An Effective Analytical Decision –Making in Multi-national

companies; A study of Toyota Motor Corporation

Dr Kennedy Amadi, Ph.D
The Great Lakes University of Kisumu
Department of Business.
DECISIONS AT DIFFERENT MANAGEMENT LEVELS
According to Chand, S. (n.d.), decision - making is a process in which choices are made on the
basis of other courses of action, on the basis of premises of fact and courage with the intention
of moving towards a desired situation. Once a decision is made, it involves a commitment of
resources. Managers make different decisions ranging from setting targets for the overall
organization to specific departmental activities. Managerial decisions are classified as strategic,
tactical and operational decisions.
1. Strategic decisions:
Strategic decisions are the major options that affect all or a significant portion of the business.
They contribute directly to the achievement of the company's common objectives. They have
long-term implications for the company. These decisions depend on environmental knowledge
that is partial, this is because the environment is unpredictable. These decisions are made by
the top level management. As highlighted by automotive World. (2018),The automaker’s long-
term strategy is an ambitious one, based on reducing the environmental impact of its products
and the way they are made; platform manufacturing, electrification, enlivened vehicle styling
and a new corporate structure will be some of the defining characteristics of Toyota’s strategy
over the next three decades and beyond. Strategic decisions make long-term decisions that
affect how the business progresses. For example, a firm makes a strategic decision to become
the leading manufacturer of products; in this case, the firm is likely to focus on manufacturing
consumer-oriented products. (Bhasin,2017). Increase in revenue is an important strategic
decision, according to Reuters. (2017),Toyota forecasts its group sales at over 10 million
vehicles with the latest projections including vehicles manufactured by Daihatsu motor
company and Hino Motors Ltd
2. Tactical decisions:
These decisions concern the implementation of strategic decisions. They aim to develop
division plans, structure work flows, establish distribution channels and acquire resources such
as people, materials and money. These decisions are made at the middle management level. In
the line of paint, an infinite flow of cars passes, and the robots paint them. Sometimes a human
- a worker must be able to replace a machine that stops. It is then that the similarity of the
movements is surprising. The Takaoka robots are not jerked, but are a perfect copy of the
workers ' gestures. "Improvement after improvement, we were able to optimize the robot's

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procedures and the amount of paint we use," says Kato. The man controls the work with the
naked eye. (White, 2014). Highly trained Takumi employees give Toyota the edge .

3. Operational decisions:
These decisions relate to the everyday operations of the company. They have a short-term
horizon because they are taken several times. These decisions are event-based and do not
require much business judgment. Operational decisions are made at lower levels of
management. Since information is required to assist the administrator in making sound and
informed decisions, information systems should focus on the administrative decision-making
process. As emphasized by Business Initiative Direction.(2013),Toyota Motor Corporation is
abled to enhance customer satisfaction and better product quality by focusing on the “Voice of
the customer”. For example they publish news on customer satisfaction to the public, in 1990
they made the customer Service Telephone line toll-free and they have Customer Month.
Recently, the most significant changes made at employees meetings have been in the service
staff and performance chart of Toyota’s technicians. These measures have been a standard for
generating gold communication for many years.
The recent changes that the adjustment of the year of the technical training of the ASE, weight
and Toyota they have been given, there is a major change to the formation of the own Toyota
while a decrease in the weight given to the ASE sector. Toyota Motor Corporation Brazilian
subsidiary intents to invest R$ 1 billion in its Sorocaba Plant in Sao Paulo, Brazil. There is
possibility of expansion hence the plan to employ over 250 employees. (Toyota Company,
2019). According to Mikoluk, K.(2013), the operational decision involves the decisions
concerning the day to day running of the organization. It makes it possible to implement the
tactical decisions within the right time frame it is in line with short term objectives. Toyota
Motor corporation operation level makes several decisions, that is ten important decisions to
ensure effective and efficient operations. Toyota company being a good example of successful
operations management globally, this is explained by Lombardo, J.(2017).

