HR Study of Automobile

Sector

Best and worst automobile companies

TOYOTA NISSAN
Report 2021

REPORT ON BEST AND WORST COMPANIES IN AUTOMOTIVE

SECTOR

SUBMITTED TO:

MA’AM FAYYZA JALEEL

___________________________________________________________________
DEPARTMENT OF MANAGEMENT SCIENCES
LAHORE GARRISON UNIVERSITY

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TABLE OF CONTENTS

 Task distribution sheet : 03

 Acknowledgement : 04

 Dedication : 05

 Executive summary : 06

 Chapter 1 : 07

 Chapter 2 : 10

 Chapter 3 : 23

 Chapter 4 : 32

 Chapter 5 : 45

 Chapter 6 : 47

 References : 49

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ACKNOWLEDGEMENT

In the name of Allah, the Most Gracious and the Most Merciful.

All praises to Allah and His blessings for the completion of this project. We thank Allah
Almighty for all the opportunities, trials and strength that have been showered on us to finish
this project. Our humblest gratitude to the Holy Prophet Muhammad (Peace be upon him)
whose way of life has been a continuous guidance for us.

First and foremost, we would like to sincerely Thank You Ma’am Fayyaza Jaleel for your
guidance, understanding, patience and most importantly you have provided positive
encouragement and a warm spirit for this project. It has been a great pleasure and honor to
have you as our teacher.

May God shower the above cited personalities with success and honor in their life.

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DEDICATION

We dedicate this project to Allah Almighty our creator, our strong pillar, our source of
inspiration, wisdom, knowledge and understanding. He has been the source of our strength
throughout this project. We also dedicate this work to ALL THE TEACHERS who have
encouraged us all the way and whose encouragement has made sure that we give it all it takes
to finish that which we have started. A very special thank you for providing us moral &
educational support. And also for the myriad of ways in which, you have actively supported
us in our determination to find and realize our potential, and to make this contribution to the
world.

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EXECUTIVE SUMMARY

In the light of below discussion it can be seen that if the engineering sector is the bedrock of
growth of economies, it is accepted that the automotive sector is at the forefront of growth.
This report encloses all the facts related to companies of automotive sector. The report takes
example of Toyota Motor Corporation and Ghandhara Nissan, to compare their departments
and analyze their market shares. The report mainly focuses on HR department of companies.
Because today human resource has become the main competitive advantage for a firm,
making it a very critical resource. More so than ever, there is a need for fulfilling all six
functions (staffing, performance management, compensation benefits, performance appraisal,
safety and health, employer and labor relations) related to human resource with strategic
purpose and technology should be able to help in aligning them with the firm’s
objectives. In this report we have tried to understand the conditions faced during the
implementation of HR at Toyota and Nissan. This report enlightens us with the detailed
information about companies, their departments especially HR enclosed with their problems,
recommendations and their implementation in organizations. The fact can be seen that in
spite of severe competition in the automobile industry and in spite of many downfall of the
industry the Toyota Motor Corporation has been able to make its mark on globe. On the hand
this report highlights the facts of Ghandhara Nissan which produced an extensive range of
mainstream cars and trucks, initially for domestic consumption but exported around the world
but major weakness is its name being associated with negative publicity due to high number
of recalls. Based on the SWOT analysis we observed that Toyota has a bright future.
Operating under monopolistic competition, it is clear that Toyota will continue to
differentiate and come out on top of their competition time and time again. While Nissan
automakers need to constantly improve technologically designs and economic vehicles that
cater to consumers in both mature and emerging markets in order to remain competitive.

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CHAPTER 01

1: HISTORY OF AUTOMOTIVE INDUSTRY IN PAKISTAN

The first car ran on the roads of South Asia in 1897, and until the 1930s, cars were imported
directly, but in very small numbers. They were used largely by the rich or the senior most
civil servants belonging to the elitist Indian Civil Service. This changed just after the start of
the Second World War. In 1945 the brothers Mahindra began assembling the Jeep CJ-3A
utility vehicles under license from Willis and soon branched out into the manufacture of light
commercial vehicles (LCVs) and agricultural tractors.
In Pakistan the history can be divided into several periods.A detailed chronological listing of
the history of the industry is given below:

1.1: Phase 1 (1947 to 1972)

In the post independent years the first automobile plant was set up in May 1949 by the
General Motors & Sales Co. this plant started on an experimental basis and grew rapidly into
an assembly plant for the Bedford trucks and Vauxhall cars. After witnessing this rapid
growth the other three leading automobile firms in the United States collaborated with
Pakistani entrepreneurs.
 1955: Ali Automobiles assembled Ford products;
 1956: Haroon Industries assembled Chrysler’s Dodge cars;
 1962: Kandawalla Industries assembled American Motor products.
 1963: Hyesons established the Mack Trucks plant..
 1966: General Motors plant was sold to Ghandhara Industries Limited and it was
granted permission to undertake the progressive manufacture of Bedford trucks and
buses.

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In the absence of organised components' manufacturing facilities, the lack of technological

know-how and without proper ancillary facilities for the design and development of tools,
jigs and fixtures slowed down the process of localisation.

1.2: Phase 2 (The Post Nationalization Period from 1972)

All industries including the automobile units were nationalised through the Economic Reform
Order of 1972. The units were renamed and their functions were redefined. A Board of 4
Industrial Management was constituted to formulate national policy for industrialisation and
also to oversee and coordinate the functions of the newly-nationalised units. This was a huge
task and to deal with it various corporations were established to look after each major
industrial sector, such as, automobiles, cement, fertilisers and engineering. But the steps
taken to formulate this policy lacked the required commitment as the corporations appeared
to show that the public sector could only run the industries if it earned high profits.

