The Need for Change at Toyota Company

There is an old cliché that says “change is the only constant in life.” Change has been defined as a paradigm shift or alteration of doing things from the present way to a new way. Numerous research studies on “the impact of organizational change” have shown that, organizations that embrace change end up thriving and flourishing, while those that resist change tend to be wiped out. This essay will explore the influence of global and internal environments on the need for change at Toyota Corporation. In this essay the stages of the change transition curve will also be discussed.

The influence of Global and Internal Environments on the Need for Change at Toyota Corporation

Toyota operates in a complex and challenging industry and the company needs to take into considerations the automotive environment before considering development and implementation of successful strategies. Since its inception, Toyota has always focused its attention on marketing its products in developed countries such as Asian and American countries. In spite of the immense profits it has generated, the company should be aware of the several opportunities available; such as, new investment opportunities in the Mediterranean, Africa and other developing countries (Farish, 2011).

For many decades, the Toyota Company has been focusing on producing cars that are more suitable for the working class people. Although, Toyota has succeeded in producing different models of cars for its consumers, the target market has always been limited to a specific segment. As a result, young people and unemployed have not been able to afford Toyota cars, which have been perceived as expensive and too costly. However, to develop a formidable marketing strategy, Liker (2003) argues that the company should start targeting the urban youth market which is a highly competitive segment of the automobile market.  This can be achieved by introducing new models aimed at attracting customers from this segment of the market. However, the company should be ready to venture into the market segment with branding difficulties.

Another significant need for change for the company is the fact that it has to correct mix of products for its clients.  There is an immense need for the company to segment its market, products and services properly. This means that the company should target the market depending on the needs and quality needed by their clients in different countries. Although the number of units made by Toyota has been on the increase making it the second company in the industry, product positioning needs to be complemented through diversification of the product range, targeted marketing and commitment to quality and lean manufacturing strategy (Liker, 2003).

Several changes that are bound to create more opportunities are anticipated to improve the company’s prosperity in the challenging automobile industry. According to Dawson (2005) there is an urgent need for Toyota to begin making better cars that meet the needs of the customer. This has been occasioned by the strong technological development and productivity witnessed by its competitors. The positive side of this change is that, the company has personnel with rich accumulated expertise who can efficiently allocate, and manage resources to enhance technological advancement and product development.

The biggest threat faced by Toyota is uncertainty; hence there is a need for an urgent change in its operations. There is uncertainty surrounding the sales because there is oversupply of cars, and Toyota has to make sure that it is their models that consumers want.  Since its leading markets are the US and Japan, it is affected by fluctuations in the financial, economic markets and political conditions. Exchange rate movements have also seen the narrow margins in the car market being reduced (Dawson, 2005). 

The Change Transition Curve at Toyota Company

The change transition curve, which is attributed to psychiatrist Elisabeth Kubler Ross, is extensively used in change management and businesses globally. Although, the change transition curve is applied in different variations and adaptations, it has been recognized as an effective change management tool. The change transition curve comprises of four main stages that explain how employees adjust to changes within the organization. 

Stage 1: Shock and Denial

In the change transition curve, the first stage is characterized by shock and denial whereby employees are afraid of change and want to maintain the “status quo.” Even in cases where change has been effectively planned, employees need time to adjust, consolidate all the relevant information and get ready for change. Burke (2010) observes that this is a vital stage for communication in the organization to help people deal with the shock, anger and denial regarding the anticipated change.  

In regards to changes in Toyota Company, shock and denial is reflected in the way employee resisted change when the company opted to venture into new environments and expand on its target market. Most of the employees felt that the company should maintain its status quo because diversification could negatively impact its specialization in production. As a result, the change was not taken positively (Liker, 2003).

Stage 2: Anger and Fear

During this stage of the change transition curve, most activities in the organization are disrupted because of the “fear of unknown” and the negative consequences that may arise out of the anticipated change (Burke, 2010). This stage is characterized as a “danger zone” for the organization that is in the process of change is not effectively managed. Besides, it may lead to chaos, resentment or crisis of the organization. During the period of initiating change at Toyota Company, most employees resented the idea of diversification in production since it would lead to overproduction. In addition, most employees rejected the idea of increasing the prices of its cars to match other players in the market because they would lose their market share. However, the company tried to avoid resistance to change by ensuring there was clear communication and support systems to make people understand the positive effects of the change.

Stage 3: Acceptance

This is referred to as the “turning point” in the change transition curve because people stop focusing on the negative aspects of change but embrace the positives. Dawson (2005) observes that when people begin to embrace and accept the anticipated changes, they critically explore the positive attributes of the change without any undue pressure. In Toyota Company, people are initiated to accept change through training and given enormous opportunities to contribute towards the change mechanism. For instance, employees are given the freedom to come up with new, creative and innovative ideas of diversification in production. In order to remain competitive in the automotive industry, creativity and innovation must be in the focus of the company. As a result, employees gain acceptance to change by laying a sound foundation that is all involving and inclusive.

Stage 4: Commitment

This is the apex of the change transition curve whereby the change has gained full effect and acceptance by all employees. In Toyota Company, the stage of commitment is characterized by rebuilding their ways of operation hence reaping the benefits of change. For instance, since Toyota adopted the policy of diversification by producing a variety of models of cars, the company has gained prominence worldwide and tremendously increased its market share. As a result, Toyota is regarded as a market leader in the production of cost effective vehicles that are efficient in fuel consumption. During the fourth stage, Burke (2010) recommends that organizations must “celebrate” success of change management since it sets a precedent and a track record of significant achievements and accomplishments.

Conclusion

Based on the diagnosis on the need for change, Toyota has adopted a quality control path that is focused on lean manufacturing, which has led to constant improvement in service delivery through the production based on quality. Besides, the company has initiated organizational changes which have been implemented to curb low productivity, and poor quality products.  Through the careful application of the change transition curve, Toyota Company has been able to effectively introduce and initiate organizational change with minimal resistance. The company has ensured that there is a clear communication system and involvement of all employees in the change management process. As a result, the company has effectively dealt with the global and internal factors which influence change management processes.

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