To further illustrate the key points of international business management, this paper aims to demonstrate how to prepare the situational analysis for a transnational company by establishing Toyota Motor Corporation's business in United States, one of its host-country nations, as an example.
Based on a comprehensive examination in terms of Toyota's US auto market competition, industry trend, environmental scanning, and internal analysis, the paper identified some strengths as well as pressing issues for Toyota's US subsidiary. Key findings include: 1) Global managers relocated in the United States need to overcome cultural and language barriers and should be motivated to tackle issues such as the complexity of long-distance communication and different ways of doing business. 2) Toyota's current sophisticated global organizational structure ‘leaves shareholders exposed to the risk of environmental volatility from all concerns of the world', thus giving rise to difficulties in effective operation coordination. And 3) The joint venture entry mode could result in over investment or other policies and the prevention of a multinational company from executing specific manufacturing and marketing policies.
To solve the problem of lack of cultural awareness and trust at workplace, Toyota can motivate the expatriates by rotating and diffusing team leadership, rotating meeting locations and building networks between managers from different backgrounds. In response to the reporting and coordination hindrance due to sophisticated global organizational structure, it is recommended Toyota improve its overall structure and be more horizontally integrated because this approach allows HCN company to leverage both local and central capabilities in the tenet of ‘Be global, act local'. Meanwhile, there is no absolutely right approach when it comes to foreign market entry strategy.
[...] For example, it is reported that will expand its in-house electric vehicle development capabilities by becoming the first major US automaker to design and manufacture electric motors, a core technology for hybrids and electric vehicles.” (GM Worldwide, 2010) As a global partner of GM, Toyota stands a good chance of lowering costs and improving quality, reliability, performance, and manufacturability of motors by controlling the production and election processes aided by the new technology Regulatory Factors In response to the Toyota product recalls crisis, the US government will naturally tighten the automobile quality inspection and limit the numbers of Toyota's imports. [...]
[...] Being one of the “team members” makes each have a sense of belonging in an international company (Bradley et al., 2005). More importantly, Toyota does not have ‘blame' culture, which means the system is blamed if anything goes wrong United States Auto Competition Landscape and Industry Analysis Despite the intense industry competition, “Toyota has a large market share in the United States, but a small market share in Europe.” (EconomyWatch, 2010) Exhibit 2 showed Toyota's US growing market share at around 18% in the fiscal year of 2008. [...]
[...] According to the company's recent press release (2009), North American subsidiary of Toyota Motor Corporation is headquartered in New York, with offices in Washington, D.C. and Miami, Florida, and is the holding company for Toyota's North American sales, engineering and manufacturing operating units.” One of the problems is that none of its operations are functionally integrated, which means all regional decisions are reported to the Japanese headquarter. Recently, the board came up with a “product-focused management” style by building a commitment worldwide to “strive to make better cars” to turn about the recent global recall aftereffect. [...]
[...] In addition, it is often more cost-efficient a company to hire a local manager than to transfer one from headquarters.” (Deresky, 2006) The training and development of TCNs for managerial positions is critical to the long-term success of Toyota. It seems plausible that transnational companies like to place well-trained managers with abundant international experience to their subsidiaries. For Toyota, it is more than the case. Take G.M-Toyota in Fremont, Calif. “Managers as well as employees from both the US and Japan learn to work side by side and adjust to a unique blend of country and organization culture” (Piotrowski, 2010). [...]
[...] Thus, global managers need to be fully prepared to meet the challenges of world markets and rapid, fundamental changes in a world of economic interdependence Purpose To further illustrate the key points of international business management, such as managing the internationalization process and managing organizational strategy and structure, and market entry strategy, this paper aims to demonstrate how to prepare the situational analysis for a transnational company by taking Toyota Motor Corporation's business in United States, one of its host-country nations as an example Company Profile Founded in 1937, Toyota Motor Corporation was passed down from a Japanese mill to Kiichiro Toyoda. [...]
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