Environmental Scan of Toyota

Environmental Scanning

“Environmental scanning is the ability to scan your environment for ideas, reframing which is creative thinking, making common sense which is ensuring your followers understand the organizational environment and challenges, and system thinking which is seeing the big picture (Sanders, 1998).” Environmental influences can come from an external or internal source where data, trends, or ideas can influence an organization’s effectiveness. Factors which constitute the external environment are: Remote, Industry and Operating Environments (Pearce, J. & Robinson, R. (2005) p.78) . Toyota Corporation founded by Kiichiro Toyoda is living proof that they have been able to endure the “environment” by identifying the remote, industry and operating environments otherwise known as the external environment.

External Environmental Analysis

Toyota is the seventh largest company in the world and the second largest manufacturer of automaker, with production facilities in 28 nations around the world - and the highest-production facility of any non-domestic automaker in the United States (Vogel (2010Year)).

Remote Environment

An area of huge impact on Toyota’s external environment is that of the economy sustainability. When the economy changes, what processes does Toyota go through to sustain its business? The current economic crisis is making it difficult for the population to buy a luxury such as an automobile. How can Toyota make it affordable but still have a large profit margin? Additional economic factors are those of fluctuating currency and interest rates. Not only is the yen, euro, and U.S currency affected but Japan will need to figure out a way to overcome this fluctuation. Fluctuations in foreign currency exchange and interest rates will affect Toyota’s financial conditions. Toyota will need to learn how to read the market so that they will be able to strike for a more effective financial return.

Industry Environment

In this area, Toyota...