Toyota in the UK: applying corporate philosophy to a social agenda

April 01, 2000

Visit Toyota, and you will inevitably find yourself talking about the company’s philosophies. They resonate throughout its operations far more naturally than most company principles.

Toyota has seven principles and a philosophy for every stakeholder. To ensure total quality, every manufacturing employee has the right to stop the production line, which produces a car about every 100 seconds, if necessary. Toyota’s belief is that if you value and respect employees – called ‘members’ – they will better understand and share the company’s objectives. So when the company talks about stable employment and the opportunity for members to develop their full potential, it is because these things help secure long term prosperity for the company, and everyone should share in that success.

On corporate citizenship, Toyota says it will “build and maintain good relationships with local people and businesses, and contribute to the prosperity of the area by creating a successful company and being a good neighbour”. There is also a strong emphasis on the environment – minimising the impact of Toyota vehicles and their manufacture.

The important point is that Toyota sees its value to society as much in terms of production, procurement, investment and employment policies as specific social contributions. The company aims for this to be the foundation of its community programme. Its practice is evolving as the company comes of age in the UK.

Toyota the company

First some background about Toyota . Toyota Manufacturing Corporation was established in Japan in 1937. It now has 55 plants in 25 countries and 160,000 employees. It produces more than 5 million vehicles each year, which it markets in 160 countries.

In the UK, the company has two manufacturing plants, called Toyota Manufacturing (UK) Ltd; both started production in 1992. The plant in Derbyshire makes the Avensis and the Corolla saloon. It employs 2,812 people, and made 179,000 cars in 1999 with capacity to build up to 220,000. The engine manufacturing plant in Deeside, North Wales employs 284 people and had a production volume of 105,000 in 1999. In addition to Toyota Manufacturing, there is a distribution and marketing company based at Redhill, Surrey, which employs 486 people and manages a network of some 270 UK Toyota dealers. The company also has a small London office.

The decision to build a manufacturing operation in the UK was taken in 1989 – 23 years after the first Toyota car was sold in Britain. Toyota quickly established a Community Liaison Committee. The company’s guiding principle was to be open, honest, inform in advance, listen to concerns and try to minimise each impact. Early measures included planting more than 350,000 trees and shrubs and growing crops on land around the factory; painting walls to blend with the landscape; systems to handle water discharge and emissions.

Mairi Clifford, who co-ordinates Toyota Manufacturing’s UK community programme from Burnaston joined at that time and describes how Toyota maintained regular contact and involved local people in landmark events: “We wanted to build long term relationships with local people and earn their trust, it’s part of our philosophy … nowadays if they have concerns, they’ll just pick up the phone to talk, knowing that we will listen – which is how it should be.”

The company had to manage expectations of a large community spend, given that Toyota Manufacturing was separate from its Japanese parent, Toyota Motor Corporation and did not yet have a product. Once production started in 1992, the company set up a Social Contributions Committee, which still involves managers from all divisions in allocating funds. Mairi, together with fellow public affairs specialists from Burnaston and Deeside, was charged with maintaining close contact with local communities and recommending ways to maximise effectiveness in the company’s relationships with them. Mairi reports to the Toyota Manufacturing PR manager, who in turn reports to the UK Board-level Corporate Affairs Director.

To guide the programme, the company’s priority was to understand what people in and outside the company thought were the most important issues for Toyota to respond to. Consultations in 1996 drew on public attitude research, discussions with opinion-formers, comparisons with Toyota US, Australia and Canada, and market research among local people and employees.

Three themes emerged for the company to address: health, education and children , partly reflecting a young, family oriented workforce – the average age at Burnaston is 31. Most people felt strongly that support should be local to the manufacturing plants.

Flagship programmes

In January 1999 Toyota launched a national, three-year programme, S’Cool to be Safe’, which combines the three themes through a focus on safety education for children, accidents being the number one cause of child deaths in the UK.

