Change Management: Case of Toyota

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Background of Toyota

Toyota Motor Corporation, headquartered in Japan was founded in 1937 as a multinational automotive manufacturer (Toyota, 2020). Due to its innovative manufacturing procedures, it became the largest automobile for the first time in 2008 while leaving General Motors behind. It deals in production of cars, trucks and motorcycle under five different brands including Lexus and Scion as luxury brands. it is also involved in the field of robotics and the material handling. However, due to some external issues including COVID-19 Toyota’s worldwide production reduced from 8,985,000 in 2019 to 8,820,000 in 2020 (Koyodo News, 2020). It also halted the production lines at six factories in Japan in April while decreasing the numbers of units produced by 20%. 

This report will be based on analyzing key external factors faced by Toyota that needs to be watched closely. Moreover, the effective change management process will be designed for Toyota to meet the external opportunities and scale out the impact of external problems as identified in the sections below. 

Problems and Opportunities for Change Strategy

Toyota belongs to the automotive sector that faces several challenges related to environmental policies across the global. According to Green Peace (2019), carbon footprint of the global car industry sat at 9% of the total annual global greenhouse gas emissions. Hence, the automotive industry is responsible for 1/10th of the total GHG emissions throughout the lifecycle of vehicles (García-Machado & Martínez-Ávila, 2019). The car industry is facing grave challenge associated with rising pollution levels in the globe due to which the international and national regulations are being designed requiring the cars to become greener throughout the lifecycle. With customers and shareholders’ focus shifting towards sustainability and environment protection amidst climate change, water shortage and resource depletion, Toyota has to focus on improving its manufacturing processes for reducing the negative impact on environment and society. 

In order to mitigate the risks associated with climate change and greenhouse gas emissions (GHG), Toyota has to consider complete elimination of CO2 throughout the life cycle including production, driving, disposal and recycling (Potter & Graham, 2019). This means that the company has to focus on assembling the materials that decrease CO2 emissions during the processes of manufacturing while reducing the number of parts use. It is also required to focus on using recycled materials and designing of parts for reducing CO2 emissions at the disposal and recycling stage as well (Jia & Wang, 2019). Eco-friendly designing of the cars is required like that of Eco-Vehicle Assessment System (Eco-VAS) for reducing the environmental impact of the cars. 

Given the above grave external challenges and an opportunity of leveraging demand for electrical and hybrid vehicle, the process of change management must be triggered at Toyota. For initiating the change management, two of the models can be applied in the given case study. 

Lewin’s Three Step Model

Lewin’s 3-step model is based on unfreezing, changing and refreezing (Tang, 2019). 

  • Unfreeze is the stage in which the company tends to identify the driving and resisting forces and then visualize the desired end result by dismantling the old activities. 
  • Change is the stage where new concepts and alternatives are introduced and the company moves into a new stage through involvement and participation amongst stakeholders.
  • Refreezing is the stage where the changes implemented previously are made constant forming new basis of the company’s strategies.

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