1.3: Phase 3 (Manufacturing of Tractors and the entrance of the Private Sector)
It was realised in the 80s that it was absolutely necessary for the integration of the public and
private sectors to get to the national objective of developments. The Awami Autos was
renamed the Pak-Suzuki Motor Company Ltd, to commence the progressive manufacture of
Suzuki vehicles, including the 800cc passenger cars. The manufacturing of Fiat was assigned
to the new joint venture of company, the Al-Ghazi Tractors Ltd, under the management of the
Habib Group Republic motors Co. It became a joint venture under private sector
management. Another plant by the name Ghandhara-Nissan was sanctioned to undertake the
progressive manufacture of trucks..

1.4: Phase 4 (Establishment of the private sector automobile assembly plants and the
vendor industry)
The need for another car manufacturer was felt in the mid-eighties. But sanction wasn’t
granted till 1989 because the Government was unable to take a firm decision. The sanction
was granted to the House of Habib and Toyota Motor Corporation of Japan to set up a
progressively modern plant to manufacture the best sellers of Toyota like the Corolla
passenger cars and other such popular vehicles. During this phase the vendor Industry
established its very first assembly plant. The first Autoparts manufacturing unit was
established in Lahore on 1942 for the purpose of providing after sales service. From 1950 to
1970, the initial focus of the industry was limited to tractors, buses and auto parts as well as
to provide to the needs of the after sales market of different automobiles..

1.5: Phase 5 (2000 to 2010)

The first decade of the new millennium saw the automobile industry in Pakistan growing
rapidly. However, in 2008-09 it experienced a major downfall, with sales dropping by 47
percent. This sudden fall in demand can be attributed to the on-going economic recession,
which saw high interest rates along with a sharp depreciation of the exchange rate. All this
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led to an increase in the prices of cars and the cost of components. During 2009-10, the
recovery in sales helped to increase the production from 99,307 units in 2008-09 to 141,654
units.

1.6: Phase 6 (2011 to present)

The market has been unstable in the year 2010-2014 period of time, registering a sharp fall in
2013, before embarking on a positive pathway in the following years. In 2017 the market was
sustained by robust internal demand, reaching 247.330 sales, followed by the current all-time
record in 2018 at 264.442. However, in 2019, the market has imploded due to a tax
introduction, making new car imports negligible. As a result, the Full-year ended at 192.814
units sold. After starting the year 2020 with a very negative trend, the market kept collapsing
in March as the virus struck. The sharpest drop in sales this year was in April when sales
declined. In the following months, the market recovered and started growing again in when
sales rose by 36.2%. For the rest of the year, double-digit growth was maintained, with the
biggest growth registered in November. In 2021 the market started the new year on a very
positive tone with 17.878 units sold, a 44.1% increase compared to the previous year, and it
remained positive in February, with 16.765 units sold.

Automotive brand ranking by Interbrand

Ranking (Automotive) Brand Brand Value (in US$ billions) Overall

ranking

1 Toyota 53.6 5

2 Mercedes-Benz 43.5 9

3 BMW 41.5 11

4 Honda 22.1 21

5 Ford 13 31

6 Hyundai 12.5 35

7 Audi 11.8 38

8 Volkswagen 11.4 40

9 Nissan 11.1 43

10 Porsche 9.5 50
Source: Interbrand

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CHAPTER 02

2: BEST AND WORST COMPANIES

BEST AUTOMOTIVE COMPANY

2.1: Toyota Motor Corporation:

2.1.1: History:
The Toyota Motor Corporation commonly known as Toyota is a Japanese multinational
automotive manufacturer headquartered in Toyota, Aichi, Japan. It was founded by Kiichiro
Toyoda and incorporated on August 28, 1937. It is operating as Toyota Indus as a
Pakistani automobile manufacturer which is a subsidiary of Japanese multinational
automaker Toyota. It is based in Karachi, Pakistan. It is a joint venture between certain
companies of House of Habib of Pakistan, Toyota Motor Corporation (TMC) and Toyota
Tsusho Corporation (TTC) of Japan the company engages in the design, manufacture,
assembly, and sale of passenger cars, minivans, commercial vehicles, and related parts and
accessories primarily in Japan, North America, Europe, and Asia. Current brands include
Toyota, Lexus, Daihatsu and Hino. In 2017, Toyota's corporate structure consisted of 364,445
employees worldwide and, as of December 2019, was the tenth-largest company in the world
by revenue. Toyota is the largest automobile manufacturer in the world followed by
Volkswagen, based on 2020 unit sales. Toyota was the world's first automobile manufacturer
to produce more than 10 million vehicles per year, which it has done since 2012, when it also
reported the production of its 200 millionth vehicle. As of July 2014, Toyota was the largest

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listed company in Japan by market capitalization (worth more than twice as much as number
2-ranked Softbank) and by revenue.

COMPANY NAME Toyota 

FOUNDED 1937

HEADQUARTERS Toyota City, Japan

SIC CODE 3711

STATUS Public

INDUSTRY SECTOR Automotive

EMPLOYEES 359,542

TRADING SYMBOL NYSE: TM, LSE: TYT, NAG: 7203, TYO:7203 

2.1.2: Vision of Toyota:

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Toyota’s Vision is to be the most respected and successful enterprise, delighting customers

with a wide range of products and solutions in the automobile industry with the best people
and the best technology".

 The most respected.

 The most successful.
 Delighting customers.
 Wide range of products.
 The best people.

