidiary. The vision of Toyota Australia is to be the most respected and admired company in the whole world and which we can see is quiet well known. The mission of Toyota Australia has always been to deliver good quality and high achieving automotive products and services to customers, and augment the community, partners and environment (Harvard Business School Press, Harvard Business School, Society for Human Resource Management 2006). Toyota Australia’s 2008 sustainability report describes the incorporation of principles and policies of the company to bring about environmental and social changes. It addresses the issues of atmosphere quality, recycling, global warming, and substances of concern. It describes yet another action plan of the Toyota Company regarding the environmental management. Interrelationships of the stakeholders is described and discussed. The report generally covers the issues of social development, the handling of gaseous emissions at the production level, creating vacancies for the disabled, social responsibilities. The framework below will be used as a model to evaluate Toyota Australia’s 2008 Sustainability Report. Corporate Social Responsibility (CSR) Social responsibility refers to the obligation of a firm, beyond that required by law or economics, to pursue long-term goals that are good for society. Objective The objective of Toyota is the theory of sustainable development. They believe to achieve their objectives while causing minimal effect on the environment. One of the objectives that Toyota follows successfully is the changes in the current climate situation causing many environmental problems in the present and it may hold many problems in the future. Toyota is working on this objective by believing that increasing greenhouse gas emissions can result in global warming, leading to climate change that can have adverse affects on ecosystems and society. Toyota is trying got make changes is by reducing CO2 emissions, which is an important issue for the automotive industry. Toyota Australia recognizes that it can make significant efforts to reduce global warming (Liker 2006). Steps taken by Toyota Toyota is implementing measures to reduce CO2 emissions by restricting energy consumption and making efficiency improvements in three major areas as CO2 Vehicle Emissions; Energy Usage and CO2 Emissions and emissions from Logistics and Business Travel. The global warming scenario globally: how does Toyota deal with it There are two major issues associated with car exhaust emissions; emissions of greenhouse gases and emissions such as hydrocarbons, carbon monoxide and oxides of nitrogen that contribute to air pollution. There is a target that has been set by the Australian automotive industry that is 222g CO2/km by 2010 for all new light vehicles. Toyota Australia’s sales weighted average CO2 emissions of all Toyota and Lexus light vehicles in the year ending 31 December 2007 was 224.5g CO2/km, representing decrease from 2006 (228.5g CO2/km) (Carysforth 2004). Developments made by Toyota The advanced technology that has been put forward by Toyota includes the hybrid technology. This will have a dominant involvement to reducing vehicle CO2 emissions. In addition, Toyota has invested in new fabrication materials, computer technologies and alternative fuelled vehicles, all of which help reduce emission levels. Production In the years of 2007 and 2008, the manufacturing plant achieved a 31 % reduction in gas use and a 25 % reduction in electricity used on one vehicle. The manufacturing plant used 4.71 GJ of gas per vehicle, down from 6.87 GJ of gas per vehicle in 2006/07, and 708 KWh of electricity per vehicle in 2007/08 down from 941 KWh/Vehicle in 2006/07. This improvement was due to lower units volume in 2006/07 as a result of new model Camry and Aurion launch production ramp up (Morgan 2006). In 2007/08, Toyota Australia’s energy usage at its manufacturing site corresponded to 1.18 tones CO2/Vehicle. This is a decrease from 2006/07, where CO2 emissions totaled 1.74 tones CO2/Vehicle. Toyota SWOT analysis Strengths There were some new investments made by Toyota in factories in the US and China. This made a lot of profits in the year of 2005. Net profits rising was recorded as 0.8% to 1.17 trillion yen ($11bn; £5.85bn), while the Toyota sales were 7.3% higher at 18.55 trillion yen. In the year of 2003 Toyota had had its rivals and the competitors as Ford reach lower than the into third spot. The Toyota became the World's second largest automobile manufacturers with 6.78 million units (Liker 2004). Toyota is still behind competitors as General Motors with 8.59 million units in the same period. Weaknesses The markets of Toyota in US and Japan with changeable economic and political conditions affect the market in these countries. The company is therefore beginning to shift its attentions to the emerging Chinese market. Changes and the fluctuations in exchange rates could see the already narrow margins in the car market being reduced. Opportunities The markets have seen the increase in the oil prices which made the Toyota to design new hybrid cars which will make the customers buy them the most. Threats In the year of 2005 toyota had to bring back 880,00 sports cars and bring some trucks back to the manufacturing plants due to faulty front suspension systems. Many of these cars vehicles were sold in the US, while the rest were sold in Japan, Europe and Australia. Toyota in these days has to face some growing competitive rivalry in the car market. Competition is increasing almost daily, with new entrants from China, South Korea and new plants in Eastern