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Toyota Company Performance Analysis
Introduction
Toyota Company is one of the known Japanese automotive producer that has its headquarter in Karachi, Japan. The company consists of more than 500,000 employees worldwide as indicated its website in January 2014. It was also ranked as the 14th largest company in the world in-terms of revenue. In 2012, the company was rated as the world’s largest automobile manufacturer by production. In July, the same year the company reported a production of 300 million vehicles (Cole 30).
How to determine the best Performance Measure of the company
Based on the above information about the company, it was worth for the corporate financial department of the organization to determine the performance of the company. The most crucial steps that the company has been experiencing is to determine the best framework to use for the analysis. For this case, Toyota has been using various measures but one of the most dominant one is the use of both financial and non-financial performance measure among other tools such as the use of the responsibility reports. The company being one of the largest in the world it used different protocols to determine the above performance tools: the department employees Job satisfaction rate, the efficiency of the employee in the company, the growth of the company, and the profitability of the company in the last 2 years were among the foundations used to determine the performance tools.
Decentralize and use responsibility accounting
One of the tools that Toyota uses to determine the performance of all the employees especially in the corporate finance department is the use of responsibility accounting and decentralization of business roles in the company. Toyota uses this tool to determine the performance of the employees because, the system creates a definite plan for each segment of the department hence able to allocate staff, resource as well as evaluate the effectiveness and efficiency. Responsibility accounting also improves the motivation of employees who on return improve their level of performance (Liker, Jeffrey and Hoseus 40). This is because responsibilities are properly directed to qualified individuals. This feature of the responsibility accounting helps evaluate the performance of employees easily because roles are specifically assigned hence easy to evaluate.
Performance evaluation systems and how the balanced score card assists companies to evaluate performance
Toyota’s corporate financial department uses performance evaluation systems to determine individual performance. The system work hand -in- hand balance scorecards to helps the company to evaluate the performance of the department and at large the entire company. Moreover, the scorecard helps the Toyota to provide the management with true picture of the business operational and offers immediate strategic information to the stakeholders and the employees in the department.
Functions of Responsibility Report in reporting cost, revenue and profit centers
Responsibility reports are comparison analysis that Toyota uses to compare itself with other companies. It helps the company compare its production costs, revenue, and profits annually with its competitors (Micheline 12).
Evaluation of the contribution of financial and non-financial performance measures
For example, this paper uses growth ratio as a non-financial performance measure used to evaluate the performance of the company. According to the ratio of growth, it indicates that the company has a steady growth over the years. In addition, the income statement has been used to depict the performance of the company in terms of monetary performance. The monetary performance according to the statement Is that the company is performing excellently. This has been indicated in the appendix
Conclusion
Thus, both the non-financial and financial performance measure used have been important in evaluating the performance of the Toyota Company. However, the company should consider employing more performance tools.
Works Cited
Cole, Robert E. “What really happened to Toyota.” MIT Sloan Management Review 52.4 (2011): 29-35.
Liker, Jeffrey K., and Michael Hoseus. “Human resource development in Toyota culture.” International Journal of Human Resources Development and Management 10.1 (2010): 34-50.
Maynard, Micheline. “Toyota will offer a plug-in hybrid by 2010.” New York Times, nytimes. com (January 14, 2008) (2008).
Appendix
Income Statement of Toyota Company
Income
Growth Ratio