2.1.3: Mission of Toyota:

Mission of Toyota is to provide safe & sound journey. Toyota is developing various new
technologies from the perspective of energy saving and diversifying energy sources.
Environment has been first and most important issue in priorities of Toyota and working
toward creating a prosperous society and clean world.

 “WE WORK PASSIONATELY AS A TEAM EMPLOYING LATEST TECHNOLOGY

TO DELIGHT AND SATISFY OUR CUSTOMERS WITH BEST POSSIBLE AFTER
SALES SERVICES”

2.1.4: Values of Toyota:

To be the market leader and satisfy the requirements of its customer, the Toyota Motors has
set certain objectives. These are:

 Improve Quality.
 Enhance Efficiency.
 Minimize Cost.
 Increase productivity

Over the previous years, the Toyota Company has put its best effort to the customers’ needs.
To improve their efficiency, the company gives importance to its Human Resource as the
company believes that satisfied and quality conscious team can be produced quality products.

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2.1.5: Competitors of Toyota:

Major names among its competitors include Ford, General Motors, Volkswagen, Suzuki,
Nissan, Honda, FCA (Fiat Chrysler Automobiles), BMW, Mercedes, Audi etc.

NAME FOUNDED HEADQUARTERS NO. OF EMPLOYEES

Ford 1903 Dearborn, Michigan, U.S. 190,000

Volkswagen 1937 Wolfsburg, Germany 304,000

Hyundai 2000 Seoul, South Korea 262,000

General Motors 1908 Detroit, Michigan, U.S. 164,000

Suzuki 1909 Shizouka, japan 68499

BMW 1916 Munich, Germany 133778

Nissan 1933 Nishi-ku, Yokohama, Japan 138,000

Mercedes 1926 Stuttgart, Germany 173000

2.1.6: Products of Toyota:

Products of Toyota include Automobiles, luxury vehicles, commercial vehicles, engines,
robots. Some of main products are shown below:

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2.1.7: SWOT analysis of Toyota:

Strengths:

 Strong market position and brand recognition: Toyota has a strong market position
in different geographies across the world. Such strong market position allows the
company to gain competitive advantage and also expand into international markets.
Toyota holds a portfolio of strong brands in the automotive industry. Thus, the
company's strong market position gives it significant competitive advantage and helps
it to register higher sales growth in domestic and international markets.
 Strong focus on R&D: Toyota has a strong focus on R&D to expand its product
portfolio and improve the functionality, quality; safety and environmental
compatibility of its products. The company's strong focus on R&D allows it to uphold
the technological leadership in most of its product segments. It also enables Toyota to
develop innovative products, leading to strong sales. 9
 Extensive production network: Toyota has an extensive production and distribution
network. Toyota and its affiliates produce automobiles and related parts and
components through more than 50 manufacturing companies in 27 countries and
regions besides Japan. During FY2012, the company produced 7,435,781 vehicles,
including 3,940,000 vehicles in Japan and 3,495,000 vehicles across all other
manufacturing locations.
 Distribution network: In addition, Toyota has an extensive distribution network.
While the company’s geographically well spread production base diversifies business

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risks, its extensive distribution network provides a wider reach, thus boosting
revenues.

Weaknesses:

 Product recalls could affect brand image: Toyota has conducted a number of
product recalls in the recent past, which could affect the brand image and overall sales
of the company. For instance, in 2011, Toyota recalled 111,000 models of Toyota and
Lexus brands’ vehicles due to the damage to elements of the substrate and potential
shutdown of the hybrid system. In addition, the company was involved in government
investigations related to product recalls.
 Declining sales in key geographic segments: Toyota witnessed a decline in its sales
in key geographic segments. In FY2012, the company witnessed declining sales
across North America, Asia, Europe and other geographic reasons, which together
accounted for 60.8% of the total revenues of the company.
 Poor allocation of resources as compared to peers: Toyota has low return on equity
(ROE) and return on assets (ROA) compared to its peer companies. The company's
competitors such as Honda Motor have more ROE when compared to Toyota. Honda
Motor's ROE was 4.8%,. In contrast, Toyota's ROE was 2.7% in FY2012.. Thus, poor
allocation of resources could hurt shareholder's value and confidence in the long term.

Opportunities:

 Growing global automotive industry: The global automotive industry was severely
affected by the economic downturn, with a decline in revenues being recorded in 2008
and 2009. However, 2011 saw a strong rebound which has continued into 2012.
According to Market Line, the global automotive manufacturing industry grew by
8.9% in 2012 to reach a value of $1,563.9 billion. The recovery of global automotive
industry thus provides Toyota an opportunity to gain more customers and increase
revenues.
 Benefits from growing partnerships: Toyota is poised to benefit from the growing
partnerships. In June 2012, BMW and Toyota signed a memorandum of
understanding aimed at long-term strategic collaboration on technological fields.
Also, in the short run, the combined partnership will result in significant synergies
and cost-savings, boosting the operational margins.
 Strong outlook for the global new car market: The global new cars market has
experienced moderate growth during 2008-2012. However, forecasts suggest this will
accelerate to strong double digit growth during the 2012-2016 periods. Thus, the
strong outlook for the global new car market coupled with the company’s new
product launches provides a growth opportunity for the company.

