Toyota Company Work Place Change Systems - Case Study Example

Industrial Relations Name Institutional Date Introduction Change is inevitable; work place change as well is very much inevitable and continuous. Organizations are constantly undergoing adjustments through restricting, franchises, amalgamations and other forms of innovations to meet their market demand. As a result work place environment constantly changes, which mostly creates frictions between the managers and their employees. At the same time external organization changes also results into pressure between organizations themselves. Industrial relations, hence has become vital in maintaining associations between these players. Industrial relations work with the key principle of creating mutual agreement between parties through win-win. Industrial relation can simply be understood as the relationship between employees and their employers in the volatile industrial environment. Work places changes is the major cause of work place frictions, consequently the need for harmonious agreement between the parties becomes necessary. Industrial relations ensure that work place disputes are avoided at all cost (Luria, Vidal, Wial, & Rogers, 2006). Researches have shown that work place disputes results into waste in resources and productivity of an organization. In some case, aggressive misunderstandings such as riots may leads to physical damage of property and deaths. In the past cases legal arbitrary system has been put in place, however, it only acted as a law enforcing machinery rather than a system creating mutual understanding and trust between industrial players (Kochan, Eaton, McKersie, & Adler 2009). Three major theatrical aspects have been put forward in explaining industrial relations framework. The most outstanding perspectives are the radical, unitarism and pluralist perspectives. Each of this perspective works uniquely in addressing workplace conflicts and the work of regulatory machineries. Conflict or radical perspective is associated with Marxist theories, the model advocates for radical system of dealing with workplace disagreements. The radical system is identified with the capitalists. It is a based on class distinctions and inequality between the workers and the capitalists. Conflicts are seen as a normal phenomenon and workers always opt for trade unions in response (Heery & Bacon 2008). Unitary perspective (unitarism) sees an organization a whole one family. Organization is one unit where everyone, both managers and workers are guided with similar principles. Organization family shares their values and interests. It demands cooperation and utmost unity among the members. Additionally, unitarism works under paternalistic approach, based on loyalty among the members. Consequently, actions of trade unions are seen as unimportant as parties’ works and mutual exclusions with no antagonistic parameters. Conflicts are unaccepted as they are perceived disruptive to the family unity. In essence, unitarism perspective works under family loyalty and unity (Heery & Bacon 2008). Pluralist perspective sees an organization as a unit combining powerful divergent mini-groups. Each of these groups is uniquely organized with their own management, principles and values. The most distinct groups in many countries are the trade unions and organization managements. Management body functions leans mostly over coordination and coordination rather than controlling and persuasion as in the radical perspective (Lasbury, & Wailes, 2010). Trade unions are identified more with the employees than the employers and form the legitimate represents. Conflict resolution involves bargaining method under win-win. Additionally, conflicts are viewed as a normal phenomenon rather than a bad activity. Pluralists believed that conflict can be channeled for productivity if both parties are settled for mutual agreement (Heery & Bacon 2008). The constant change in workplace environment has brought with it several countering measures that managers apply for organization sustainable development. Researchers have identified; piecemeal, top-down, systematic jointism, negotiations and change bargains. Piecemeal management is a collective approach mainly based on communication pillar. Employees are involved in the system i.e. as carried out by Smith and Nethew. Decision making is not entering dependent on top-down approach; however, employees are allowed to make their suggestions such as in the Tim Horton’s. The organizations as well take keen attention on employees work condition and ensure proper appraisals and promotions. Piecemeal approach allows the employees to freely have their informal groups that formally represent their grievances (Marschall, Forthcoming). As the name suggest, top-down system works under the principle of strategic management with power vested at the organization apex. Workforce is seen as implementers rather than part of strategic planning body. Top-down management approach works through systematic information flow and hierarchical system. Organization is divided into units from top managers, supervisor and finally workforce. Poor application of this system has resulted into dictatorship and misuse of workforce since their grievances are never presented. However, the system significantly result into achieving organization strategic goals as it allows no rooms for bending organizational objective. Nike Company got accused of applying this work place management system (Luria, Vidal, Wial, & Rogers, 2006). Eaton, Ford and GM Companies are known for their systematic jointism workplace management system. Jointism calls union governance between organization management body and union officials. The aim is to dissolve the adversarial view between unions and employers. Since unions also represent workers systematic jointism was seen as a way of including workers in the management system. However, this system failed in some countries since gaining mutual trust between the capitalists and the unions was not very easy. Countries where strong industrial relationship movement operated, also failed to achieve jointism due to adversarial attitude between the parties (Kochan, Eaton, McKersie, & Adler 2009). Situational or mixed change model follows no specific identified system. It