As a multinational company in the automotive sector, Toyota engages with a variety of stakeholders who have different interests and needs. However, the most important stakeholder groups for Toyota are listed below, in order of how much of an impact they have on the business:
- Employees
- Customers
- Investors
- Environment
- Communities
Employees. Toyota views its workforce as its most important stakeholder. This stakeholder group pursues career advancement, job stability, and ethical hiring procedures. Through competitive salaries and wages and a program for employee advancement, Toyota’s CSR efforts serve to address the interests of various stakeholders. For instance, Toyota offers On-the-Job Development (OJD) programs and training sessions tailored to various career pathways within the company. The Toyota Way Development, Technical Development, and Management Development training programs are among them. Additionally, the business provides financial aid for staff members’ ongoing formal education. Toyota’s CSR initiatives thereby meet the needs of stakeholders, including its workforce.
Customers. In Toyota’s corporate social responsibility strategies, customers are the second-most important stakeholders. This stakeholder group is interested in high-quality vehicles and services, as well as fair pricing. The Toyota Way and the Toyota Production System (TPS), which seek to enhance effectiveness, quality, and innovation, are the foundations for Toyota’s rapid innovation, which serves these goals. As a result, the company’s CSR initiatives appropriately protect the stakeholder interests of its customers.
Investors. Investors are viewed as another important stakeholder group by Toyota. These parties have an interest in how profitable the company is. Toyota responds to these interests by highlighting its prowess in international commerce. The recession of the late 2000s and widespread product recalls that began in 2009 owing to safety problems like the sticky pedal problem both contributed to the company’s collapse. Toyota, however, now prioritizes greater company resilience over quick expansion after its reorganization in 2013. Toyota’s CSR initiatives therefore take investors’ interests into account as stakeholders.
Environment. Toyota offers CSR initiatives that concentrate on environmental objectives. Business sustainability and environmental conservation are the key environmental stakeholder interests. The Toyota Environmental Activities Grant Program is the company’s method of addressing these concerns. The company distributes cars and money to environmental conservation organizations through this CSR program. For instance, Toyota contributed more than $1 million and five hybrid vehicles to Everglades National Park in 2008. Additionally, a network of environmental activists and projects are supported nationwide via the Toyota TogetherGreen program. As a result, Toyota’s CSR initiatives successfully serve the interests of the natural environment as a stakeholder.
Communities. Communities are interested in their socioeconomic development since they are stakeholders. This stakeholder group is addressed by Toyota’s CSR strategy through a variety of community support and development initiatives. For instance, the business runs outreach initiatives in school to advance reading. Additionally, Toyota’s Go Safely project offers families tools and information for safe driving. Additionally, the company contributes meals to the Food Bank through its Meal Per Hour initiative. Additionally, Toyota supports community development by collaborating with other groups like the American Red Cross. Because of this, Toyota’s CSR initiatives successfully serve the needs of communities as stakeholders.
In This Article...
“Preparing for an unavoidable evacuation in a car” in the event of a disaster
Toyota sends out staff volunteers and gives vehicles to help during natural calamities like earthquakes and torrential downpours.
In recent years, many people in disaster-stricken places have been using their cars as shelters in addition to evacuation centers. A little over 60% of people, including those who temporarily evacuated, did so during the 2016 Kumamoto earthquake.
As dispersed evacuations become more necessary owing to the COVID-19 pandemic and potential earthquakes, it is anticipated that the use of autos would rise.
We are, however, engaging in initiatives to promote safe nighttime car evacuation because there is a risk of economy class syndrome and other problems associated with doing so.
Toyota’s ultimate objective is to eliminate all traffic-related fatalities, so safety is given high priority in all of its products.
How is Toyota’s CSR initiative affecting people?
The motor vehicle or car industry, which emits deadly gas mixtures into the atmosphere through exhaust gases, is one of the major contributors to these greenhouse gases. This condition causes environmental degradation as a result of global warming. The number of cars on the road now exceeds 1 billion.
Each car emits gaseous emissions that contribute a certain amount of greenhouse gases to the atmosphere, which is warming the planet. Currently, more than 31% of the 30 billion metric tons of carbon dioxide that are emitted from human activities are attributed to the transportation industry, which is dominated by the vehicle sector (Hopkins 34). In fact, emissions are rising.
By 2050, it is anticipated that the effects of greenhouse gases would render the world nearly uninhabitable if proper plans for reducing greenhouse gasses are not adopted through severe policy and legislative changes. The pie chart below uses 2014 estimates to display the global carbon emissions by source.
31 percent of carbon emissions come from the transportation sector, which is a sizable quantity of emissions into the environment. Many lobbyists and government organizations have worked for a long time to reduce the use of gasoline, which is a major contributor to the gases that are emitted from industrial activities and the automobile industry, in response to the potentially dangerous phenomenon that the effects of global warming are threatening to cause (Hopkins, 35).
When it comes to making sure that it develops environmentally friendly vehicles, the Toyota Company has been at the forefront. In order to ensure the sustainability of human activities and the environment, it has been possible to limit gas emissions to levels that the earth can tolerate. Environmental responsiveness and sustainability have been described using numerous terminology, including energy efficiency and fuel switching.
