International Business Strategies Toyota and Volkswagen

The lean production which pioneer by Toyota is widely recognized by the world's automotive industry, that is because Toyota shakes the American automaker's dominance. This suggested mode of production insists on human-centric, achieves manufacturing just-in-time and automation, reduces and limits the cost to a greatest extent. When Volkswagen entered the Chinese market, and established the FAW-Volkswagen, it phases the lean production system, and the staffs optimize from the initially more than 8000 to 5700 people.

However, as an old Japanese industrial enterprise, Toyota carried out a Japanese-style management notion, which is the obedience from senior management and reflected a kind of Japanese spirit. In the wake of globalization of production, cultural clash has gradually emerged. Enterprises should face the changes from a single culture to multicultural environment. In addition, employees who have different nationalities, different beliefs work together, the dealing with administrative affairs will inevitably different.

The core management absolutely expected that the overall enterprise could correspond with their own management notion; therefore it promotes enterprise culture which could influence the company from top down. But, just relying on several managers who are strange from Japan, it seemed to exceedingly slight to change numerous local employees. Ultimately, the perfect Japanese management model is broken down, that is not because the original design makes mistakes in structure, but the conflict with the lower-level managers in carrying out. Thus, the enterprise culture should be not the pure from top down, it needs to listen more from the people on the ground, and gradually form an integrated cultural environment.

In reality, in Volkswagen Company, it is always appeared that gaps remain between local employees and senior managers. And to be a local employee or a small junior & middle-manager, it is sometimes very hard to understand why the top management of the corporation would make such a decision, and they have to implement even they do not willing to do so. While, this kind of lack of understanding of management behavior, and even the displeasure is what impacts the executive function in the business management.

Therefore, how to deal with the multicultural environment is a puzzle to all the multinational enterprises. Toyota Company had tried to pursue the Japanese spirit, but they have been all kinds of obstacles. At least today, the Japanese finally made some concessions. The promotion of foreign management might change the inherent contradiction, and transform the enterprise culture from suitable for Japanese into fitting the globalization and transformation. After all, local managers know more about the natives; probably they could get it any better.

While, Volkswagen is famous for hire host executives, and widely adopt the management system of host countries. It is quite efficient in communicate and implement, but agency problem might exist between the local managers and the Germany executives.

Facing fiercer and fiercer market competition, Volkswagen profoundly realized that the competition among enterprises in the final analysis is human competition, and staff determines the future of the company. That is because no matter how outstanding the product quality is, it has to rely on the manual operation to complete. Therefore, the jumping place of management in Volkswagen is that let the employees fundamentally play a positive role and become the host of the business.

The Volkswagen executive resolutely abandoned the typical management style of 'punishment to the escrow', and adopts a culture of continuous improvement, and establishes an attitude and confidence of 'if you work hard enough at it, there isn't anything you cannot do'.

In order to improve the comprehensive quality of employees, Volkswagen never stops on coordinate the work training of employees. In addition, Volkswagen consistently implements to improve the lives of its staffs, mobilize the initiative and incentive on doing his work well. For instance, in the year of 2001, 621 employees of the FAW-Volkswagen moved to the three newly-completed high-rise accommodations.

Due to all aspects of innovation on management system, dramatically reduce labor costs; improve the operating efficiency, at the same time, because of the development and updating of market-oriented product, FAW-Volkswagen tops the table in marginal benefits among Volkswagen subsidiaries throughout the world. In internationalization process, Toyota adopted the contract system. On one

hand, lifetime employment system is not suitable for overseas talent environment, and the high cost shortcoming exists. On the other hand, it is expected the company operates abroad is the importance of long-term development, thus it is necessary to value long-term executives.

By sending the lifetime employees from its parent company as core management, Toyota realized the balance between the long-term corporate strategy and cost control. In the Toyota Company, Japanese employees enjoy the treatment of life-time employment, senior system and enterprise trade union. However, for the native employees, recruitment has various forms, it emphasize on the personal competencies and the ideas transmission the corporate internal.

Comparing with Toyota, Volkswagen introduces the model of KVP², namely the continuous improvement process. K stands for constant and continuous, V represents improvement, P means the whole, and square indicates acceleration, this is what Volkswagen does to catch up with and surpass the Japanese automobile industry. This kind of management mode allows the workers become one obvious factor, and permit them to question and find a solution to the problem. As a result, it raises productivity, improve quality and save money (China Information News, 2001).

In brief, both Toyota and Volkswagen face the problems in human resource management when they expand globally, but they choose different remedies and strategies to ease the adverse effects and operate relatively well in their management fields.