identified cultural and structural change system. Due to the prevailing condition, managers can shift from long term contracts to short term systems or applying individual contracts. This change management system is based on flexibility of organization policies. Wages and promotions are given based on employees work performance rather than set requirements. Organizations can as well utilize such systems as rotational work promotion system. This system was originally applied by Japanese organizations (King 2009). Rail Royce and British Rail are organization remembered for their concession bargaining. Mid and late 1990s found when many organizations in Britain were still practicing concession bargaining. Different groups participated in concessions under compensation. The same system prior was common in the United States of America. Today, this approach is still found in some countries but mixed with other methods. However, the strength of this system has greatly diminished with the growth of industrial relations (Heery & Bacon 2008). This paper includes a case study of Toyota Company work place change systems. The case study is analysis Toyota Company under three broad workplace change i.e. feminism, Marxism and Neo-liberalism theory. This case study examines Toyota from its historical perspective and management system in different countries. The paper also analyses workplace challenges Toyota has gone through as a result of its management style. In the case study, the state and its regulatory roles have been identified in Toyota Company. Toyota Company Toyota is known for its vision of the ‘Toyota Way.’ Toyota way defines values that guide Toyota workforce globally. Before establishment of Toyota way in 2001, the company’s values and philosophies were carried over explicitly by knowledge. Toyota’s constant industrial changes in the company’s diversification, growth, and its rapid globalization, have greatly increased its marketing and manufacturing scope. As a result the company has undergone both internal and external changes to meets diverse work environment in different countries. The company has adopted global common corporate culture, managerial system, values and business methods under its Toyota Way. The following table shows Toyota employees across the world from 2002 to 2005. Fig1. Toyota Employees from 2002 to 2005 From the table it is notable that the company is constantly increasing its workforce. This majorly caused by its constant expansion across the work. It is evident that the company is constantly facing workplace change issues. Toyota way is guided by two pillars, Peoples’ respect and Continous improvement. This values governs all employees of Toyota across the world. Toyota works constantly to improve its structures, processes and workforce in all its operations. As a result, work place change and pressure is always expected. Toyota have utmost respect to its stakeholders and employees and encourage individual innovations and teamwork. Toyota Way has been adopted in the company’s accounting, marketing and human resource across the world (Toyota, 2005). Toyota Institute Toyota created an institute in 2002 January; the institute was a Toyota’s internal human resource development. It aim was integrating organic global companies under Toyota by sharing its principle ‘Toyota Way.’ About 1500 and 600 overseas employees had received training in the institute by 2004 financial year. The company also has created several institute affiliates in Africa, North America and Europe for training purposes of the ‘Toyota Way.’ The training programs as well include personal appraisals for promotion purposes. The table below highlights key areas identified in the ‘Toyota Way’ (Toyota, 2005). Fig2. Toyota Way The table above identifies the key areas identified in the Toyota Way, it can be seen that the company believes in teamwork both with the management and employees. The company as well, emphasizes on continuous improvement along its structures, processes and outcome, like wise workforce is given a lot of attention as part of continuous development. Mutual Trust in Labour Relations Management and employees in Toyota is work under mutual trust aided by two way comprehensive communication systems. Toyota adopted this principle after the 1950s labour dispute. Mutual trust became the basic unit in the 1962, Labour Management Joint Declaration. Additionally, the 21st century Labour Management Resolve signed in 1966, identified mutual trust and respect as a pillar in in any organization. The Human Resources Management and work continuity has been used by Toyota to strengthen its relations. Toyota is among the companies that prides itself of stable employment opportunities with low layoffs and terminations. This has been used as a base for enabling employees to be more innovative and ability to adjust to organization changes. More so, employees are allowed to participate fully in running organization activities through ideas contribution, creativity, skills enhancement and reasoning. The company ensures that employees are put in places where they can fully exploit their abilities. The company also ensures their employees work environment remains among their priority. Toyota considers human assets as key assets among others (Fischer 2003). The following are the basic human resources principle in Toyota. Creating a trustable workplace environment for employees through enhance communication system, stable employment, constantly maintained working environment including remunerations, consistency, and workplace fairness. Ensuring constant promotion of voluntary innovations with continuous improvement. Communication has been enhancing for sharing ideas and developing of employees in conceptualizing their organization. Employees are able to follow their work and results for mindset adjustment Committed and fully utilized human resource management team. The team ensures work force growth and promotion and open communication of Toyota Way. Team work in pursuit of individual contribution to optimize the entire team. This achieved through consensus building and single thrust achievement. Results are highly communicated as well as goals. Communication Pillar Toyota identifies communication as a solution to any problem. Apart from internal communication, Toyota engages in external communication through discussions with Joint Labour Management Round Tables Conferences, Labour Management Councils and other bodies and committees as per the country where it operates. Toyota has hotlines where employees raise issues. Issues such as gender harassment, compliance, mental health, and working environment can simply be raised through the hotlines for quick response. Significantly, Toyota conducts employees’ satisfaction and morale surveys. 