Toyota Boshoku: Human Resource Management

Introduction

The company which has been selected for this paper is Toyota Boshoku. This paper is based on human resource management activities of the company. This paper is going to help with understanding the extent to which the Human Resource functions and the HR strategies, policies, and practices are integrated within the organization’s business strategy. The paper is going to demonstrate the sound grasp of the HR literature and models, and draws on a range of theoretical concepts and frameworks and apply them within the report to inform and reinforce the discussion and analysis. This paper is also going to be discussing the human resource competencies in relation to the planning/formulation, and implementation of human resource management strategies within the company.

Human resource is defined by many companies as a combination of the administrative functions with the performance of the company’s employees and their relations along with the company’s planning. Basically it helps the company to achieve the goals and objectives that are set for them by the management. As you all know that human resource activities also make a large contribution to the company’s success in many ways but the HR activities mostly support the strategies of the organization. The HR department basically exists to support the managers and the employees of the company and to pursue the company’s goal or objectives.

Background – Toyota Boshoku (Australia)

Toyota Boshoku is a part of the Toyota Group of companies, it was established on the 1st October, 2002 and it started to operate from November, 2003. The head office of the company is situated in Boundary Road, Laverton North, Victoria. Toyota Boshoku Australia is known for its car interior systems (i.e. seats, package tray, floor carpet, insulator dash inner and silencer CTR console etc.). As of 2009 the company employs somewhere around 442 employees.

The vision of the company is to become a global company in all forms and a leading company in the World Automotive Interior Systems and Filter Supplier market. The company wants to fully satisfy their shareholders, customers, employees, and as well as partnering companies. The mission of the company is to ensure that the employees are satisfied by the company and that to contribute them with the prosperity of the company. The company strongly believes in corporate social responsibility. Toyota Boshoku also believes in giving back to the community and contributes in the form of economic and cultural contribution to the area where they operate. (Toyota Boshoku 2008).

SWOT Analysis

Originally, SWOT matrix represents the company as an enterprise with balanced opportunities and threats, consequently, the company has perfect opportunities for further development. Effective application of the business principles and HR strategy is one of the most important and essential strengths of the company. However, the increased attention to strategic HRM distracts the company’s attention from market capitalization processes, which makes the company weak within the competitors.

PESTEL analysis

As for the PESTEL matrix, it should be stated that all the environmental factors promote the successful business development of the corporation, nevertheless, it is necessary to emphasize that the social factor of the business environment appears to be the most favorable for the development of business performance. In the light of this fact, it is necessary to emphasize that HRM strategy and the approach towards managing business performance through HR should be paid less attention, and the company needs to focus on technological and legal aspects of business performance.

Organization’s Strategic Intentions and Goals

Formulation, implementation and evaluation of decisions which are cross functional enable the organization to achieve its stated goals and objectives is known as strategy. The strategy of the company is based on growth, entrenchment and stability.

The strategic intentions of Toyota Boshoku Australia:

• Toyota Boshoku plans to restructure their business quality and planning so that they are able to cope with the external environment like the recession of 2007 – 2009. The restricting of the business will be done accordingly to the region.
• The company plans to reduce the fixed expenses, so that the cost of the production goes down and the company is able to stabilize itself once again.
• Promote management activities which will help Toyota Boshoku to improve the operational efficiency of the company and this can only be done by implementing IT throughout the organization. (Porter, 1985)
• Deal with any sort of environmental risks that occur in the present and be prepared for the future risks as well
• Developing and implementing a global manufacturing system so that it is consistent and provides the best products.
• Toyota Boshoku needs to identify opportunities that will help the company to grow. (Porter, 1985)
• Develop a global culture along with a human resource system that will ensure Toyota Boshoku’s way, globally, in all its branches throughout the globe.

The goals of Toyota Boshoku Australia are as follows:

• To achieve the set revenue target of 2009.
• The goal of the company is to spend minimum to create maximum.
• To improve the profitability of the new products that are launched into the market
• To implement production lines, to create quality products.
• Promote the use of technology throughout the organization (Porter, 1985)
• Enhance TQM within the organization
• Promoting of CSR

When we talk about strategic management in companies like Toyota Boshoku, it is considered as a process which helps the managers get answers to statements like the future of the organization, courses or actions that are need to be taken etc. There are different kinds of strategies that can be implemented by Toyota Boshoku to improve its performance and get a competitive edge over its competitors. (Porter, 1985) It can implement strategies like the following:

Competitive Forces

A company like Toyota Boshoku it can only survive in the long run if it is able to develop strategies that help the company to face 5 competitive forces. They are