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Threats:

 Intense competition: The worldwide automotive market is highly competitive. The

factors impacting competition include product quality and features, the amount of
time required for innovation and development, pricing, reliability, safety, fuel
economy, customer service and financing terms. Motors has a big threat from their
competitors like Honda, Suzuki, In Pakistan because their prices are relatively low
than Toyota.
 Government policies and regulations: they can also be a biggest threat of Toyota
Motors. For instance, in February 2012, the National Highway Traffic Safety
Administration initiated a preliminary investigation of a potentially faulty power
window master switch in the driver-side doors in model year 2007 Camry and RAV4
vehicles. This could also result in significant penalties, which could affect the
operational margins
 Natural disasters could impact production structure: Toyota is subject to
disruption of production due to natural disasters such as earthquakes, floods, among
others. Toyota primarily operates in Japan which is a highest earthquake prone region
in the world. The country has witnessed many devastating earthquakes in the recent
years which seriously disrupted the economy.

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WORST AUTOMOTIVE COMPANY

2.2: Ghandhara Nissan:

2.2.1: History:
Ghandhara Nissan was incorporated in 1981 for the distribution of completely built-up
(CBU) Nissan vehicles in Pakistan. In 1992, it became a publicly listed company on
the Karachi Stock Exchange. Ghandhara Nissan has a technical assistance agreement
with Nissan Motors and a joint venture agreement with Nissan Diesel for the progressive
assembly of passenger vehicles, light commercial vehicles and heavy duty vehicles.
Ghandhara Nissan's manufacturing and assembly plant which has a capacity of 6,000 cars per
year, is located at Port Qasim, Karachi. Ghandhara Nissan forms one of several companies of
Bibojee Services. In 2016, Renault announced to start assembling cars in Pakistan by 2018 in
collaboration with Ghandhara Nissan but suspended further talks with Ghandhara Nissan and
collaborated with new partner Al-Futtaim Group of United Arab Emirates (UAE). But the
cars still would be assembled at a new assembly plant in Karachi and not in UAE. In March
2018, Nissan signed a manufacturing and licensing agreement with automotive partner
Ghandhara Nissan to begin local production of Datsun models. The agreement will create
more than 1800 jobs. The move is part of Nissan’s strategy to engage with emerging
automotive markets around the world, bringing brands and products tailored to meet rising
consumer demand. Sales of the first locally built vehicles are expected to begin in 2019 at
Ghandhara’s facilities in Karachi’s Port Qasim manufacturing facilities.

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COMPANY NAME Nissan 

FOUNDED 1933

HEADQUARTERS Yokohoma, Japan

SIC CODE 5511

STATUS Public

INDUSTRY SECTOR Automotive

EMPLOYEES 138,000

REVENUE $$90,886 million

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2.2.2: Mission of Nissan:

The mission statement of Nissan Motors is: 

“Nissan provides unique and innovative automotive products and services that deliver
superior measurable values to all stakeholders in alliance with Renault”.

2.2.3: Vision of Nissan:

The vision statement of Nissan Motors is:

“Nissan: Enriching People’s Lives. Nissan has a clear vision for the future, and − with our
Alliance partner, Renault − we are working with passion to achieve it. Our mission is to
enrich people’s lives, building trust with our employees, customers, dealers, partners,
shareholders and the world at large”.

2.2.4: Values of Nissan:

 Increase satisfaction and adoption of HR/Benefits programs while reducing costs.

 Help employees fully understand and leverage their total rewards.
 Improve employee communications and engagement

2.2.5: Competitors of Nissan:

Major names among Nissan's competitors include – Ford, General Motors, Toyota, Suzuki,
Volkswagen, Hyundai, Honda, FCA (Fiat Chrysler Automobiles), BMW & Mercedes.

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NAME FOUNDED HEADQUARTERS NO. OF EMPLOYEES

Ford 1903 Dearborn, Michigan, U.S. 190,000

Volkswagen 1937 Wolfsburg, Germany 304,000

Hyundai 2000 Seoul, South Korea 262,000

Suzuki 1909 Shizouka, Japan 68,499

BMW 1916 Munich, Germany 133,778

Toyota 1937 Toyota city, Japan 359,542

Mercedes 1926 Stuttgart, Germany 173,000

2.2.6: Products of Nissan

Nissan has produced an extensive range of mainstream cars and trucks, initially for domestic
consumption but exported around the world since the 1950s. It also produced several
memorable sports cars, including the Datsun Fair lady 1500, 1600 and 2000 Roadsters.

Nissan Infiniti Datsun

Heritage Motorsports Nissan crossing

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2.2.7: SWOT analysis of Nissan:

Strengths:

 Successful Renault-Nissan alliance: In 1999, Renault and Nissan have formed an

alliance, which is now the longest lasting automotive alliance to date. Renault holds a
43.4% stake in Nissan and Nissan holds a 15% stake in Renault. The alliance is
managed by a joint owned Renault-Nissan BV company, which makes sure that
companies pursue the strategies that benefit both Renault and Nissan. 
 Focused R&D spending resulting into the best-selling electric vehicle in the
world: Nissan has spent ¥531.9 billion of Japanese yen or US$4.42 billion for R&D
in 2015. While this is not the largest amount of money spent for R&D between the
automotive companies, it is very well focused by Nissan to a few areas, especially
electric vehicles
 Strong presence in the leading and emerging automotive markets: Nissan through
its alliance with Renault and various acquisitions have increased its market share in
the global automotive market. The company successfully competes in the U.S. and
grows its market share in China, Mexico, Russia, Brazil and other emerging markets.
 Technological innovation: It is the key to faster growth in the automobile industry.
The growth of digital technology, AI and changing lifestyles of customers around the
world also necessitate higher investment in research and development.
 Large Product portfolio: Nissan has a large product portfolio to cater to the varying
needs and lifestyles of different customer segments. From sedans to pick up-trucks,
SUVs and sports cars, the company has brought a large range of vehicles

Weaknesses:

 Poor marketing and advertising capabilities resulting in poor brand awareness:

Nissan could improve its marketing and advertising capabilities. The company has
spent ¥342.2 billion Japanese yen or US$2.85 billion for advertising in 2015. This is
more than what Hyundai, Honda or Audi has spent, yet, the company gained little or
no in brand presence for the money spent
 Massive product recalls: product recalls seriously damage the company’s brand and
sales in the country. In 2015, the company issued recalls for 930,000 Nissan Altima’s
models[4] and 768,000 various SUVs and crossovers models. 
 Management Issues: Following the arrest of Carolos Ghosn over a financial scandal,
the problems of Nissan have deepened. It has brought a large number of problems
with it including an internal investigation and reformation of the companies weak
corporate governance structure. Before his arrest in relation to the sea dal, Carlos
Ghosn was hailed as a hero in Japan.