2004 survey covered above 83 per cent of the total 19000 employees of the company. Most employees gave feedbacks such as ‘I am proud to be in the Toyota family,’ ‘this is beyond my satisfaction expectation,’ ‘Toyota is like working at home,’ and ‘Toyota is the best.’ The following table shows percentage of survey based on pride and satisfaction against years between 2000 and 2004 financial year (Toyota, 2005). Fig3. Employees Morale and Satisfaction from 2000 to 2004 From the table, it can be seen that the level of work satisfaction and morale are maintainted at within 80% limit. Emloyees satisfactition, however, is hihger than their morale graph. This can be attributed to several indiuvidual specific demands. Toyota does not limit its communication to lobour related bodies and employees alone, it idnetifies itsef with employees families as well. From 2002, families have beeen receiving greeting cards and christmas wishes from the company president. In 2003, the company initiated workplace visits for family members. Toyota also has a Fami-net, a website for to all the families in bid to enhance employees family relations. Toyota bridges family workplace gap as a mode of creating work place satisfactionb and boosting employees morale (Toyota 2005). Employees Development Toyota spends vast of its annual earnings in training and developing human resources. The company believes that the best approach to training is communicating its values and principles (King 2009). It has a standardized set qualification level for all employees both in the office and technical department. They have T-shape human resource structure, including members with unique skills such as foreign languages and operations acquisitions within the cross. The vertical T for high specialized individuals in a given field, and finally the T of those carrying daily operational activities and can enhanced their knowledge (Srinivas 2004). Fig4. The table below shows Toyota training structure An employee is trained for ten years before he gets a promotion in that level as a trainer. The company majorly applies on job training. Most Toyota training programs are geared towards problem solving. The table below shows Toyota training structure. Work Diversity and Unity Toyota vision is structured for diverse workforce. In the financial year 2002, Toyota hatched a plan to enable women work effectively in the company. It rolled out three major plans (Toyota, 2005). Enabling women work and raise their children. Enhance women work place development and career building Create employees awareness and affordable work environment As a result the company provides a gender free environment the graph below trends in ratio of female employees from 2000 and 2004. Fig5. Trends in Female Employees ration in Percentage From the graph it can be seen that the ratio is constantly increasing across the period. Toyota aims to create gender balance among its employees across the globe. The company has also introduced childcare services for mothers. Across the period number of employees taking care of children has increased as shown by the graph. Fig6. Number of Employees in Childcare The graph shows a constant increase in the number of childcare services. Apart from these, the company is also engaged in employment of elderly people above 60 years. The company is believed to be the highest in employment of the disable at 1500 by 2007. The company also offers long term employments to contract workers (Toyota, 2005). Conclusion Toyota Company has successfully incorporated neo-liberalism management system in all its units across the world. Toyota way does not only empower managers but also workers. The company successfully is fighting for better and satisfying work condition among its workers. Apart from these, Toyota has put several project aimed at encouraging sustainable environmental development. Toyota has been able to fit in any country due to its employment policies geared toward human resources mutual and trust principle. It has worked within the legal parameters of most countries through negotiations and round table discussions. Toyota sensitiveness toward employee’s satisfaction and better work environment has made it successfully work within most governmental bodies. References Fischer, D., 2003, Labor Gains: How union affiliated training is transforming New York's workforce landscape. Center for an Urban Future: New York City. Heery, E., & Bacon, N., 2008, The SAGE Handbook of Industrial Relations, SAGE Publication: London. King, K., (2009). Workplace Performance-PLUS: Empowerment and Voice through Professional Development and Democratic Processes in Health Care Training, Performance Improvement Quarterly, 21(4), 55-74. Kochan, T., Eaton, A., McKersie, P, & Adler, S., 2009, Healing Together: The labor-management partnership at Kaiser Permanente, Cornell University Press: Cornell, NY. Lasbury, D., & Wailes, D., 2010, International and Comparative Employment Relations, Sage: London Luria, D., Vidal, M., Wial, H., & Rogers, J., 2006, Full-utilization learning lean in Component Manufacturing: A new industrial model for mature regions, & Labor's stake in its success (Vol. WP-2006-03): Sloan Industry Studies Working Paper Marschall, D., (Forthcoming), The role of American unions in the institutionalization of workplace learning: Innovations for new work systems and labor movement renewal, In R. Cooney & M., Stuart (Eds.), Trade unions and workplace training: Issues and international perspectives, Routledge: London. Srinivas R., 2004, Human Resource Management in Practice: With 300 Models, Techniques and Tools, PHI Learning Pvt. Ltd., New York. Toyota, 2005, Relation with Employees, Retrieved on July 25, 2012, from, https://www.toyota-global.com/sustainability/report/sr/05/pdf/so_02.pdf Read More