• Bargaining power of customers: Here the Toyota Boshoku has to be careful because the customer’s influence increases over a company.
• Bargaining power of suppliers: the supplier power is based on the concentration of suppliers and the availability of suppliers in new emerging markets like the Middle East. (Kotler 1997 pg 228)
• Threat of substitute product: a substitute product for any Toyota Boshoku product can cause the company to lose its business. Car interior systems of Toyota Boshoku can be substituted for any manual car interior systems by companies like Honda, and Mitsubishi etc. (Porter, 1985)
• Rivalry among competitors: there is a great deal of competition between 2 similar companies in the same industry. The competitor for Toyota Boshoku in the Australian region would be Honda.
• Potential new entrants: This is another one of the competitive forces that affects the company in a big way. (Kotler 1997, p 228)

Competitive Strategies

If Toyota Boshoku needs to get a competitive edge over its competitors like Honda, it needs to develop competitive strategies, which will combat with the competitive forces. (Porter, 1985) There are 5 competitive strategies, they are as follows:

• Differentiation: with the help of information technology the company will be able to create new products and services which will help to differentiate, and it will also help to reduce the differentiation advantages of the competitors like Honda
• Lower Costs: the company can reduce it costs by introducing technology in their manufacturing operations, and the company will be able to provide their customers with good products at affordable prices (Kotler 1997, p 228)
• Innovation: with the help of information technology, Toyota Boshoku will be able to create new products and will be able to drastically change their business processes, for example, the new and improved Silencer CTR Console. (Porter, 1985)
• Growth: the company needs to enter the Middle Eastern market with time, this will then expand to the South Asian markets as well.
• Alliance: Toyota Boshoku needs to create new alliance with their customer and supplier in the Middle Eastern markets (Kotler 1997, p228).

The Nature and Function of Strategic HRM

The purpose of human resource management is basically to improve the productive contribution of the employees in the organization in ways, which are strategically, ethically and socially responsible. Human resources basically determine every organization’s success. The HR department basically exists to support the managers and the employees of the company and to pursue the company’s goal and objectives. The managers and the employees of the company achieve that purpose by meeting the objectives of the company. Objectives are considered as benchmarks against which the actions can be evaluated. The human resource objectives not only reflect the intention of the management but also balance the organizational challenges, the HR function and the people who are affected by it. If the company fails to succeed in its objectives, it would then harm the company’s profits, performance, and even its survival in the market (Armstrong 2003, p. 38).

The major functions that are included in HRM are recruitment, selection, training and development, orientation, placement, separation, career planning, performance appraisal, salaries and wages, incentives and gain-sharing, benefits, services and security and employee relations and assessment. It is the function of the HR department to face the challenges that arise overtime. The HR department is usually faced with 2 kinds of challenges: 1) Internal challenges; which are also the organizational challenges. Internal challenges for example would include union, information systems, organizational conflicts between the company and its employees. 2) External challenges; are those problems that exist due to the changing environment upon which the management has no control over. Change in the company’s environment actually happens due to different kinds of situations, for example, workforce diversity, technology, economics, and government. The HR department has to follow 4 steps so that they can overcome the external challenges. They are as follows:

• Monitor the environment
• Evaluate the impact of the challenges on the company
• Take proactive measures, i.e. implement approaches that would help the company to achieve its goals
• Obtain and analyze the feedback. (Armstrong 2003, p 39)

Strategic Human Resource Management

The use of strategy in human resource management has become a new cornerstone in business. More and more firms are now developing their organizations with independent human resource departments. These practices have transformed organizational productivity and worker satisfaction enormously and have led organizations to work more effectively and efficiently. Organizations, recently troubled by economic turmoil and the hard global financial crisis are now making sure that the assets (human resource) of the company are retained, especially those employees who have the required training and are properly developed. Though a number of people have been downsized; the employees that the organization knows have uniqueness are retained even at higher pay scales.

For example, a study made on the perceptions of senior managers and their views on human resource management strategies; it was found that human resource management is considered an important aspect in the running of an organization. Senior managers support the human resource management functions, which shows the values and organizational culture that transcends from upper management to lower management. The study showed that each respondent organization had a human resource director at a high level of management. Further research revealed that human resource management is seen as a means to effective leadership development. And therefore, most firms develop the sector in their organization in the hope to create, re-enforce or sustain its current personnel leadership status. Though managers are optimistic about the effects of human resource management on competitive success of an organization, studies show that a positive association between HRM and productivity exists, but there is no concrete empirical evidence to state that whether HRM resulted in the increase of productivity or not (Schuler & Jackson 2007, p98).

Moreover, according to Schuler and Jackson (2007), there is a strong necessity to emphasize that within the frames of traditional HRM, the job analysis model of the Toyota Boshoku Company is established as the appropriate basis for developing HR practices that meet legal requirements. Originally, these techniques were not deeply developed and incorporated into the business performance of the company to serve the foundation of the HRM system, which is aligned with generally aligned with the company’s strategic direction. The model, described by Schuler and Jackson incorporates all the necessary strategic requirements for the successful implementation of HRM principles, aimed at improving the social factor of company’s activity.

