This website uses cookies to ensure you have the best experience. Learn more

Toyota: An Example Of Good Corporate Governance

1795 words - 7 pages


Corporations the world over have been publicly criticized for improving their firm’s bottom line at any moral or social cost. Ethics essentially “refers to the issues of right, wrong, fairness and justice.” Clearly, examples such as Enron, WorldCom, and even Conrad Black tested society’s views on sound ethical business and the link to what society sees as “good” governance practices. Although the controversies involve issues matched in variety only by the types of companies, they all virtually involve some form of abuse of stakeholders trust. These cases are not representative of the entire spectrum of today’s business environment; in fact, there are a number of companies whose competitive advantages are based on “good” corporate governance practices – namely stakeholder involvement. As a result, I have chosen to present and explore in this essay the practices of one such company: the Toyota Motor Corporation while highlighting its “good” corporate governance principles.


Toyota is a global leader in automotive sales, technology and production while also retaining one of the world’s most recognizable and highly valued brands. At the heart of their success is the innovative and groundbreaking production methods made possible by the company’s recognition of the value of employee empowerment. Employee involvement is defined as “consist[ing] of a variety of systematic methods that empower employees to participate in the decisions that affect them and their relationship with the organization.” At Toyota, the company has employed these proven techniques of co-determination to encourage employee, and supplier involvement in their decision making process, since these practices “help improve both the ability and attitude” of stakeholders. In fact, one of the guiding principles of Toyota requires the company to “foster a corporate culture that enhances individual creativity and teamwork value, while honouring (sic) mutual trust and respect between labor (sic) and management.”

2.1 Employee Involvement
Toyota is renowned for utilizing autonomous work groups that constantly generate innovative results to both processes and product issues. The use of these groups defined as “teams of workers without a formal, company-appointed supervisor who decided among themselves matters traditionally handled by a supervisor.” The use of these management techniques not only fosters innovation, but improves the quality of products as well. Once this structure is combined with the “set of organised, well integrated, and continuous activities involving both managers and workers” that defines Toyota’s “Total Quality Management System,” the result is consistent recognition of vehicles with the highest initial quality by various rating associations.

2.2 Suppliers
Toyota’s approach extends beyond treating employees with respect, but also looks to develop “an atmosphere of long-term trust and of a partnership based on mutual...

Find Another Essay On Toyota: An Example Of Good Corporate Governance

Research on the Importance of Corporate Governance

2130 words - 9 pages governance has on businesses. Lastly, the third objective determines the measure of effectiveness in a Corporate Governance framework. What accounts for ‘good corporate governance’; how do we know the current system in place by businesses are effective or not. Are there any example of current definitive practices and methods that have proved successful?   Literature Review 1) What is the true importance of Corporate Governance in the

Analyzing of supply chain drivers on example of Toyota Company

1981 words - 8 pages ones.For example, the majority of Toyota service centers and stores facilities have a number of features including but not limited to:· Waiting Area.· Refreshments.· Newspapers and Magazines.· Toilets.· Courtesy Car Service.· Service Bays.Aside from, in Japan these facilities are presented as very effective and spreaded network.Globally, Toyota makes facilities decisions to be more responsive to their

A Survey on Compliance of Corporate Governance

4023 words - 16 pages Corporate governance has evolved into an important institute within recent years because of the highly visible corrupt and unethical practices of large and global companies such as Enron, WorldCom and Parmalat, the Italian dairy conglomerate. These unethical practices had left stakeholders and governments in a confused condition (Brian 1997 p616).It has constantly attracted attention because of its extreme significance for the economic health of

Report and Analysis of Corporate Governance

2193 words - 9 pages audience for his publication. Short (1999) have emphasized on the Tricker comprehensive definition as the corporate governance could explain in term of four roles of responsibilities: direction, executive action, supervision and accountability. In addition, good corporate governance is all about certifying that the demands and interests of all of an organization’s stakeholders are taken into account in a balanced and transparent manner. Good

Corporate governance: Role of institutional investors

2998 words - 12 pages likes of Kumaramangalam code or the Bajaj code but instead must be comprehended from the entire network of rules and regulations impinging business so that there is an integrated and holistic system created for ensuring that transparency and good corporate governance prevail.Growing relevanceCorporate governance is on the radar screen as investors have realized that it is not just another abstraction but a force that can vitally influence the