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ETHICAL ISSUES IN ANALYSIS AND COLLECTION OF DATA
Definition of Research Ethics.
According to Resnick, D.B. (2015), Ethics are, in general terms, the set of rules, written and
unwritten, that governs our expectations of our own behavior and that of others. Research
ethics is the set of ethics that governs how it conducts scientific research and other research
institutions, such as universities, and how it spreads.
Codes of Ethics. These are codes of conduct for research funded or commissioned by the
government agencies.
Honesty and Integrity
This involves reporting research honestly, and that this applies to the methods (what you have
done), data, results, and if you have already posted all this. Toyota’s experience encourages
forecasting approach when handling customer data by including the ability to introduce new
data easily and fast while ensuring privacy. As explained by Stevens, M.(2017),Toyota’s new
data platform is flexible to change therefore satisfying customers ever changing needs.
Objectivity.
According to Resnick, D.B.(2015),this involves avoiding biasness while carrying out research.
This is why Toyotas customers can easily access their information while using apps for example.
Carefulness.
This means avoiding carelessness while carrying out research thereby ensuring credibility of
results. Research records should also be kept. As explained by Stevens, M.(2017),before
designing its new data platform ,Toyota relied on its retailers or distributors to manage
customer communication, this lead to inefficiencies in its marketing and sales practices.
Customer’s names were represented differently across two or more systems
Openness.
According to Resnick ,D.B.(2015),it’s important to share the data and results together with the
tools developed, one should also be open to criticisms. Investigators in the United states
discovered that Toyotas internal documents had problems because the public statement
splayed down the problems, this lead to a criminal penalty of $1.2 billion.( Vlasic, et al .2014).
Respect for Intellectual Property.
This involves not plagiarizing or copying work belonging to other people and claiming that it’s
your own. To meet the ever changing customer needs by providing high quality and affordable
products, Toyota does research and development. According to Toyota company.(2012),it
maximizes corporate value because it knows that the intellectual property from research and
development, this is why it has structures in place to support organized collaboration between
intellectual property activities and research and development. According to Prasad, J. (2018),
there are ethical issues involved while collecting and analyzing secondary data which should be
well understood by the organization.

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SECONDARY DATA ANALYSIS
Secondary analysis refers to the use of research data to find the answer to a question that was
different from the original work. While the fundamental ethical issues related to the secondary
use of research data remain the same, they have become more pressing with new technologies.
Data sharing, compilation and storage have become much faster and easier. At the same time,
there are new concerns about data privacy and security.
Issues in Secondary data analysis
Concerns about secondary use of data relate primarily to potential harm to individuals and the
issue of return for consent. Secondary data vary depending on the amount of identifying
information it contains. This is explained by Prasad , J.(2018),that, If the data do not have
identifying information or are completely lacking such information, or if the data are
appropriately coded so that the researcher does not have access to the codes, there is no need
for the Ethics Committee to review the data thoroughly. More should be retained than is
necessary for that purpose.
It must be protected against unauthorized access, accidental loss or destruction. Hard copy
data should be stored in locked cabinets while soft copies should be stored as encrypted files
on computers. It is the responsibility of the researcher performing the secondary analysis to
ensure that the subsequent analysis of the data performed is appropriate. Statement of Ethical
Practice for the British Sociological Association .(2004).
Issues in Secondary analysis of Qualitative data.
In qualitative research, the culture of archiving data is absent, Archiving Qualitative data
(2009). It is also a matter of concern that the data file gave rise to personal opinions of the
subject. However, the best practice is to provide for anonymity at the time of the initial
transcription. The use of replacement pseudonyms can declare the subject's identity. According
to Global Toyota.(2019),Customers visiting Toyota’s websites have the possibility to provide it
with their personal data. In addition, or automatically they collect certain information about the
customer. The specific categories of personal data in question and the sources from which it’s
explained as follows;
 Personal Data Given by Customers.
Toyota’s website enables the customer to participate in its offers, making or correcting the
bookings for its services such as Toyota Rent-a-car, contact the company by phone or email or
social media interaction. The Personal Data thereby collected includes identification data,
personal characteristics, and contact information among others.
 Personal Data Collected Automatically
Toyota Company uses automatic data collection techniques to collect customer’s data about
the device, browsing pattern. For example the IP address, operating system, location, date,
time of access and web pages visited prior. According to Kiguolis,L.(2019),the servers of Toyota

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were hacked in their Toyota and Lexus subsidiaries thus exposing the customers data such as
their names and their credit card information .Investigations is ongoing as Toyota gives priority
to customers safety .The customers data remains at risk.