In accordance with Miles and Show model (described in Miles and Snow, 2003), the HRM structure is based on the following four stages:

• Defender
• Prospector
• Analyzer
• Reactor

Defender. It is generally regarded to be a mature type of the company, which is able to defend its own interests and the interests of its employees and team in general, thus, providing highly effective business performance and marketing activity.

Prospector is thethe type of company that is seeking for new opportunities by constantly changing structures, strategies, and principles (including the HRM sphere). R&D is the core point of its activity. (Miles and Snow, 2003)

Analyzer. It is the company which aims to avoid any risks by thorough and deep analyses of the business environment and various circumstances.

Reactor. Is the company-loser – a company which does not have enough control over the situation, and has to react, instead of creating the business circumstances and influencing the marketing environment.

Toyota Boshoku, In its turn, aims to incorporate the three former qualities, for creating the image of a successful business performer, which confidently acts on the market. (Miles and Snow, 2003)

According to managers, pro-active solutions to HRM problems help identify employee needs well in advance to take adequate and effective decisions. It also provides them with time to develop new projects, and implement them more successfully. They realize they need of solving the problem before it can exist and to do that, a pro-active strategy must exist. More and more organizations are clearly stating their SHRM policies in writing to integrate it into the organizational culture and values. Such pro-activeness is clearly evident with the number of labor unions falling the past 8 years considerably. Their relations with their organizations have drastically changed, and workable compromises are now sought after because most of their needs are already being filled through organizational HR sectors. Thus, an organization not only has to be pro-active but to a certain degree, has to be reactive as well. The multinational corporations around the globe have adopted four approaches towards HRM and they are as follows:

Geocentric: The geocentric policy is best suited for global and trans-national companies around the world like Toyota Boshoku. This policy employs and seeks the best individuals for employment regardless of their caste, creed, sex or religion etc. The advantage of this policy is that it makes the best use of the employment and it helps the executives to work in a number of different cultures, it helps the employees to gain experience. And this policy helps to build a strong culture of the company and creates an informal network of communication.

Regional: The regional policy is basically best suited for companies that are not expanding themselves globally. This policy does not provide a great deal of experience for the employees to gain experience or to work in a diverse culture.

Polycentric: The polycentric policy is best suited for the multinational corporations because all the headquarter positions of the company are held by the parent company. What happens in this is that the host companies usually have subsidiaries of the parent company. The advantages of this policy is that the myopia culture within the company is alleviated, and it helps to transfer the core competencies of the parent company to the subsidiaries and plus it is not expensive to implement this policy within the company.

Ethnocentric: The ethnocentric policy is related with staffing of the organization, here it means that all the key positions in the company are filled by the parent company nationals, for example, Toyota Boshoku opens a branch in India all the head positions will be filled by the Australian nationals who work in Toyota Boshoku. This policy is best of international business because they do not want to lose with the parent company. The advantages of this policy are that there is a unified culture within the company and it helps to transfer core competencies to the other branches of the business around the globe.

HR Competencies of the HR Function and Management

HR competencies are very much important to the HR professionals and as well as to the employees in their development along with the human resource department as well in Toyota Boshoku. Human resource competencies of the HR function and the management will help the HR department of Toyota Boshoku by providing the department with a clear strategy for the HR department with the enhancement to serve all stakeholders with the help of an integrated approach. The HR strategy of Toyota Boshoku will align with the strategy and the structure of the company and it will help the department to create and implement HR measures and scoreboards which will help the department by keeping track of the indicators which will add value to the company (Schuler & Jackson 2007, p 98).

As for the matters of HRM function analysis, it is necessary to stipulate that in Toyota Boshoku company these functions do not differ essentially. The main functions are enlisted below.

Strategy Creation and maintenance

This is based on that how the company can overcome its problems and can win in the future. With strategy architect, the HR department of Toyota Boshoku will be able to identify and incorporate business trends and their impact on the business, and they will be able to forecast potential obstacles to success along with facilitating their process by gaining strategic clarity.

Global Human Resources Strategy Implementation

A management tool that is used in the human resource is the global human resources scorecard; it is an important part of the strategic scorecard because it considers the group as a whole. Success factors and performance measurement criteria are the key performance indicators in the scorecard; this makes it possible to compile global key figures based on human resources in the targeted market plus it makes it possible to measure it successfully and measure the success of HR processes and strategies. The information which is gained through these measurements can help the HR directors to make decisions, this tool also provides targeted support to the business strategies of the company and its processes in different divisions of the company, and it also creates the foundation for mutual but continual leaning processes throughout the group with the help of best practices target support.