The Role of Ethics in Corporate Governance

1743 words - 7 pages Martha Stewart portrays the lack of corporate ethics. The failure of such business has seen an increased pressure to incorporate ethics in corporate governance. The result of corporate scandals has been eroding investor and public confidence. The entire economic system has experienced some form of stress from loss of capital, a falling stock market and business failures. The past scandals that failed the ethics test were characterized by lack

Risks of Non-Compliance in Corporate Governance

2295 words - 9 pages . Reputation is yet another risk of companies who do not comply with special litigation, compensation, nomination, and governance committees. McBride will want to guard their company's reputation against such conflicts of interest on their board of directors, as they expand, and grow.McBride can learn from Trident Microsystems, which is an example of proactive corporate governance by putting the checks and balances in place for an organization

Risks of Noncompliance in Corporate Governance

3796 words - 15 pages something of substance. For example, good customer relations can keep a business going even if underlying non compliance is an issue.Understanding governance regulations also holds its own risks. Interpreting and understanding are two different effects and if confused, a company can find themselves facing serious difficulties down the road, including fines, jail time for those involved in direct non compliance and sometimes even indirect, company

The Rules and Principles of Corporate Governance

1048 words - 5 pages -financial disclosure or Annual audit conducted by an independent, competent, and qualified auditor in accordance with the International Standards on Auditing. (1) (2) In conclusion, it was established that corporate governance is a crucial aspect of running family-owned enterprises. This essay put forward three elements of good corporate governance practice, but there are many more elements that can be incorporated in having a successful family business. In the end it should be mentioned that not one solution (element) but a combination of elements shall be designed company specific for the enterprise to succeed.

Implementation of a Corporate Governance Plan

2209 words - 9 pages which solutions to implement into the compliance effort.The company will begin to implement enterprise risk management by developing an appropriate internal control and corporate governance system. Enterprise risk management (ERM) is an important discipline that is gaining popularity and recognition both as a best practice and as just good management. More often risk executives in related roles are getting involved or are being assigned the

Introduction of Corporate Governance: Company Law Malaysia

2230 words - 9 pages Introduction of corporate governance After the 1997 Asian Financial Crisis, the investor confidence in Malaysia was severely affected. Since the issuance of the Malaysian Code on Corporate Governance in 2000, the Securities Commission Malaysia has continuously been improving their governance framework, where the code was revised and securities were amended. In 2011, the Corporate Governance Blueprint was issued, which was used as a base to

Similar Essays

Importace Of Corporate Governance Essay

3419 words - 14 pages Untitled The issue of executive remuneration has continued to be the most headline grabbing corporate governance issue dominating the 2003 AGM season. In the past couple of years the media has recounted countless stories of senior directors walking away from companies with huge compensatory payoffs. Such high-profile cases have fed a growing mood of public disgust and shareholder disdain, and this has led in turn to many

Stand By Me, An Example Of Good Literature

1814 words - 7 pages The film, Stand by Me, can be studied as an example of good literature by noting the use of well-built characters. An adequate amount of symbolism can also be found throughout the film. Near the end of the story, the main character has an unexpected epiphany that notes a radical change in his character development. The film carries a fantastic example of a coming-of-age theme for each of the main characters. The use of family dynamics in

Corporate Governance Impact Of Globilisation On Corporate Governance

2411 words - 10 pages profitable commitments while CSR believes that companies have a purely moral responsibility to act in an ethical manner satisfying the interest of all their stakeholders.As refer to the OECD Principles of Corporate Governance (1999), they are intended to reflect common criteria of good corporate governance:"A good corporate governance regime helps to assure that corporations use their capital efficiently. Good corporate governance helps, too, to

Corporate Governance And Management Of Small Business Enterprise: An Executive Summary

1512 words - 6 pages interests of other stakeholders’ (Singam, 2003).According to a survey conducted by Standard & Poor’s Governance Services and the Corporate Governance & Financial Reporting Centre at the National University of Singapore (Shea, 2006), it has demonstrated that listed companies in Malaysia surveyed score an average of 43 corporate governance points out of a maximum of 140. The score is quite far below listed companies in Singapore which