Opportunities:

 Improving U.S. economy: Signs of an improving economy and rising consumer

confidence have been reflected in the strongest increase in new vehicle sales for more
than a decade in the U.S. market. 17.5 million new units were sold in 2015, a 5.7%
increase over 2014. Interest rates in the U.S.
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 Electrified cars: Around the world, the sales of electrical vehicles have grown fast in
the last three years. In the first two quarters of 2019, Tesla’s sales grew sharply.
Nissan also experienced a rise in sales of its electrical models. The auto industry
overall, saw reducing car sales in 2019 compared to the previous year. However, the
sales of electrical cars still jumped
 Timing and frequency of new model releases: The market share of the automotive
companies is significantly impacted by the timing and frequency of new model
releases. Historically, new models have tended to have major upgrades every 4 or 5
years with only minor modifications in between.

Threats:

 Changing industrial environment: Globally, the automotive industry has entered a

difficult phase in 2019. Nissan had experienced sales decline during 2018. In 2019
also, demand throughout the globe has decreased. Sales of electric cars have grown
worldwide but overall vehicle sales have reduced. Moreover, consumers’ taste and
demand patterns have changed. Demand for SUVs and hybrids has risen fast in recent
years. Nissan is dealing with a large number of internal problems
 Natural disasters: Nissan has manufacturing facilities in Japan, Thailand, China and
Indonesia. These countries, including others, are often subject to natural disasters that
disrupt manufacturing processes and result in lower production volumes and profits
 Low fuel prices could negatively impact Leaf sales: Currently, fuel prices are the
lowest in a decade. Such situation has encouraged consumers to buy big fuel-
inefficient vehicles such as SUVs and pickup trucks. The company has its own SUVs
and pickup truck lines, but suffers from the decreasing consumer demand for Nissan
Leaf cars
 Increased competition: Nissan’s international rivals, such as Toyota, Ford, General
Motors and Volkswagen, all have bigger budgets and higher brand recognition and
could easily expand in China, U.S. and Europe’s markets by taking the market share
from Nissan. New companies, such as Tesla with its electric cars is competing
directly against Nissan’s Leaf. 

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3: DEPARTMENTALIZATION
3.1: GHANDHARA NISSAN

3.1.1: Organogram:
The organizational hierarchy of Nissan is very concise and uncomplicated. This
structure consists of a Board of director who is principals of the CEOs and well-
defined line of authority.

Board of directors

Audit committee Chief executive HR committee

officer

Internal audit Company secretary

HR and Accounting and Information

Supply chain technology Sales department
administration finance
department department
department department

Marketing Production Corporate affairs Research and

department department department development

3.1.2: Department description:

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 Research and Development:

Innovation is hard won. It starts with a single vision. But to bring it to life, you need the
talents of a vast array of Research and Development (R&D), Design and Product Planning
experts who are passionate about achieving a positive final result. That's where you come in.

 Supply Chain:

Next-generation car Manufacturing, Production Engineering, and Supply Chain Management

(SCM) are all possible today at Nissan. Our professional team is ready to deliver on our goals
of enhancing quality and zero-emission leadership.

 Quality Assurance:

Total Customer Satisfaction (TCS). That's what we call our Quality Assurance at Nissan,
because we constantly strive to achieve total satisfaction for every Nissan customer.

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 Sales:

Imagine Sales Power that is able to inspire the tempo of a new product launch every six
weeks. That's Nissan's ambition. And we're nearly there. So you can imagine the need for
talented Sales & Parts/Services professionals has never been greater as we enhance quality
and increase our dealer network around the globe

 Finance and Accounting:

Driving greater efficiency and innovation at every level of our global business is our passion.
Finance & Accounting at Nissan are where this starts and finishes. Our Finance and
Accounting professionals' sound investments and smart strategic actions are propelling us
into the future of transportation, while ensuring accountability and integrity in everything we
do.

 Marketing:

No matter where your talents take you within Marketing & Communications at Nissan, you'll
be assured of two things: constant change and cross-functional growth. Nissan sells vehicles
and products under three brand names: Nissan, Infiniti, and Datsun. And with our alliance
with Renault, we collaborate with Renault, Dacia, Daimler and Samsung as well.

 Human Resource:

Nissan's success can only be as strong as the team of people who live and breathe its mission.
Supporting over 160,000 employees doing business in over 191 countries and territories, our
Human Resources group ensures the well-being, dedication, and high level of talent that
allow us to make a positive impact on the world.

 Information Technology:

The innovative cars of tomorrow will deliver incredible performance and protect the
environment. They may even virtually drive themselves. With our Information Systems /

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Information Technology (IS / IT) careers at Nissan, these innovations are starting today with
zero emission vehicles and EV models like the Nissan LEAF.