Toyota selected the Royal Society for the Prevention of Accidents (RoSPA), one of the world’s leading safety organisations, as a partner to contribute research and safety expertise, and a theatre company to weave safety messages into a form children would remember. The programme targets 7-11 year-olds, the most vulnerable age-group, and reached 7,000 children in 1999, aiming for the same number this year. This will be leveraged by providing each teacher with audio materials and a resource pack for future classes. Toyota’s manufacturing and marketing companies are together investing £100,000 each year for the initial three years. Toyota’s PR team also targets regional media to raise awareness and understanding of child safety issues as part of the programme.

The two Toyota Manufacturing sites together invest a further £100,000 each year, some 80% of which are channelled into health, education or children’s causes, with 20% retained to allow the company to respond to requests. Generally about 66% of these requests come from within 20 miles of each plant, with a further 20% in the region and the rest from national or international causes. The company runs educational tours for schools, colleges, universities and local businesses, and donates cars to charities and to schools for technology and engineering courses.

This brings the total UK community contribution to about £225,000 a year, based on cash figures only. Until 1998, the Japanese parent company, Toyota Motor Corporation, made an additional contribution through a Science & Technology Fund, set up in 1992 to support science and technology careers and training in schools through teacher placements in industry. £1.2 million was invested during those six years. The company’s view is that now the UK manufacturing operation is well-established, it should manage all community contributions.

The other major international theme for Toyota remains the environment. Initiatives include reforestation projects, and partnerships with national conservation NGOs. The UK company works with the National Trust on education and training materials for teachers and students near the Toyota plants, for example.

Toyota produces an impressive worldwide report on its automotive eco-technologies called ‘Car(e) for the Earth.’ The report describes measures to minimise CO2 emissions, develop cleaner engine technologies and alternative energy systems, and recycle products. Particularly interesting is Toyota’s ‘5R’ waste-reduction programme – Refine, Reduce, Reuse, Recycle and Retrieve. About 30,000 tons of waste materials are converted into electricity and steam at Toyota’s Environment Center, saving some 25,000 tons of coal each year. The report also summarises far-reaching policy work on future transport systems.

Future challenges – using core business competencies

A key challenge for Toyota UK is to use its core competencies to make a more strategic impact on social issues. This flows naturally from the philosophy that the company will contribute most to stakeholders by doing what it does best – building cars very well and focusing on the customer. Mairi is enthusiastic- “we are looking at how to use the expertise we already have to contribute more effectively”.

When Toyota hosted a regional conference for the Derbyshire Downs Syndrome Association last year, it put much more emphasis on in-kind support – facilities, equipment, event planning, and help in communicating key messages to the media. The NGO’s verdict? “We could never have achieved so much alone.”

In March, Toyota co-organised a workshop for 60 primary school head teachers, working with the local Education Business Partnership. All places were filled on the first day the course was advertised. Toyota’s contribution, apart from the location, was business skills training – planning, target setting, and continuous improvement, based on the company’s ‘kaizen’ philosophy – ‘finding a better way’.

Involving employees

Underpinning a more strategic contribution is employee involvement. Toyota has for some time matched employee donations to charities – the scheme allows the company to match funding £ for £ up to a ceiling of £250, and for employees to make special requests for additional support.

Community relations is now working with Toyota’s human resources division on a joint ‘member involvement’ project, including community participation in paid company time as an aspect of personal development. Again this fits naturally with the company’s philosophy on developing employee potential.

Business benefit

Until now Toyota has put more emphasis on community benefit than business benefit in its programmes – surprisingly so, given its strong belief in mutual company-stakeholder benefit – and has not yet sought a link between community and brand marketing. It could usefully look at both these areas.

The company is developing its approach here: measurement is now on the agenda as part of a move to quantify and then improve the programme’s impact on society, the company and its members.

A natural follow-on would be to communicate more externally about Toyota’s social impacts – already on the ‘to do’ list. The company naturally expresses this in the broadest sense – employment, the supply chain and so on – and should build on this. It is already a leader on environmental issues. It could lead on social issues in the UK if these trends continue.

Corporate Citizenship Briefing, issue no: 51 – April, 2000