Dynamics Of Internal Corporate Governance Essay

Question:

Discuss about the Dynamics of Internal Corporate Governance.

Answer:

Introduction

Global market scenario of automobile industry is rapidly changing along with the development of the technologies. Competition in the automobile industry is also showing growth due to the entry of more and more automobile organizations. However, with the emergence of the new competitors in the market, established organizations such as Toyota and Volkswagen are less affected. This is due to the reason that, these two organizations are not only selling automobiles to their customers but also considers other social aspects in driving their business activities (Mayyas et al., 2012).

Toyota is the leading automobile organization in the world with having the status of market leader in the global market. Toyota was being originated in Japan and gradually entered and gained footholds in several regions around the world with their diversified product portfolio. On the other hand, Volkswagen is a German automobile brand and is just behind Toyota in terms of sales. They have set their target of overtaking Toyota and becoming the largest automobile manufacturers in terms of sales by 2018. They are also having presence in various regions around the world and are having diversified product portfolio.

Thus, both the organizations are going to neck to neck to compete for the global leadership in the automobile market. This assignment will help to determine other aspects such as environmental criterion of both the organizations to identify their competitiveness on one another.

Both of the organizations are maintaining effective policies of publishing their social accountability reports. However, determination of their reports helped to identify the differences in their approaches to the social responsibility. It is been seen that Toyota is having more extensive and holistic approach in reporting their social accountability report (Toyota Global Site | Sustainability Report 2016, 2017). On the other hand, Volkswagen is having intensive approaches in dealing with the social accountability (Volkswagen Sustainability Report 2016 - Strategy - Introduction, 2017). They are more concentrated with effective and sustainable internal management in the organization. However, newer technologies are being initiated by both the organizations to deal with the environmental issues.

Social accountability report of Toyota

Customers are being considered as the most preferred stakeholder for their business activities. Accordingly, they are taking various initiatives in providing the highest standard of safety to their customers. One of the key initiatives includes the safety features being installed in their vehicles (Kusano & Gabler, 2012). Toyota safety sense C and sense P is being promoted by them which comprise of camera and laser sensors. These features help the vehicles to automatically detect the obstacles and eventually help to reduce the road casualties. They to enable the vehicle owners in reducing the parking issues are also initiating intelligent parking systems (Reve & Choudhri, 2012). They have also initiated collision free safety body for their vehicles, which will prevent the damage for the occupants in case of accidents.

Toyota has taken the initiatives to curb the carbon emission from their vehicles as well as from their facilities. They are promoting hybrid vehicles, which will have less level of emission for their customers (Li et al., 212). Already, the sale of their hybrid vehicles crossed 8.90 million units. Toyota has taken the initiative of reducing the carbon emission by about 90 percent by 2050. Electric vehicles are also be introduced by them which will further decrease the pollutions (Hawkins et al., 2013). They also introduce fuel cell vehicles in order to promote vehicles running on alternative fuels. The average fuel efficiency of their vehicles increased from 28 Km/L to 40.8 Km/L (Zhu, Ma & Zhang, 2012).

Along with the customers, Toyota also involves employees in reporting their social accountability (Wintoki, Linck & Netter, 2012). They follow effective human resource management in their internal organization (Armstrong & Taylor, 2014). Their main concentration of their human resource management is the mutual trust and coordination among the internal stakeholders. Similar approaches are being promoted and maintained by them in all the facilities around the world. Every single year, Toyota promotes initiation of the discussions from their key affiliates around the world to ensure the effective working environment in the organization. Workplace health and safety are also been given most preference to ensure the safety standard in the organization (Goetzel et al., 2014). Their approach of ensuring the interests of the employees eventually helps them in providing effective customer service.

Various community activities are being promoted by Toyota in enhancing the sustainability of the surrounding societies and communities (Cheng, Ioannou & Serafeim, 2014). One of the most prominent initiatives for them is Kokoro Hakobu Project, which had been initiated as recovery support for the Japan earthquake. Their community activities are ranging from the climate awareness to providing education and supporting plantation programs.

Social accountability report of Volkswagen

The internal management of Volkswagen is being designed and implemented in such a way that it will be flexible to the rapid change in the automobile industry. Innovations are being promoted in the organization, which in turn helps them in enhancing their competitive advantages in the market (Eiriz, Faria & Barbosa, 2013). It also helped them in achieving the award of most innovative automobile manufacturer by CAM. According to the approach being initiated by the management, equipping and engaging the employees will help them in maintaining the effective working environment in the organization. Adhering with the legislation and other external environment is one of the key aspects that are being considered by them in order to maintain the standard across all the partners in the value chain.