There is now a significant chance to reduce or regulate emissions of gases that harm the environment through carbon capture, sequestration, and energy conservation. The Toyota Company has made significant investments in vehicles with improved fuel efficiency and reduced emissions in response to the need to move the globe toward environmental sustainability.
Family-sized cars are now widely available thanks to significant investments made by the company. Additionally, the firm has made place for switching the car’s engine between gas and electricity based on fuel switching technology, which lowers the amount of fuel used each mile and, as a result, lowers the amount of emissions into the environment (Barnea and Rubin 74).
The hybrid cars, which have been in the vanguard of revolutionizing the automotive industry towards environmental protection, are the most ecologically friendly and fuel-efficient vehicles produced by the Toyota Company. The Prius and the RAV 4 EV are the company’s two most popular hybrid vehicle models, and it is currently the market leader in the production of hybrid vehicles worldwide. The RAV 4 EV was discontinued in 2003, but the Prius is still being produced today.
In 1997, after more than two years of extensive study and fine-tuning of the hybrid technology that combined gasoline and electricity, the Prius was first mass-produced for the general market. The Environmental Protection Agency (EPA) had at the time proposed new standards for what an ecologically friendly and fuel-efficient vehicle should have been in terms of emissions and fuel consumption (Lindgreen and Swaen 5).
The first company to follow these new rules was The Toyota Company. It was also the first to assert that it was the first car to ever mass-produce a hybrid vehicle. It embraced a technology that was years ahead of its time, as indicated by the length of time it took for other businesses to start putting hybrid automobiles on the market in large quantities (Lindgreen and Swaen 3).
As of 2014, the Toyota Company’s Prius hybrid vehicle had sold more than 4 million units, making it the most popular hybrid vehicle globally and representing 67 percent of all hybrid vehicle sales. When it comes to upholding CSR aims of protecting the environment, this action is a huge success.
It was evident that the corporation was committed to offering the globe vehicles that were not only fuel-efficient but also ecologically beneficial when it introduced its first hybrid vehicle in 1997. Thus, this time period marked the beginning of a new age in which a motor corporation for the first time accepted a significant corporate social responsibility to make sure that its operations did not have a significant negative impact on the worldwide community (Racz, Muntean and Stan 440).
The Prius was chosen as Japan’s automobile of the year in the year that followed its premiere. The honor was a definite indication that the company’s commitment to having a beneficial impact on society had been noticed. The vehicle’s 1.5-liter engine was capable of 50 mpg (mpg). This event had not been carried out on an automobile that was readily accessible for purchase.
The vehicle utilized electricity power as well, which was switched out for gas, making it the first mass-produced vehicle to do so (Ghosh and Chitra 85). The business expanded its enormous social duty outside of Japan after becoming well-known there. In reality, it started exporting the car to eagerly awaiting automotive aficionados around the world in 2000. It rose to popularity on a global scale.
The Toyota Company increased its investment in the creation of next-generation car models as a result of its success. The second generation of Prius vehicles hit the market in 2003. It brought together significant advancements that consolidated the Toyota Company’s position as the industry leader in hybrid vehicles in terms of their acceptance, profitability, and environmental friendliness.
The updated model had a better battery output capacity that reached 50kW and, as a result, had superior performance of the automobile while utilizing electrical charges to power itself, even if it still had the same gas capacity of 1500cc (Ghosh and Chitra 84). When the company sold more than 1 million hybrid vehicles in just ten years, it had accomplished a significant feat.
The third generation of Prius hybrid vehicles made their debut in 2009 and included significant reductions in energy usage and gas emissions. For instance, the car’s fuel efficiency increased with its increased 1800cc size, reaching 72 mpg and emitting only 82 grams of gas per mile (Hopkins 39). The environmental impact of this development was minimal.
After focusing mostly on the Prius model since 2010, the business has introduced additional hybrid vehicle types that are consistent with its ambition to become the world’s top producer of green vehicles. Although other automakers have developed hybrid car models, the Toyota Company’s hybrid vehicles still make up more than 67 percent of all hybrid vehicles sold worldwide (Racz, Muntean and Stan 441).
Even though new models have appeared, the company has played a significant role in demonstrating that hybrid vehicles are the future of the automotive industry and that other businesses must follow suit if they want to survive in today’s increasingly environmentally concerned society.
The Toyota Company has so far been followed by other businesses with their models. Over 80 million hybrid vehicles are expected to be on the roads by 2019, up from 53.7 million in 2009, as seen in the graph below.
What is the approach to social responsibility?
Businesses have a social duty to act in a way that serves society in addition to generating shareholder gain. For consumers and investors looking for investments that are not only profitable but also benefit society and the environment, social responsibility has taken on increasing importance. Critics counter that the fundamental essence of business does not take society into account as a shareholder.
Key Takeaways
- Businesses should act in a way that benefits society in addition to generating shareholder value, which is known as social responsibility.
- Socially conscious businesses should implement regulations that limit harmful effects on society and the environment while promoting their welfare.
- Companies can practice responsible behavior in a variety of ways, including by encouraging volunteerism, enacting environmental improvements, and giving to charitable organizations.
- The demand for products and services from socially conscious businesses is growing, which has an effect on their profitability.
- Critics claim that engaging in social responsibility goes against the whole purpose of businesses.