Cultural Challenges Faced By Toyota In International Business Essay.

Toyota Company's Production Process

International business has allowed many companies to expand their business to different parts of the world. But it is very important for them to understand different cultures and adapt to it (Cultural dimensions of international business, 2015). The present report is based on Toyota Company and its cultural challenges. It is among the largest companies in terms of revenue ad sales. It is headquartered in Aichi, Japan and has more than 300 thousand employees across the globe. Toyota Company had to face many difficulties in maintaining public relations in US as they continued to follow Japanese culture. Apart from this, issues in international business cross cultural theories and methods to deal with miscalculations have also been included in the report.

Toyota Company is known for its quality and dependability. They have adopted standardization of work in their production process. They have delegated work to small teams who are responsible for continuous improvement (Beamish and Lupton, 2016). In 2009, Toyota Company faced crisis due to improper installation of floor mat. It affected accelerator of the car and the company had to recall 4.3 million vehicles. But the problem increased as the company was slow in taking actions. It affected their public relations as the CEO did not make any media statements about the issue (Cultural dimensions of international business, 2015). This is considered highly unprofessional in US and people believed that the company was hiding something from the public. Toyota's lack of cultural knowledge about US affected their business. Apart from this, international business has to take care of the sentiments and feelings of the people. There are many religions in the world and all of them have their own rules and regulations. If these regulations are not followed by any company then they can get into serious trouble (Adler and Graham, 2017). Apart from religion, there is also language difference. All these factors have to be considered before a company expands their business. It is essential for the management to constantly adapt to the expectations of the people. If there is huge difference between cultures then it affects the business and revenues starts to decline. There are many issues and problems that a company has to face if they are looking to expand their business internationally. Many organizations tend to keep generalize view about all the market and they follow similar strategies everywhere. This situation causes problems for them. Even the government and political parties discourage such companies. The same situation was faced by Toyota and they had to face penalty (Thurman and Nason, 2016). It is essential for a company to prepare a plan and execute the task accordingly. Multinational companies should have certain variations in their operations in different markets. It will be better for them to decentralize decision making so as to serve the customers in a better way. They can even hire local employees or form alliances with domestic companies. It will allow the company to adapt and understand the conditions of a particular area. Even though all these factors are considered by multinational companies but still cross culture remain a challenge for them (Engle and Delohery, 2016). 

Toyota Company's Crisis Management

Toyota Company had to face many problems because they were unaware about US culture. They continued Japanese methods of communication and public relations which were unacceptable to Americans (van Hoorn and Maseland, 2016). Cultural miscalculation can affect the brand image and reputation of a company. There are two theories which can be used to avoid cultural miscalculation in international business:

Uncertainty avoidance: This dimension shows the willingness of cultural members to accept uncertainty or risky situations. The difference in public relations can be seen in case of Toyota. In Japan the problem is resolved silently while it is not considered appropriate in US. They expect the company to apologize and provide explanation for the same (Cultural differences, 2015).

Power distance: Power distance explains the distribution of power in the society. Many countries like US, Canada, Australia and Sweden have equality and less status difference. On the other hand, countries like Malaysia, Panama etc follow power hierarchies. For example, in Korea it is not acceptable to challenge the decision of the superiors (Kolk, 2016). Similar incident took place in the year 2000 where the pilots and engineers of Korean Air rarely suggested any actions to avoid crash. So, it is important for a company to understand the cultural differences and avoid miscalculations in their business. In low power distance areas companies can make use of collective decision making. But it will not work in high power distance countries. All these factors have to be considered before taking any decisions. 

Individualism vs Collectism: Individualism shows preference of an individual while collectivism promotes group decisions and sharing of power (Bullough, Moore and Kalafatoglu, 2017). Americans were expecting the president or CEO of Toyota to address the public and take responsibility for the problem. But the company followed Japanese tradition and this affected their image in US. 

Masculinity vs Femininity: Americans and Japanese differ in terms of masculinity. Toyota company understood this and they took many measures to change the perception of the public (Engle and Delohery, 2016). They even changed their advertisements to communicate positive messages.  

Long vs short term orientation: After the crisis of 2010, the company suspended their sales and made changes to develop long term relations with people. They have made advertisement depicting that they value customers and they want to build long term relations with them.

