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Introduction of the Companies

Toyota is a multinational automotive car manufacturer with a worldwide serving area. This company was found in the year 1937 by Kilchiro Toyoda. They are regarded as one of the global leaders in hybrid electric vehicles. They have encouraged the people worldwide to encourage adopting the hybrid vehicles so that it can be used in a mass market. They have been producing 10 million automotive vehicles per year since 2012.  This company had found its place as the largest company in Japan by market capitalization. They have focused on to produce vehicles that can be eco friendly and stop the accidents in roads. The first product created by them was Type A Engine.

Volkswagen has been one of the giant companies in the automotive industries to have stepped in the business. The headquarter of this company is situated in Wolfsburg. This company was also founded in the year 1937 and thus 80 years old. The chairman of the board directors is Herbert Diess. They produce automobiles products and they are one of the best in this industry. They have more than 6 million employees over the world. They have expanded their markets to several countries and they will be looking to invest more because they have used the recent technologies to produce their new vehicles. They have focused on their corporate social responsibility as well.

In the first question the topic to discuss is about the background of the two companies on which this paper has to be based on. The two companies are Toyota and Volkswagen. These two companies work in the same industry but their country or origin is different. Both these companies work in the automobile industry. Volkswagen belongs to Germany where it is produced in the German city of Wolfsburg. On the contrary, Toyota is an Asian company based in Japan ("Toyota Motor Corporation Global Website", 2017). These two companies have been selected to show the difference between them as their country of origin is in two different continents. There are various differences like the geographical and climatic differences. The target audience and their requirements are somewhat different from each other as well (Tiwari & Herstatt, 2012).  

Volkswagen produces and assembles the plants for the local markets in over 15 countries all over the world. ("Volkswagen Vento- Book a Test Drive | Volkswagen", 2017). So they can be considered as a global company. They are an international organization in this context. However, Toyota possesses more producing factories all over the world and thus has a larger market. Toyota has their branch in Australia as well, called the Toyota Australia. Australia has been considered as the country where Toyota has been assembling the parts of the cars outside Japan ("TOYOTA MOTOR CORPORATION GLOBAL WEBSITE", 2017). 

Question no 1

It was in 2015 when Volkswagen had been alleged of a very grave accusation. The accusation was about the nitrogen oxide emission. The pollution amount had been crossed by them and this had been a very harmful thing for them. The authorities claimed that Volkswagen had been cheating the customers about the gas emission of nitrogen oxide. This is because nitrogen oxide has been regarded as a very detrimental gas for the human health and causes a lot of damage to the human health. Diseases like stroke, asthma, abnormal situations at the time of birth and many more could be caused. This caused environmental harms as well (Songolzadeh et al., 2014).

It is the automobile industry in which the both companies operate in. They have some same set of missions, vision and goals in their organizational objectives. Hence, there are some differences as well. Though both of them produce cars, there exists some difference on how they have looked upon their objectives and goals and they have presented these things in terms of their annual reports (Thomas & Lamm, 2012). Sustainability is one of the main determining factors for them. As noticed in their reports, it can be noted that Toyota has their focus on corporate governance, social responsibilities and environmental issues. On the contrary, Volkswagen’s main focus is on economic factors, people or the customers and the environmental issues ("Volkswagen Vento- Book a Test Drive | Volkswagen", 2017).

Toyota was founded by the stalwart leader of Japan Sakichi Toyoda. The legendary founder’s heritage has been carried by Toyota over the years. The goals and objectives of the organization have been in alignment with that of their legendary leader ("TOYOTA MOTOR CORPORATION GLOBAL WEBSITE", 2017). Their goals, missions and visions are clearly aligned with their statements. These company goals are described very clearly. In the case of Volkswagen, it can be stated that they are a European company this is why they look to focus more on preparing their future strategies and amending the current strategies. This is really helpful for them as their thinking process is much advanced than the others ("Volkswagen Vento- Book a Test Drive | Volkswagen", 2017). 

Society

One of the pioneering missions of Toyota is ‘Always Better Car’ and this strategy drives them to build cars that will ensure the traffic safety in their countries. They follow an integrated approach for the road safety and the drivers must follow them ("Toyota Global Site | Sustainability Report 2016", 2017). The drivers get an optimal support at every stage of their driving. Thus their major concern rests on the safety of the passengers and obeying the traffic rules ("New Cars Toyota Australia: Prices, Service Centres, Dealers, Test Drives", 2017). They shift their focus on the every stage of pre and post crash timeframe and the post accident rescue so that safer cars can be created (Tai & Chuang, 2014).  There have been issues in which Toyota has been able to mention in their CSR report:-

  • They have introduced the Panoramic View Feature Monitor that gives the driver a surrounding view. It assumes as if the vehicle itself has a transparent nature and identifies any obstacle in front of them.
  • Another introduction is the Intelligent Clearance Sonar. This helps to avoid any collision and reduces the damages of cars resulting from the accident ("New Cars Toyota Australia: Prices, Service Centres, Dealers, Test Drives", 2017).
  • They have also introduced the first auto parking safety system in the world. This helps the car to pick the auto parking position.
  • The HR policies of Toyota has always encouraged the participation of women in the workplace and thus encouraging the diversity ("Toyota Global Site | Corporate Governance", 2017).