Statistical Techniques Used to analyze complex Data

According to Toyota Research Institute.(2019), its applied research is focused on new use of
Intelligence Amplification (IA)which enables employees and machines to work together to

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achieve greater output by not replacing the staff’s ability. The technical purpose of Machine
Assisted Cognition (MAC) is to produce better quality,quick decision making and scale to
leverage the size of available data or decision making group.
Analyzing Quantitative
Data According to Liberty,D.(2019),Methods for Quantitative analysis are based on the ability to
count and accurately interpret data based on concrete facts. Our first three methods to
increase your analysis set will focus on data that is quantitative in nature:
 Regression analysis
This tool is effective when forecasting future trends and making predictions. It is used to
measure the how dependent and independent variables are related. One dependent
variable can have many independent variables.
 Hypothesis testing
Also known as"T- testing, this method of analysis allows you to compare the data you
have with hypothesis and assumptions you have made about your operations. It also
helps you predict how decisions you might make will affect your organization. T-tests
compare two variables to find a correlation and to base decisions on the results.
 Monte Carlo simulation
Because it is one of the most popular ways to eliminate unpredictable variables on a
particular factor, Monte Carlo simulations use probability modeling to help predict risk
and uncertainty. To Test a hypothesis a Monte Carlo simulation will use random
numbers and data staged a variety of possible results to amount what situation based
on amount than result .
Measuring Qualitative
Data Qualitative information requires moving away from pure statistics and moving towards
more subjective approaches. However, you can always extract useful data using different data
analysis techniques based on your requests. Our last two techniques focus on qualitative data:
 Content analysis
This approach allows us to understand the general issues that emerge from the
qualitative data. The use of techniques such as color coding of specific themes and ideas
helps to develop textual data to find the most common threads.
 Narrative analysis
This type of analysis focuses on how stories and ideas communicate within a company
and can help you better understand the corporate culture. This could include
interpreting what employees think of their work, how clients perceive an organization,
and the appearance of business processes. It can important when changing the
corporate culture or planning new marketing strategies.
 Regression Analysis of Toyota Company.

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 This study on Multiple regression analysis of factors that affect the reselling price of
Toyota cars in Colombia ,has explored the hypothesis that the predisposing and
favourable factors for resale prices of used Toyota cars in the District of Colombo, Sri
Lanka. The study was a cross sectional study of a representative sample of used Toyota
cars in urban areas of the District of Colombo.

The objective was useful to give a clear idea of the fact that the Toyota car was a major
or minor problem in the Colombo District of Sri Lanka and what were the reasons for
the maximum or minimum market share or demand of the Toyota car sellers in the
Colombo District of Sri Lanka. Sabaranuwa,N.(2016),the main factors affecting the
resale price of a car of these people in terms of magnitude were the car model, the
color of the car, the age of the car and the mileage. Primary data was collected and
random study was done on 55 used cars to be resold. The sample survey data was
presented that is a used car of low resale price is related to the high age of cars,
therefore there is a very strong linear relationship between the age of the car and its
resale price.
 Toyota hypothesis Test
According to Toyota's website, the average mileage per gallon for the 2013 Toyota Prius
is between 48 miles per gallon to 51 miles per gallon. This was to prove the claim that
the average of miles per gallon for all 2013 Toyota Prius is, in the worst case possible,
greater than 48 miles per gallon, and hypothesis test was performed at the significance
level of 0.05.
Data was collected from the Toyota Prius average of miles per gallon, the result of data
collected from Fuelly car owners who reported on average miles per gallon used by
their cars gave the data results.(Wyzant,2015). Next the test statistics is calculated.
Based on the calculation in Microsoft Excel, the average of the sample of miles per
gallon of the 95 Toyota Prius reported is 47,947, and the standard deviation of the
sample is 4,328. The sample size is 95, so the degree of freedom of the test is 94. The
test statistics are -0.119.

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 SCENARIO PLANNING DECISION MAKING
According to CGMA TOOL(n.d.),Simply put, scenario planning provides organizations with a structured
method to assess the different perspectives of what might happen in the future as an aid to strategic,
operational and financial planning. A scenario is a coherent set of assumptions that describes a vision of
the future that is then used to develop forecasts or a rapid test, plan or decision. Scenario planning
focuses primarily on answering two questions:
 What could happen?
 What would be the impact?
The scenario planning is a way for leaders to visualize the future and assess how they will react in
different circumstances. As flexibility and responsiveness have become the most valued abilities,
scenario planning has become an integral part of the overall planning and Risk Management Process for
many companies.