This framework has given six variations in value orientation. It includes human nature, relationship with others, duty, mode of activity, privacy and temporal orientation. Toyota company had many cultural miscalculations in US (van Hoorn and Maseland, 2016). They followed Japanese culture and public relation which created distrust among US media and public. People expected the company to come out and explain everything to the public but instead they silently worked on the issues.

Cross-Cultural Theories and Methods

Toyota Company improved its position after the crisis but it is essential for them to improve their crisis management skills. They have to change their strategies according to the culture and behavior of people. It will be beneficial for them to organize a cross cultural program to understand the needs and expectations of the people. Toyota learned a lesson from the crisis and they have changed their perception.

Focus on long term relationships: It is essential for a company to build long term relations with the customers (Cultural dimensions of international business, 2015). This cannot be possible unless they adapt to the requirements of the people. Toyota company did similar thing after the crisis and they made advertisements to show their commitment. Moreover, the company appointed employees who take care of public relations in various parts of the world. The crisis of 2010 has been a lesson for Toyota and they have done well after it. They have ensured that the goods they manufacture are of excellent quality and no compromise is done with the standards. It has helped the company to regain their position and sales which got affected after the crisis.

Avoidance of cultural generalization: In order to deal with cross cultural problems, a company should not generalize all the markets. They have to change themselves according to the expectations of the people (Meyer and Peng, 2016). Toyota has made a strategy so as to improve their public relations. They have appointed practitioners who takes care cultural communication and differences in each market. They also have separate budget for this purpose. It is important for the company to acquire more local workers and understand the culture in a better way.

Awareness: International business cannot survive without the cultural awareness (Cultural dimensions of international business, 2015). It allows the company to understand the needs and preferences of the customers. It ultimately improves the customer service. For example, McDonald changed their menu in India. This has allowed them to reach large number of people in India. Similarly, Toyota Company should increase their cultural information inventory.

Cross cultural training: Cross culture training can be used to reduce miscommunication. It can improve performance, reduction in cultural shocks, professional behavior and improved customer services (Bullough, Moore and Kalafatoglu, 2017). 

Conclusion

It can be concluded from the above research that awareness of cross culture is very important for an organization. This will not only improve their business but they will be able to satisfy the needs of the consumers. Toyota Company faced crisis because they did not change their public relations in US. The revenues of the company declined and they had to face criticism. After the incident the company changed their public relation strategy and practitioners for better communication. It has helped them to regain trust among the customers. Cross culture communication remains an integral part of international business which cannot be overlooked. Public relation planning and strategies are required so as properly align with the customers.  

References

Adler, N.J. and Graham, J.L., 2017. Cross-cultural Interaction: The International Comparison Fallacy?. In Language in International Business (pp. 33-58). Springer International Publishing.

Thurman, P.W. and Nason, R.S., 2016. Father-Daughter Succession in Family Business: A Cross-Cultural Perspective. CRC Press.

Engle, R. and Delohery, A., 2016. Cultural Intelligence's Impact on Cross-Cultural Problem-Solving Performance. Double Helix. 4.

van Hoorn, A. and Maseland, R., 2016. How institutions matter for international business: Institutional distance effects vs institutional profile effects. Journal of International Business Studie. 47(3). pp.374-381.

Bullough, A., Moore, F. and Kalafatoglu, T., 2017. Research on Women in International Business and Management: Then, Now, and Next.

Beamish, P.W. and Lupton, N.C., 2016. Cooperative strategies in international business and management: Reflections on the past 50 years and future directions. Journal of World Business.51(1). pp.163-175.

Kolk, A., 2016. The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business. 51(1). pp.23-34.

Meyer, K. and Peng, M., 2016. International business. Cengage Learning.

Cultural differences. 2015. [Online]. Available through: <https://tamkjournal-en.tamk.fi/dealing-with-cultural-differences-in-international-business/> [Accessed on 17^th March, 2017]

Cultural dimensions of international business. 2015. [Online]. Available through: <https://tamkjournal-en.tamk.fi/dealing-with-cultural-differences-in-international-business/> [Accessed on 17^th March, 2017]