 Corporate Affairs:

Nissan's Legal and Corporate Affairs offer a vast array of opportunities to ensure our
business runs like a finely tuned engine. From our Intellectual Property and Corporate
Planning positions to our V-Up (Six-Sigma) and External Affairs roles, these professionals
serve as the ultimate guides to our automotive universe.

3.2: TOYOTA MOTOR CORPORATION:

3.2.1: Organogram:
The organogram of Toyota has been described here with its departments and sub
departments

Executives

General affair department General affair section

Government related affiars

Building maintenance

Purchasing section

Personnel section

Sales department
Vehicle delivery section

Advertising section

Sales promoting section

Sales general affairs

Service section

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Manufacturing department Material section

Raw material receiving section

Material store section

Wage calculation section

Plant personnel section

Human Resource department Recruitment

Compensation

Industrial relationships

Health and safety

Development

Performance management

Engineering design department

Design Chassis sub section
section 1
Engine sub section

Body sub section

Design
Chassis sub section
section 2

Engine sub section

Body sub section

Total vehicle engineering

Audit section
Administration department

Improvement section
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Research and development

Body research section

Engine research section

Accounting and Finance

Budget and costing
department

Taxation

Marketing department
Advertising section

Survey section

Sales promoting section

Information technology
department

Quality assurance department

Product development and

commercial

3.2.2: Department description:

 Accounting and Finance:

Toyota's financial services focus primarily on sales financing, which serves as a tool to
promote car sales. At the same time, we are working in new business areas to realize a better
future mobility society. The basic role of the financial services business is to enable more
customers to use our cars. We do our utmost to fulfill that role by promoting digitization,
developing and offering new financial products, and expanding our network to countries
where the automotive market is growing.
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1. Budget and Costing: Looks after all departmental and project budget including
investment made by the company.
2. Taxation: Making payments to the required vendors and various tax calculations.

 Human resources:

Human resources management in Toyota is an organizational function that personnel and

operates a unit. These workforce deals with problems related to individuals within the
organization. They make programs to select the best, develop and retain talent and set up a
system for employee benefits, payroll administration and daily operation. For manufacturing
companies due to the comparatively complex organizations and the processes connecting to
levels of employees, this HR department can play a more interactive part in hiring the correct
talent, taking care about the workplace needs, hearing the voice of employees, promoting
teamwork and mediating conflicts that would maximize efficiency, productivity and
competitiveness.HR department is responsible for Talent Acquisition, Organizational
Development, Industrial Relations and Performance Management.

 Corporate affairs:

Responsible for managing strategic business plan, takes care of all internal and external
communication. Also looks after public and government affairs. This department is further
divided into various sections like General affair section, Government related affairs, building
maintenance, personnel section and purchasing section.

 Internal Audit:

Internal auditing provides value to governing bodies and senior management as an objective
source of independent advice.

 Information Technology:

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Toyota has actively propelled growth and innovation in its information systems by
incorporating new information processing technologies while responding to various changes
in the external environment, including rapid globalization of development, manufacturing,
and sales operations; advancements in car electronics technologies; compliance with global
environmental standards; and changes in the Japanese and global economy. This department
is Responsible for smooth operation of all Information Technology system including SAP.

 Sales & Marketing:

The Organization structure of Toyota needs to be understood to comprehend various other

processes involved Procurement of orders, processing of orders, following upon sales,
completion of orders, micromarketing, calling customers and telemarketing, making reports,
warehousing etc.

1. Sales: Behind monitoring sales target by our 3S dealerships looks after computerized
order intake from dealerships, invoicing and daily sales administration issues.
2. Marketing Planning: responsible for Products Forecast, Planning, Promotion and
implementing the marketing strategies.
3. Customer First Department: Catering our after sales operational and service issues
with the help of our 3S dealership’s service department and supplying and making
sure all our 3S dealerships are equipped with enough genuine Toyota spare parts and
also dealing with counterfeit and regulatory issues with Government.

 Administration:

This department looks after logistics, transportation of employees, security of plant and
employees and also canteen facility.

 Production Engineering:

This department is responsible for improving production process and implementing new
projects to remove bottle necks form our processes.

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 Quality Assurance:

Making sure that we meet all Toyota Quality standards before delivering vehicle to customer.
Toyota has achieved a reputation for the production of very high quality vehicles in all
countries around the world. This has been achieved by an approach to quality control and
quality assurance, which is unique to Toyota and has been developed over many years. From
the early stages of the design process up until our vehicles come off the line, quality is key at
Toyota

 Product Development & Commercial:

Product development department is responsible for Product Localization which includes

vendor development, ensuring quality and timely supply of all localized parts and regulatory
issues

 Research and development:

Toyota has ensured that there is integration of the majority of R&D into the business units
which makes innovation management more effective. It fosters the collaboration with the
other departments of the business unit and the orientation towards the customer (customer
pull) in lieu of an exclusive focus on the technology (technology push)

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CHAPTER 4

4: HUMAN RESOURCE DEPARTMENT

4.1: TOYOTA MOTOR CORPORATION

Head of HR

Sr. manager

Manager
Manager Manager Manager Manager health
industrial
Development recruitment compensation and safety
relationships

4.1.1: Main people:

Mr. Ali S. Habib

Chairman

Mr. Yuji Takarda

Vice Chairman

Mr. Ali Asghar Jamali

Chief Executive Office

Mr. Khurram Mahmood

Senior General Manager Human Resources

4.1.2: HR practices:

In order for an organization to truly develop a culture similar to Toyota’s, the organization
should consider implementing the following important HR practices:

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 Defining competencies: Define the competencies (behaviors/traits) employees must

have, (e.g., teamwork, attention to quality, work pace, work ethic, continuous
improvement, problem solving ability, job fit motivation, communication, integrity)
 Hiring: Hire only people who have those competencies
 Training: Provide lean systems and training for all employees. Encourage high
performance by communicating the value and including it in your performance
management system.
 Performance: Coach and then remove those individuals who refuse to embrace your
high performance culture

4.1.3: HR functions: The activities addressed by the HR approaches include staffing,

compensation and benefits, employee and labor relations, health and safety, performance
appraisal among others. Furthermore, the restructuring of the firm’s traditional HRM
structure is in progress. The plan is to align the human accounting function with the new HR
responsibilities in the firm. Following are the main functions of HR department:

4.1.3.1: Staffing:
They believe in their people and that’s what makes the difference at Toyota. People are at the
heart of their long-standing success, which is why they go to great lengths to find the right
individuals to join the Toyota family. It includes further steps before commencement of
employment:

Online Telephonic In-person Written

Testing
application interview interview Agreement

 Online application: Apply online, including completing a questionnaire and

uploading your CV and cover letter.
 Telephonic interview: You’ll be shortlisted if your application reflects what we’re
looking for. You may also be invited to a phone interview. We’re looking at things
like background, experience relevant to the position, qualifications, interests outside
of work and team fit.

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 Face to face interview: If we’re keen to find out more, you’ll be invited to a face to
face interview. We’ll talk about why you’re interested in the position, why you want
to work for Toyota and what you can contribute to the role, team and organization.
 Testing: Depending on the role and your ability, Microsoft Office and psychometric
testing may be required. The testing is designed to help us understand more about you
and where you’d fit in at Toyota.
 Written agreement: To complete the process we’ll conduct referee and background
checks. One of your referees will need to be related to your current position. If
everything checks out you’ll get a formal job offer and written agreement, then it’s
into our induction program.

4.1.3.2: Human Resource Development:

Developing outstanding people is the most significant work of the company. One merely has
to seem at the people who pass through HR as managers to become aware of something is
different at Toyota. The insinuation of the attitude of management is quite deep.

 Team members must be healthy trained to understand the principles.

 Team members cannot terror that exposing a difficulty will get them in problem.
 Team members have to be trained in difficulty-solving methods.
 Team members have to be motivated to help the corporation achieve its goals.

Quality
Promotion Plant-wide training
encircle
process

Manager
Team leader Problem solving
development
training training

Learning facility Course Educational program

content

In conjunction with the geographic expansion of business and the growth of business areas,
undertaking global actions for the development of human resources has become a priority
issue. Toyota is building both tangible (a new learning facility) and intangible (course
content) structures relating to team member development that ensures a secure and steady
flow of qualified human resources to conduct Toyota’s global business in the 21 st century.
Toyota is working to develop human resources by implementing an educational program

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based on OJT (on-the-job-training), which is crucial for the development and generational
transfer of excellent monozukuri (manufacturing).

Types of training:
 Team leader training
 Promotion process
 Problem solving training
 Quality encircle
 Plant-wide training

4.1.3.3: Performance management:

At Toyota, an employee up to and including plant manager is measured on twenty different
aspects. Actually, the evaluation is done three times. The employee evaluates himself
independently of the evaluation of his supervisor. When discussing the evaluations, both have
to agree on a joint evaluation, and only this joint evaluation is then used for the promotion of
the employee.

Process:

These twenty aspects are split into two groups of ten aspects each. The first group is the more
important one, with each aspect having up to 10 points. The aspects in the second group can
each get a maximum of 5 points. Additional points can be given if the employee completed a
training during the previous year. A raise in the ranking corresponds with an increase in
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salary. However, a worker cannot move up more than two levels every year. It still takes time
to move up, and it usually takes ten to fifteen years to become a supervisor, and fifteen to
twenty years to become a group leader.

The Performance Management procedure begins and trimmings in the same series of events
which are as follows:

 Personal goal setting

 Performance study
 Midyear performance analysis
 Annual performance appraisal

Feedback:

At the year finish, the manager and the employee will be seated together to appraise the
employee’s performance in the known year and the feedbacks will all be fed into location
new goals and action tactics for the next year

4.1.3.4: Compensation and benefits:

Toyota Motor Corporation has never faced an issue with their employee compensation and
benefits packages. Part of their philosophy has been people are their greatest asset and they
treat them as such by paying them a good salary and empowering their employees. How can

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they attract top talent? Well even the top executives at Toyota do not make a seven figure
salary. Wages are determined with a fair market value in mind, but it is the “me” versus “we”
attitude that drives Toyota's success. Benefits are communicated to employees on their day of
hiring with the Toyota handbook which explains company policies regarding wages, health
care packages, retirement and pension plans and the company mission.

4.1.3.5: Safety and health:

Toyota Industries is involved in various activities to improve safety and health such as
training its employees to behave safely in the workplace, improving the safety of machinery
and establishing an occupational safety and health management system for its employees.
These activities have led to an occupational accident rate that is below the industry average.
In the future, Toyota Industries will continue to promote its occupational safety and health
management system in conjunction with carrying out risk assessments. These activities will
help the company to achieve the goal of zero workdays lost due to on-the-job accidents. They
include:

 Medical leave of absence

 Early symptom investigation support
 Disabilities Act
 data reporting
 Health evaluation
 Workers’ comp
 Family and medical leave

4.1.3.6: Employer and Employee relations:

Worsening economic circumstances have induced Toyota's managers and employees to the
strengthening of corporate competitiveness by labor-management cooperation. Yet, labor
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disputes occur frequently among subcontractor's workers who face severe employment
discrimination and a continuing anomalous increase of internal reserves.