Question no 2

Environment

The Financial Year 2014 has suggested that Toyota had been able to produce 54 million fewer tons of the Carbon dioxide emissions than the vehicles which are powered by gasoline. ("New Cars Toyota Australia: Prices, Service Centres, Dealers, Test Drives", 2017). They have saved almost 20 kilolitres of gasoline through this process. It is a notable fact that the level of fuel efficiency in Japan, USA and Europe has developed in a great level. Toyota also introduced MIRAI and FCV (Fuel Cell Vehicle) that will be able to maintain sustainability in the automobiles ("Toyota Global Site | Sustainability Report 2016", 2017). Toyota has always considered the greenhouse gas emissions as prior issues for their focus. They have been working with all the vehicles lifecycle to reduce the greenhouse gas emissions ("Toyota Global Site | Corporate Governance", 2017).

Social Contribution

Toyota has contributed through different activation systems on a global basis. They have been doing it through their factory offices to enhance the lives of the communities. It has been noted that the Annual Nationals Mayor’s Challenge in USA that has been taken by the citizen to participate in the Carbon dioxide emission problems and saving water ("Toyota Global Site | Sustainability Report 2016", 2017). This is called the ‘My Water Pledge’. The UK branch of Toyota has contributed to various environmental causes like biodiversity. The initiative to stop the global warming has been taken by Toyota Motor Thailand as well. The Toyota Weekend Farmers promote the environmental awareness through the activities of cultivation and growing vegetables in Korea.

Corporate Governance

The company believes that if they apply the proper corporate governance within their operations, they will be able to achieve a long term sustainable growth ("Toyota Global Site | Corporate Governance", 2017). They are keen on building strong relationships with their stakeholders. Business partners, local communities and other groups. They also focus on delivering the best goods to their customers (Tricker & Tricker, 2015). 

Economy

The mission of Volkswagen is to become the leading motor and automobile company in the world by the end of 2018. The matter of customer satisfaction and sustainability is also in their minds as well. The German Centre of Automotive Management (CAM) has already awarded them as the most innovative car producer. They believe in the process of localizing and contribution to resourcing in the countries like China and Russia ("Volkswagen Vento- Book a Test Drive | Volkswagen", 2017). 

Toyota

People

They like to focus on the personal management and they have put stress on providing vocational education to their employees.  They had made the arrangements of training more than 18000 apprenticeships around the world in 2014 ("Volkswagen Sustainability Report 2016 - Home", 2017) Some of their initiatives are Student Talent Bank, Star-Up Europe, recruiting 7.39% disabled people being recruited in their organization as well. Their CSR projects have been effective as well ("Volkswagen Vento- Book a Test Drive | Volkswagen", 2017).

Environment

They are committed to achieve better environmental performance throughout the world. They are focused to produce eco-friendly cars. They will look to achieve a better community performance as well (Hsu & Zomer, 2016).

As both Toyota and Volkswagen belong to the same industry, they have some common worries or concerns to think about.  As they belong to different countries, they have some different economical, cultural factors working so their priorities may not be of the same level as well.

The road and traffic safety is one of the major concerns for them so they look to get rid of the road accidents by technologies and producing many new ways. They have arranged many awareness programs for achieving their target ("Toyota Global Site | Sustainability Report 2016", 2017). They have monitored that the number of road accidents were higher and their steps have catered to improve the situation. The carbon emissions and other air pollution issues have been looked after by them as well.

Volkswagen has been engaged in recruiting better talents to serve their organization by human resource development ("Volkswagen Vento- Book a Test Drive | Volkswagen", 2017). They will look to retain the talents all around the globe. Technological advancement is another issue for them as well. Volkswagen has also though about their role in intelligent transport.  They are keen to improve the community lives and providing them with road safety on a larger aspect (World Health Organization., 2015). 

Despite the differences in missions and objectives, the cultural impact of their strategies is huge. Toyota, being a Japanese company, has looked to carry forward the tradition of their founder where Volkswagen has focused on thinking about a sustainable future ("Toyota Global Site | Sustainability Report 2016", 2017).

The Zadek et al’s criteria for social accounting standard of quality, both the reports of the two companies have been compared to throw light on relevant issues. Completeness and Continuous Improvement has been mission from Volkswagen’s report.

Volkswagen

Zadek et al’s (1997) criteria

Toyota Sustainability Report 2015

Explanation

Volkswagen Sustainability Report 2014

Explanation

Inclusivity

Yes

Customers: Customer Assistance centre Toll free 365. Employees: Global CQO meeting. Business partners: Work together with applying the CSR activities ("Toyota Global Site | Sustainability Report 2016", 2017).

Yes

Customers, employees and stakeholders are in the two way communication method ("Volkswagen Sustainability Report 2016 - Home", 2017)

Comparability

Yes

Setting up the CSR objectives comparing with the earlier years

Yes

Volkswagen reports have been compared between years to achieve the specific goals.