Organizational Structure Shaping

Toyota Boshoku would be able to maintain strong strategic partnerships and system integration with their suppliers, buyers, clients and shareholders and stakeholders etc. The network of alliances will provide the company with a flexible structure and it will help the company to move towards new market opportunities.

People and Culture

Originally, this factor entails staffing and HR development of the organization. From the point of view of successful HRM, people and culture function may be regarded as the most important factor and function of HR management strategy. As we know that people and culture are an important part of a company and with the networked organization that uses technology it will be able to delegate the authority and collaboration, which will be expected and rewarded by the management of Toyota Boshoku. Performance management, which is a part of culture development is generally regarded as the component, which is aimed at improving the overall performance of the company through managing and regulating business activity and ruling business actions performed by teams, managers and employees.

Conclusion

In the end beyond the impact on traditional HR activities, global challenges affect the organization in more than one way. Perspectives do change. Outlooks become more global as the top- level managers become more aware of international developments. Those in the organization who lack this kind of perspective or are unable to develop it fail to grasp the growing changes in global competition. Strategies and policies become culture bound and do not benefit from the rich diversity of viewpoints found internationally.

Global HR management affects the company and the HR department in countless ways. Some of the company concerns raised for the department include the challenges of troubleshooting, workplace diversity and cultural awareness. In the process of learning about a foreign culture, the international HR managers get a bonus i.e., they become aware of their own cultural values and heritage and may decide to capitalize on or modify some of their accustomed behaviors.

Recommendations

• Creating a productive and enjoyable work in Toyota Boshoku environment is the dual responsibility of human resource managers and human resource experts, as it may be mentioned, basing on the analysis of HRM strategies of the company
• Having a diverse culture in a company is considered to be a beneficial process that will help in an employee’s growth while it also increases the cultural sensitivity and as well as the mentoring skills of the HR department members
• In the light of the fact that HRM is one of the ways a company can gain a competitive advantage, it should be stated that it is not easily duplicated by any other company, as in the case of technology.
• If the company wants to maximize the employee’s motivation, the HR department has to understand and respond to diversity. The word to guide the HR managers would be flexibility. The managers must be ready to design work schedules, compensation plans, and benefits, work settings and like to reflect upon the employees varied needs.
• Another notion that should be pointed out is the consideration, which claims that HR management and HR strategy should be based on the model by Miles and Show, with the only exception that reactor phase should be skipped.

References

Albrecht, M H., 2001 International HRM: Managing Diversity in the Workplace. Blackwell Publishing. Pg No. 229

Armstrong, M.,2003.A Handbook of Human Resource Management Practice: Fully Updated to Reflect Current Thinking, Practice and Research. Kogan Page Publishers. Pg No. 37-55

Armstrong, M.,2000.Strategic Human Resource Management: A Guide to Action. Kogan Page Publishers. Pg No. 105

Daft, R L.,1997. Management. The Dryden Press. Pg No. 639-642

David, F R., 2006. Strategic management: Concepts and cases. New York: Prentice-Hall. Pg No. 117

Dransfield, R.,2000. Human Resources Management: Human Resource Management. Heinemann. Pg No. 13

Fullmer, R M.,1983. The New Management. New York: Macmillan Publishing Company. Pg No. 110

Hohnen, P.,2007. Corporate social responsibility: an implementation guide for business. Web.

Hoskisson, R E.,2008. Strategic Management – Concept and Cases. Cengage Learning. Pg No. 95

Kotler, P.,1997. Marketing Management: analysis, planning, implementation and control. Prentice-Hall. Pg No. 228

Miles, R. Snow, C. 2003 Organizational Strategy, Structure, and Process Stanford Business Books.

Porter, M.E. (1985) Competitive advantage: creating and sustaining superior performance. New York: Free Press.

Powell, G.N.,2004. Managing a Diverse Workforce: Learning Activities. Sage Publications Inc. Pg No. 53

Schabracq, M.J.,2007. Changing Organizational Culture: The Change Agent’s Guidebook. Wiley. Pg No. 23

Schuler, R S. & Jackson, S E.,2007. Strategic Human Resource Management: Text and Readings. Blackwell Publishing. Pg No. 98

Toyota Boshoku., 2008. Web.

Ulrich, D, Wayne Brockbank, and Jon Younger, 2007. ‘Human Resource Competencies: Responding to Increased Expectations.’ Employment Relations Today, Fall, pp.1-11.

Ulrich, D. & W. Brockbank, 2008. ‘The Twenty-First Century HR Organization’, Human Resource Management, Winter 47, (4), pp. 829–850.

Werther, W B. & Davis, K.,1996. Human Resource & Personnel Management. McGraw-Hill. Pg No. 34-35