One of the key motives of the human resource management of Volkswagen is to be the attractive and sustainable employer. Reliability and transparency are being most preferred in their internal activities. They have introduced diversity policy in order to promote diversity in the workforce (Barak, 2016). This is due to the fact that, their operational facilities are situated in different locations around the world. Thus, promotion of diversified workforce helps them in having employees from different cultures and offering in accordance to the diversified customer requirements.

They maintains dual model of vocational education and training to equip their employees with required skills and competitiveness, which is necessary to compete in the market. By 2016, 19490 people are being trained under this project. Another initiative named Wanderjahre are being introduced in offering the people in working with any brand of Volkswagen for 12 months.

They are promoting various initiatives towards their activities related to the environment. One of the key initiatives is the introduction of the eco-friendly cars in the market. They have initiated a program named together strategy 2025 to adhere their operational activities with the sustainable development goals of United Nations.


Toyota and Volkswagen are being from Japan and Germany respectively. Thus, due to the fact that, different countries are having different cultures and scenarios, the key considerations and preferences for these organizations are also different. Environment is being extensively and community activities are being given the most preferences in Japan, which is being reflected in the social accountability of the Toyota (Mitchell, 2013). On the other hand, Germany is representing first world economy and technological advancement and innovations are being given much importance, which is being seen in the social accountability report of Volkswagen.

Moreover, the social activities of the Toyota and Volkswagen are more customer oriented and employee oriented respectively. Cultural aspects of the respective countries are also having influences in this activity also. This is due to the reason that, the cultural and social traditions being followed in Japan are more having holistic approach than that of Germany. Thus, the stakeholder management by Toyota is being initiated by more extensively. On the other hand, Volkswagen is more concentrated on generating innovations from their internal organization and promotion of technological advancement in their facilities and products.

Another prominent difference between the activities of Volkswagen and Toyota is their organizational objectives. Toyota being the largest carmaker in the world in terms of sales are more inclined in sustainable development. On the other hand, Volkswagen’s objective is more economy oriented. Their short-term objective is to be the largest carmaker in the world by overtaking Toyota with the initiation of technologies and innovations.

According to the vision statement of Toyota, they are committed to initiate sustainable development in achieving their organizational objectives. Accordingly, they have designed their social accountability and internal management. They have introduced eco friendly cars, which will on the one hand offer the desired experience to the owners and on the other hand, will help to curb the emission. Their vision statement of sustainable development is being followed by initiating of various projects for the community empowerment (Griggs et al., 2013). Maintaining of the workplace safety is also being initiated according to the vision statement of being a responsible employer.

Volkswagen also mentioned about their desire of being the attractive employer in their vision statement and in accordance, they have given the major concentration in the human resource management. Majority of their social activities are being employee oriented along with accomplishing the other aspects of sustainability.


The determination of the activities being mentioned in the social accountability report of both Toyota and Volkswagen are being discussed in the group. Our group has the opinion that Toyota is having more effective way and structure of reporting than that of Volkswagen. According to me, I was of the opinion that, Toyota has maintained more transparency and fairness in report their social accountability report. This is due to the reason that, they have given all the issues that are being faced by them in the recent years. However, on the other hand, Volkswagen has not stated their issues such as diesel gate in their report. Moreover, anything negative to their business activities are not being discussed in their report.

With having the discussion regarding the Zadek et’s criteria, my group has given the opinion that majority of the aspects in the criteria list are being fulfilled by both the organizations. However, Volkswagen is being trailed in not discussing their negative issues in the report. Thus, according to my group, Toyota has given the more transparent view in the reporting their social accountability than Volkswagen. Moreover, my group also stated that Volkswagen though is not proved as efficient as Toyota in reporting, however, they are more specific in detaining their sustainability project than Toyota. According to them, Toyota has given more generalized view regarding their initiatives, whereas Volkswagen is being more specific in this approach. I argued that Toyota has more extensive and holistic approach than Volkswagen regarding this, but they proved that Volkswagen has reported less information in their report but what they given is more specific than Toyota. Further evaluation of both the report by me helped to gain the understanding about the structure of the report of them. It is being seen by me that, though Toyota has given more extensive information but Volkswagen maintained the detailing of their given information in their report.

Reference

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