Europe. The company is also exposed to any pressure group in the price of raw materials such as rubber, steel and fuel (Hino 2006). PEST Analysis Political Toyota since many years had a lot of help from the local government, including tax breaks. Toyota is expected to 'sell' Indiana and its assets to the world. Economic If Toyota Australia makes a strategic decision of building up 100,000 Camrys or Highlanders each year at the plant, it will mean 1,000 jobs, according to Gary Henriott, chairman of the Lafayette-West Lafayette Economic Development Corporation. By adding and opening a new manufacturing unit in Indiana will open new opportunities for Toyota. As many as 200 Japanese companies are in Indiana, many of them are suppliers to Subaru and Toyota, so the positive economic impact of foreign investment all across Indiana is easy to document. A report compiled by the Northwest-Midwest Institute, a Washington, D.C.-based research organization, shows manufacturing represented 27.9 % of Indiana's gross state product, which totaled $227.5 billion in 2004. Social and Cultural In the year of 1999, the company established the Community Connection Program as a way to thank the suppliers for their hard work, dedication and support. In this way Toyota has its links increased with suppliers to benefit a local community organization. By using the Community Connection, Toyota and its suppliers have donated over $1,000,000 to 63 nonprofit organizations in supplier cities across the United States. Technology At Toyota, Australia the commitment to the environment extends even beyond their automobiles. In different ways whether it includes planting trees or helping to renew the public parks, Toyota is working to make the surrounding communities cleaner (Kotler 2005). Environmental management The Toyota’s policies and procedures are always in place to continuously monitor observance with these licensing requirements. Community Liaison Committee Toyota Australia brings together members of the local community to discuss issues of concern arising from its manufacturing plant in Altona. The committee, which meets quarterly, includes the Victorian Environmental Protection Authority, City West Water, Hobsons Bay City Council, local community residents, industry neighbors and the Corporate and Production Engineering Environment Group from Toyota Australia (European Commission Directorate-General for Employment and Social Affairs 2001). Key Figures Toyota Australia has 4,676 employees, with the majority based at the manufacturing plant in Altona and at the Toyota corporate headquarters in Port Melbourne. Other employees work from the sales and marketing operations in Sydney including the regional operations in Brisbane, Townsville, Darwin and Adelaide (Crowther 2004). Employees by type There are some Award employees, which are covered by the Toyota Australia 2005 Workplace Agreement whose number equals to 3,802. The Non-Award employees equal around 874 (European Commission Directorate-General for Employment and Social Affairs 2002). Workforce Profile of Toyota Australia The Average Age of the employees is 42 years old. The Female Workforce, which is employed in Toyota, is around 13% whereas the Average Length of Service given by the employees is 11 years. Customers of Toyota Toyota is constantly evaluating the capabilities to deliver first-class customer service and working with our business partners to embed the Toyota way across dealerships. Providing fuel-efficient, safe and innovative vehicles and Delivering socially responsible advertising. The Toyota Suppliers Toyota Australia has approximately 2,000 suppliers. The value of buy for 2007/08 was $3.3 billion. Toyota has been focusing on closing the gap between local and global best practice in terms of management, process, and technical and human resource development. There is a company’s targeted supplier development program, which is being followed very efficiently. During the year, 30 suppliers were involved in the program, which helps suppliers to develop and implement continuous improvement strategies (Frederick 2006). References Carysforth, C. & Neild, M. (2004). BTEC First Business. Heinemann. Crowther, D., & Bacchus, L. R. (2004). Perspectives on Corporate Social Responsibility. Ashgate Publishing, Ltd. European Commission Directorate-General for Employment and Social Affairs. (2001). Promoting a European Framework for Corporate Social Responsibility. Office for Official Publications of the European Communities. European Commission Directorate-General for Employment and Social Affairs. (2002). Corporate Social Responsibility: A Business Contribution to Sustainable Development. Office for Official Publications of the European Communities. Frederick, C. W. (2006). Corporation, be Good!: The Story of Corporate Social Responsibility. Dog Ear Publishing. Harvard Business School Press, Harvard Business School, Society for Human Resource Management (U.S.), Society for Human Resource Management. (2006). The Essentials of Strategy. Harvard Business Press. Hino, S., & Dillon, A. (2006). Inside the Mind of Toyota: Management Principles for Enduring Growth. Productivity Press. Kotler, P., & Lee, N. (2005). Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause.John Wiley and Sons. Liker J. K. (2004). The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. McGraw-Hill Professional. Liker, J. K. & Hoseus, M. (2007). Toyota Culture: The Heart and Soul of the Toyota Way. McGraw Hill Professional. Morgan, M. J. & Liker, J. K. (2006). The Toyota Product Development System: Integrating People, Process, and Technology. Productivity Press. Read More