Balance Scorecard for Decision Making

In the 90s, David Kaplan and Robert Norton of Harvard University developed a system called balanced
scorecard to help companies make better decisions. most of the management systems that have
prioritized financial figures, this system has taken into account other important perspectives such as
how a client views the business, operational readiness and a culture of learning and knowledge.
(Ong,2015).
Toyota’s Scenario Planning Using Balanced Score Card.
According to Apex. (2014), Toyota applied balanced scorecard to be the most successful and respected
car company in America. The goal involves offering high quality products and services in order to attract
and retain customers. The company’s management also developed corporate scorecards to establish
how success will be achieved Balanced scorecard has been used by many companies to fine tune their
strategy implementation. At its most basic, a balanced scorecard looks like this: Before implementing
the balanced score card model, the organization needs to ensure the following is in place:
 Top level business goals: this involves understanding the organizations understanding its
business goals at the top level such as increasing sales
 Specific value to customers: this involves understanding the customer’s value by meeting the
business goals this is because lack of customers values no achievement of goals.
 Appropriate strategy: a strategy that is understood by stakeholders is needed to address the
above two aspects.
 Building business systems: this involves the business system to transform strategies into
objectives.
 Setting KPIs: the Key Performance Indicators is used as a reference point; therefore the
organization must choose the right KPIs.
Balanced Scorecard Perspectives.
Once the above steps are completed, the organization can create the balanced scorecard by using the
following perspectives:
I. Financial: It is to increase value to shareholders and improve the end result, usually by reducing
costs and increasing revenues. For for-profit organizations, everything the organization does

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 should help improve financial figures. Toyota Company’s purpose is to ensure disclosure of
information in an appropriate way and ensuring proper communication with shareholders and
investors. In this way, Toyota increases the transparency of Management in order to obtain an
adequate valuation of the company in the securities markets. In addition, Toyota conducts
various investor relations activities to facilitate good communication with shareholders and
investors. There are many variables that could shape the future making it difficult to construct a
single scenario upon which decisions can be made.
II. Customer: This perspective involves how the customers perceive the Company. It enables the
company to understand the nature of their customers and their value proposition. (Ong, 2015).
Monozukuri (manufacturing) is an industry practice used by Toyota for fast response to dynamic
customer’s needs. (Toyota Industries, 2019). According to the founder Sakichi Toyoda, Toyota
Industries firmly believes that quality is the soul of a company. Focusing on quality above all and
ensuring customer safety and reassurance as its most important responsibilities to its customers
and form the basis of the CSR approach Toyota Industries is committed to maintaining and
improving the overall quality of its business operations, which includes product, marketing and
management quality. Under its "Customer First" philosophy, Toyota Industries meets its
customers’ needs through product development this is achieved by meeting market needs. At
Toyota Industries, the development of a new product involves the definition of specific
objectives aimed at integrating quality at all stages, from product planning and design to the
preparation of production, production, sales and after-sales services.
III. Internal Business Process: This involves ensuring that systems and process within Toyota
Company are in place in order to meet financial and customer objectives. The Toyota production
System (TPS) is a management philosophy and strategy from the point of view of lean
production. It is people-oriented because it respects the fact that it is people who run the
system. The fundamental of TPS is respect for team work. The effective use of a member's
employee's time and the promotion of the contributions of the lean process improvement by
the employees are very vital elements. Under the TPS, each action of a team member must add
value to the production process and contribute to increasing total control. Communication and
visual management are at the heart of the TPS. (Toyota Company, 2010).
IV. Learning and Growth: No rapid growth can be formulated or implemented without the
contribution of qualified and experienced staff. This perspective helps the administration
develop a learning culture that simplifies goal setting and implementation. As explained by
Toyota UK (n.d.), In Toyota Company, for improve performance of the company and continuous
employee development training has to be done. For example, on the job development is used to
support staff to learn their own jobs until they become experts. Employees are directly involved
in the management of Toyota Production System.

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