REFERENCES

  • Anand (2008) _Volkswagen Orients Human Resources Work Worldwide to Its Growth Strategy_ [Online]. Available at: <http://machinist.in/index.php?option=com_content&task=view&id=1322&Itemid=2>
  • China Information News (2001) _The Revelation of FAW-Volkswagen's Innovative Management_ [Online]. Available at: <http://auto.sina.com.cn/news/2001-08-01/12180.shtml>
  • Dougherty, C. (2007) _Volkswagen Prepares Reorganization to Centralize Management_ [Online]. Available at: <http://www.nytimes.com/2007/01/10/business/worldbusiness/10iht-vw.4163537.html>
  • Downs, J. (2009) _Toyota Employment Tradition in Jeopardy_ [Online]. Available at: <http://www.jobbankusa.com/News/Employment/toyota_employment_tradition_in_jeopardy.html>
  • Environmental & Social Report (2003_) Toyota Social and Economic Aspects-Employees_ [Online]. Available at: <http://www.toyota.co.jp/en/environmental_rep/03/jyugyoin03.html>
  • Kyung-Min NAM (2010) _Learning through the International Joint Venture: Lessons from the Experience of China's Automotive Sector_ [Online]. Available at: <http://dcsh.xoc.uam.mx/eii/globelicswp/wp1001.pdf>
  • Liker, J. K. & Hoseus, M. (2007) _Human Resource Development in the Toyota Culture_ [Online]. Available at: <http://www.edcoinfo.com/CEDocuments/Downloads_GetFile.aspx?id=316006&fd=0>
  • Smith, P. (2001) _Toyota Defends its Traditions, Including Lifetime Employment_ [Online]. Available at: <http://www.sme.org/cgi-bin/get-press.pl?&&20013101&MM&&SME&>
  • Volkswagen Annual Report (2008) _Driving Ideas-Annual Report 2008_ [Online]. Available at: <http://www.volkswagenag.com/vwag/vwcorp/info_center/en/publications/2009/03/GB_2008.-bin.acq/qual-BinaryStorageItem.Single.File/Y_2008_e.pdf >
  • Wartzman, R. (2010) _Toyota's Management Challenge_ [Online]. Available at: <http://www.businessweek.com/managing/content/mar2010/ca2010034_000939.htm>
  • Liker, J. K. & Hoseus, M. (2007) Human Resource Development in the Toyota Culture [Online]. Available at: <http://www.edcoinfo.com/CEDocuments/Downloads_GetFile.aspx?id=316006&fd=0>
  • China Information News (2001) The Revelation of FAW-Volkswagen's Innovative Management [Online]. Available at: <http://auto.sina.com.cn/news/2001-08-01/12180.shtml>
  • Environmental & Social Report (2003) Toyota Social and Economic Aspects-Employees [Online]. Available at: <http://www.toyota.co.jp/en/environmental_rep/03/jyugyoin03.html>
  • Wartzman, R. (2010) Toyota's Management Challenge [Online]. Available at: <http://www.businessweek.com/managing/content/mar2010/ca2010034_000939.htm>
  • Environmental & Social Report (2003) Toyota Social and Economic Aspects-Employees [Online]. Available at: <http://www.toyota.co.jp/en/environmental_rep/03/jyugyoin03.html>
  • Kyung-Min NAM (2010) Learning through the International Joint Venture: Lessons from the Experience of China's Automotive Sector [Online]. Available at: <http://dcsh.xoc.uam.mx/eii/globelicswp/wp1001.pdf>
  • Liker, J. K. & Hoseus, M. (2007) Human Resource Development in the Toyota Culture [Online]. Available at: <http://www.edcoinfo.com/CEDocuments/Downloads_GetFile.aspx?id=316006&fd=0>
  • Volkswagen Annual Report (2008) Driving Ideas-Annual Report 2008 [Online]. Available at:
  • <http://www.volkswagenag.com/vwag/vwcorp/info_center/en/publications/2009/03/GB_2008.-bin.acq/qual-BinaryStorageItem.Single.File/Y_2008_e.pdf >
  • Anand (2008) Volkswagen Orients Human Resources Work Worldwide to Its Growth Strategy [Online]. Available at: <http://machinist.in/index.php?option=com_content&task=view&id=1322&Itemid=2>
  • Dougherty, C. (2007) Volkswagen Prepares Reorganization to Centralize Management [Online]. Available at: <http://www.nytimes.com/2007/01/10/business/worldbusiness/10iht-vw.4163537.html>
  • China Information News (2001) The Revelation of FAW-Volkswagen's Innovative Management [Online]. Available at: <http://auto.sina.com.cn/news/2001-08-01/12180.shtml>
  • Kyung-Min NAM (2010) Learning through the International Joint Venture: Lessons from the Experience of China's Automotive Sector [Online]. Available at: <http://dcsh.xoc.uam.mx/eii/globelicswp/wp1001.pdf>
  • Downs, J. (2009) Toyota Employment Tradition in Jeopardy [Online]. Available at: <http://www.jobbankusa.com/News/Employment/toyota_employment_tradition_in_jeopardy.html>
  • Smith, P. (2001) Toyota Defends its Traditions, Including Lifetime Employment [Online]. Available at: <http://www.sme.org/cgi-bin/get-press.pl?&&20013101&MM&&SME&>
  • China Information News (2001) The Revelation of FAW-Volkswagen's Innovative Management [Online]. Available at: <http://auto.sina.com.cn/news/2001-08-01/12180.shtml>