How Toyota Operates Its Philosophies between Japan and Thailand

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Asian Institute of Technology

School of Management

SM71.42 Cross-cultural Management

How does Toyota operate its philosophies between Japan and Thailand?


Tutor: Prof. Dr. Marie-Thérèse Claes

Group 1:

• Ms. Phung Viet Ha
• Ms. Nguyen Le Hang
• Mr. Vu Quang Linh
• Mr. Nguyen Van Ha
• Mr. Nguyen Trung Thuc

Date: September 7, 2012

Executive summary

In the 21 century, the world we inhabit is coming "flat" where many political, social economic and cultural barriers have been being discharged. The development of global organizations means that clients, suppliers and business may be located across a range of countries and regions. The number of interactions between people of different cultural backgrounds in the workplace is growing exponentially in companies of all sizes.

Understanding cultural differences and developing cross-cultural communication and coordination have become important than ever before for organizations. These skills help organizations to work more effectively across cultural barriers.

This paper examines the cross border coordination between Toyota and its subsidiaries in Thailand.

In this paper we will have a brief research about the intercultural problems of Toyota. How Toyota deals with cross-border business coordination problem to become the global No. 1 automaker in general and Thailand’s bestseller automobile in particular is analyzed on basic information and cross-culture management. The empirical case of Toyota in Thailand is selected to for study and lessons learnt as Thailand is the first country in the oversea expansion of Toyota’s manufacturing and where Toyota experienced good practices in coordination mechanism between mother Corporation and its regional and local subsidiaries.


1. Background on cross-cultural business coordination

Cross-cultural business coordination aims at dealing with the interaction of people from different backgrounds in the business world. Cross culture is a vital issue in international business, as the success of international trade depends upon the smooth interaction of employees from different cultures and regions. A growing number of companies are consequently devoting substantial resources toward training their employees to interact effectively with those of companies in other cultures in an effort to foment a positive cross-cultural experience.

Nowadays, firms, especially those from developed countries, increasingly expand their business overseas in the attempt of seeking for the competitive advantages of the new resources. This results in the more complex structure of multi-national corporations.

Transnational corporations see cross-cultural business coordination very important in order to have smooth operation and balance control between headquarters and its subsidiaries toward production efficiency improvement. In this connection, the differences in languages, values and other dimensions should be studied and based on that find the ways to harmonize those for better coordination.

Cross culture can be experienced by an employee who is transferred to a location in another country. The employee must learn the language and culture of those around him. This can be more difficult if this person is acting in a managerial capacity; someone in this position who cannot effectively communicate with or understand their employees' actions can lose their credibility. In an ever-expanding global economy, cross culture and adaptability will continue to be important factors in the business world.

2. Toyota and its philosophies

1. About Toyota

Toyota Motor Corporation was founded on August 28, 1937 by Sakichi Toyoda. After 70 years of manufacturing and developing, at the end of March 2012, Toyota...
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