Completeness

Yes

All achievements have been described with the negative ones as well like Car Recall Issue and Conflict Mineral Issue ("Toyota Global Site | Sustainability Report 2016", 2017).

Carbon emission has been the biggest threat but no such negative news has been found in their report ("Volkswagen Sustainability Report 2016 - Home", 2017)

Evolution

Yes

Participate in innovation of eco friendly products and future products like Electric Robot or space robot.

Yes 

Volkswagen believes in urbanization by changing the course for future.

Management Policies and Systems

Yes

All compliances and basic guidelines have been followed ("Toyota Global Site | Sustainability Report 2016", 2017).

Yes

Preventive and compliance approach has been taken and adopt corporate cultures to protect conflicts (Guiso, Sapienza & Zingales, 2015).

Disclosure

Yes

All the essential things like audit report, financial statements have been provided

Yes

Same as Toyota

External verification

Yes

ISO 26000

Yes 

GRI Index, Independent Assurance Report.

Continuous Improvement

Yes

Several projects have been mentioned

Nil

Toyota’s main guiding principles are to be a good citizen, respecting law, provide safe and clean products, and develop advanced technologies, strong team effort and others (Grint & Woolgar, 2013).  The view point of their legendary founder has been followed to achieve greatness. Some of them are:-

  • Automatic driving technologies
  • Beginning Toyota Mobility Foundation for non-profit organizations
  • The ‘Monozukuri’or people development philosophy has been followed.
  • Accepting the Mineral Approach for human rights development

Volkswagen’s main principles focus on stakeholder management, risk management and sustainable management (Carroll & Buchholtz, 2014).  They are engaged in many CSR activities to improve their brand reputation and employing disabled workforce to support that group. Their contributions to education are to be applauded ("Volkswagen Vento- Book a Test Drive | Volkswagen", 2017).

Group discussions were engaged for the social report of the two companies and they were of a great help. I was given the chance to compare the two reports and have an idea of how my other team members are looking at this issue.

I and rest of my team members have found that the Volkswagen report do not have clarity in their issues. The main elements could not be identified. I found that Toyota’s objectives were very clear. I also assumed that as Volkswagen belonged to Germany, a much developed country, their approach to technological advancement was very practical and up to date. One of my group members told me that it would be wrong if I look Toyota, the Japanese company from that perspective. I should not consider Japan as an under-developed country. Japan has been much developed in the past few decades.

We also had certain discussions on the possible Zadek’s et al’s criteria of social reporting. I argued that Volkswagen should not get ‘yes’ in Completeness since they had not mentioned any specific issues in their report that could balance their total presentation. However, the carbon emission issue took place after this report, it should not be overlooked. 

References

Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. Nelson Education.

Grint, K., & Woolgar, S. (2013). The machine at work: Technology, work and organization. John Wiley & Sons.

Guiso, L., Sapienza, P., & Zingales, L. (2015). The value of corporate culture. Journal of Financial Economics, 117(1), 60-76.

Hsu, A., & Zomer, A. (2016). Environmental performance index. Wiley StatsRef: Statistics Reference Online.

New Cars Toyota Australia: Prices, Service Centres, Dealers, Test Drives. (2017). New Cars Toyota Australia: Prices, Service Centres, Dealers, Test Drives. Retrieved 4 September 2017, from https://www.toyota.com.au/home

Songolzadeh, M., Soleimani, M., Takht Ravanchi, M., & Songolzadeh, R. (2014). Carbon dioxide separation from flue gases: a technological review emphasizing reduction in greenhouse gas emissions. The Scientific World Journal, 2014.

Tai, F. M., & Chuang, S. H. (2014). Corporate social responsibility. Ibusiness, 6(03), 117.

Thomas, T. E., & Lamm, E. (2012). Legitimacy and organizational sustainability. Journal of business ethics, 110(2), 191-203.

Tiwari, R., & Herstatt, C. (2012). Assessing India's lead market potential for cost-effective innovations. Journal of Indian Business Research, 4(2), 97-115.

Toyota Global Site | Corporate Governance. (2017). Toyota Motor Corporation Global Website. Retrieved 4 September 2017, from https://www.toyota-global.com/sustainability/csr/governance/

Toyota Global Site | Sustainability Report 2016. (2017). www.toyota.co.jp. Retrieved 4 September 2017, from https://www.toyota-global.com/sustainability/report/sr/

TOYOTA MOTOR CORPORATION GLOBAL WEBSITE. (2017). TOYOTA MOTOR CORPORATION GLOBAL WEBSITE. Retrieved 4 September 2017, from https://www.toyota-global.com/

Tricker, R. B., & Tricker, R. I. (2015). Corporate governance: Principles, policies, and practices. Oxford University Press, USA.

Volkswagen Sustainability Report 2016 - Home. (2017). Sustainabilityreport2016.volkswagenag.com. Retrieved 4 September 2017, from https://sustainabilityreport2016.volkswagenag.com/home.html

Volkswagen Vento- Book a Test Drive | Volkswagen. (2017). Volkswagen.co.in. Retrieved 4 September 2017, from https://www.volkswagen.co.in

World Health Organization. (2015). Global status report on road safety 2015. World Health Organization.

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