Evaluation of Organizational business strategy (Essay Sample)

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Evaluation of Organizational business strategy
Introduction
An organizations business strategy refers to the means such organization goes about achieving its desired goals and objectives (Kourdi, 2009, p.1). A business strategy for any organization will cover a range of areas that include long-term operations, relationships with stakeholders, competitive strategies, Generic strategies, and even a general scope of the activities that an organization undertakes. For instance, a company can pursue generic strategies such as growth or expansion, globalization /internalization, and retrenchment, which involves eliminating some lines of operation so as to focus on a company’s best lines. Additionally, there are competitive strategies that are quite necessary. Such strategies entail devising ways to do business better than competitors (Sekhar, 2009, p.3). Competitive strategies may take the form of differentiating the organization products from those of competitors, economies of scale among others.
The evaluation of a company’s business strategy may therefore take involve looking at: how the company carries out its strategic planning process, and what such strategic plans entail; how the company formulates new strategies based on the changes that the organization faces in both its internal and external environment. Also the company’s methods of policy evaluation and selection as well as how the company implements the selected strategy or strategies. This paper explores the various business strategy aspects of Toyota Motor Corporation with respect to any methodologies and techniques that may be relevant in such regard.
Strategic planning for Toyota Motor Corporation
The strategic planning process for Toyota, commonly referred to as, Hoshin Kanri is has been very active in the implementation of its lean manufacturing (Marksberry, 2011). However, such strategic planning process has been criticized for its instances of failure to quantify or accurately demonstrate how the preferences are formulated and integrated into the company’s strategic planning process. Toyota’s process in regard to strategic planning shows a high preference towards knowledge-based and resource-based theory meaning the development of resources, particularly human capital is given much importance. Toyota’s mixture of deliberate and emergent approaches to strategic planning create a focused style of creativity that is difficult to develop without a problem-solving process which is highly structured. The process is also suitably balanced between the cross-organizational aspects of agency, and this means that various aspects of strategy formulation and implementation are more closely unified compared to conventional approach (Marksberry, 2011).
The business strategy for Toyota Motor serves as the principal guide in conducting, coordinating, and enhancing research, marketing, development, and all other organizational activities spanning the motor industry. Additionally, it also serves to increase the creation of fresh and fascinating efforts through region identification in the motor challenges and opportunities. The company’s business plan shows a changing or dynamic planning process, brings together manufacturing agenda and comprehensive research, as well as an interlinked set of strategies focused on the achievement of the desired goals (Pantong, 2013).
Toyota’s business strategy discloses and identifies the organizational purpose about long-term goals, action program, objectives, and the allocation priorities for the available resources. It is a unifying and coherent framework and integrates patterns of decision making. Additionally, the strategy helps in establishing distinctive managerial tasks at organizational, business, and functional levels. Overall, the business strategy for Toyota aims at nurturing and advancing the company’s intend.
The primary stakeholders
Toyota’s internal stakeholders include the shareholders /owners of the organization, employees, unions, and senior management team. Its external stakeholders include business partners /suppliers, customers, local communities, debt holders, government, and environmentalists.
For all the various stakeholders, it is highly significant to comprehend their particular expectations comprehensively. It is also important to understand the extent to which such stakeholders are likely to be inclined towards influencing the corporate strategies and purposes. There could be the development of conflict of interest spurred by the stakeholders’ divergent interest. The management should therefore set a business strategy that ensures that even the personal goals lead towards the organization’s overall goals.
Toyota makes various considerations for its business strategy in regard to the participation of its active stakeholders. The company ensures that the business is run according to the interests of the shareholders who, by virtue of being the company owners, deserve an active participation in the company’s strategic affairs (Marksberry, 2011). There are efforts to ensure that before the business strategy is set, there is a clear vision regarding what the shareholders want and how such vision should be measured. The business strategy is, therefore, set after determining the direction the company should be steered. This ensures that both the short term and the long term objectives of the business strategy are made accordingly.
The participation of the employees and other internal stakeholders plays an important role in meeting the organizational targets, and it is, therefore, important to understand the nature of the environment they would like to work in as well as the type of culture they expect and how it can be created. In Toyota Motor, for instance, business is entirely oriented to IT and production staff, and this creates a workable organizational environment which is the most critical factor. During the creation of a strategy, therefore, it is important to consider the demands and needs of the employees.
Toyota is an already highly established company, and so are all its management levels. Toyota has the ability to attain a higher level of output than the current level. The company has sufficient infrastructures and other resources and has the capacity to accommodate any level of innovative developments. This could however be more efficient and effective if the company’s human and other resources were used applied more effectively.
Objectives, Mission, Vision, and Measures for Toyota Company
Toyota’s business objectives include: maximizing shareholder wealth as well as giving them good returns for the capital they have invested in the company; effective management of working capital; quality production; efficient resource utilization; cost management; overcoming competition; and favorable public image (Toyota Motor Corporation, 2010).
Mission statement
Toyota is one of the most successful manufacturing companies in the world whose mission is to contribute, through enhanced automotive manufacturing, to the economy, the society, and people’s lifestyles. Additionally, the company aims to benefit the whole world with affordable vehicles while placing emphasis on attaining customer satisfaction. The mission also entails pursuit of such things as safety, comfort, peace of mind and reliability which protects and enhances the company’s goodwill and, therefore, ultimately providing quite attractive returns to the investors (Toyota Motor Corporation, 2010).
Toyota’s corporate principles include; respecting the culture and language of each country in which it trades; providing clean, safe, and reliable products to improve the quality of life globally through the activities it undertakes; creating new technologies aimed at meeting the changing demand of customers; building trust and respect between the top management and labor, and fostering an efficient corporate culture; working together with its partners in attaining mutual benefit alongside long-term growth.
Vision statement
The company aims at achieving stable growth, in the long term, in harmony with the global economy, the company stakeholders, the local communities, and the environment.
Formulation of a New Strategy
Formulation of new strategies by companies is necessitated by the continually changing aspects of both the external and internal environment (Moon, 2010). For a company that operates on a global scale such as Toyota, formulation of new business strategies is indispensable. Such strategies are formed on the basis of different analyses that apply various methodologies and techniques. A business strategy can be designed to serve the short-term organizational goals or long-term organizational goals. Short-term goals are the goals to be realized in less than a year while long-term goals exceed a period of one year.
Resources required
Implementing a new strategy will require various resources which include: Funds for funding such things as market research, hiring legal experts, and acquiring new technologies; effective team of human resources who embrace the organization’s mission and vision; and the necessary materials to support the manufacture of its vehicles
Environmental Audit
In formulating a strategy particular strategy view, the present business environment of the automobile industry is analyzed. In the formulation of its business strategy, Toyota Motor conducts an analysis its macro environment. It is important for all companies, not just Toyota to thoroughly understand the environment in which it operates. Such analysis is mainly carried out in the Porter’s five forces model an...