4.2: GHANDHARA NISSAN

Nissan is working constantly to improve its human resource systems to achieve an

organization empowering employees to reach their full potential. The evaluation-based
remuneration system used to accurately gauge employee contributions is structured in a way
that motivates them to set and achieve high goals.

4.2.1: Nissan key HR leaders:

 Lori Durrough: Director, Human Resources - Strategic Business Partner
 Carren Faulkenberry: Senior Specialist, Global Talent Mobility
 Jim Liberty: VP HR
 Carlos Guerra: Corporate Director of Human Resources
 Nick Anton: Senior Manager, Global Talent Management

4.2.2: Comparison of departments:

The human resources team ranks their overall culture 78/100 which is 18% higher than the
average overall culture rating of 60/100 provided by the entire company. Other notable culture
scores are 58/100 from the Sales department, 57/100 from the Admin department, and 49/100
from the Customer Support department.

Nissan_comparison of departments

HR

Admin

Sales

customer support

0 0.5 1 1.5 2 2.5 3 3.5

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4.2.2: Functions of HR:

Following are main functions of HR department of Nissan:

4.2.2.1: Staffing:
At Nissan, our experienced Human Resources team work closely with line management
carefully defining the selection criteria for the vacant roles, ensuring we source the right
person for the vacant role. The recruitment and selection steps are outlined below:

Application First interview Second interview Final contract

 Application: Sourced through specialist recruitment agencies, internal referrals,

unsolicited applicants, Applications to consist of CV detailing work history, copy of
qualifications (where relevant) and a cover letter addressing the selection criteria.
 Selection: This step is often completed initially by a recruitment consultant before
being forwarded to the Nissan HR team. First round interview with HR and the line
manager at Nissan’s premises. Second round interview for shortlisted applicants will
delve further into the complexity of the role and may include a workplace assessment.
Last comes the reference checks.
 Offer: A verbal offer of employment will be made to the applicant by the Nissan HR
team. Following acknowledgement of interest from the applicant, a formal offer of
employment will be made in writing. Application to accept offer of employment in
writing by returning a signed contract of employment.

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4.2.2.2: Performance management:

Nissan believes in the importance of enabling individual employees to both achieve personal
growth and make positive contributions to the company. To enable both men and women to
apply their competence and to continue performing at their best, they require work formats
allowing them to work around time constraints and to pursue productivity on an hourly basis.

Happy8 Program:

 In 2015, Nissan introduced the Happy8 Program as part of its efforts to reform
how employees work.
 Happy8 aims to enrich both the work experience of employees and their private
lives by presenting the ideal of an eight-hour work day while enhancing the
quality of that time.
 Nissan has implemented a system offering flexible working arrangements to
enable employees to effectively balance work with family responsibilities.

4.2.2.3: Human resource development:

Nissan provides many Learning & Development opportunities for all employees (from new
hire to seasoned professional), covering the full range of needs from ‘on the job’ support, to
technical topics, to process improvement techniques through to the latest management and
leadership approaches:

1. Development programs:

Nissan offers a range of focused development programs for specific groups of staff (e.g. new
graduates, talent groups, new executive) which provide the opportunity for structured
collective learning as well as strengthened networking links. In addition, we provide many
professional development activities including:

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 Mentoring programs
 Self-assessment
 360o feedback
 Cross-cultural team assignments

2. Leadership Training programs: 

Most Nissan locations provide exciting Targeted Leadership Training programs that cover

those subtle, yet critical skills, which truly effective leaders possess. Nissan partners with
some of the field’s leading experts and many of the most prestigious universities to facilitate
workshops and training seminars to enhance your career progression. Some topics include:

 Leadership Essentials
 Building Trust
 Change Leadership
 Business Acumen

3. Development for higher performance:

Nissan provides unique Special Accelerated Development programs for high-performing

employees. These special opportunities are multi-day, intensive workshops, which provide
the opportunity to stretch and grow their own leadership skills in preparation for a future
leadership role. Many of these intensive workshops provide follow-up development
opportunities including:

 Assessment
 Feedback
 Coaching
 Mentoring opportunities

Training Program Achievements at Nissan Motor Co., Ltd.

FY2016 FY2017 FY2018

Number of trainees 120,219 171,949 241,674

Total hours in training 653,848 689,536 482,103

Hours per trainee 28.8 30.6 21.5

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Trainee satisfaction (out of 5) over 4.2 over 4.2 over 4.2

Investment per employee (¥) 71,000 73,000 86,000

Report 2021

4.2.2.4: Compensation and benefits:

With the support for a mentor alongside performance reviews every 6 months, working at
Nissan can be the beginning of a successful career. All of this is underpinned by a
competitive salary; Graduate programme salaries start from £30,476 and increase over the
course of the programme, ending on £37,113. Placement salaries are £16,634 per annum.
Both our Graduate and Placement Schemes over paid overtime and 26 days’ annual leave
plus bank holidays And an attractive benefits package. In addition to health benefits, Nissan
offers a range of benefit programs including:

 Pharmacy benefits
 Dental and Vision Coverage
 Life insurance and disability coverage
 Limited Purpose Flexible Spending Account
 Dependent Care Flexible Spending Account
 401(k) Savings plan with company match
 A Defined Contribution Retirement Plan
 Accrued vacation and 14 paid holidays
 Discount vehicle purchase program for family and friends
 Opportunity to participate in the available company lease vehicle program
 On-site medical center and Nissan Family Pharmacy (in major locations)
 On-site fitness center
 Tuition Assistance

4.2.2.5: Safety and health:

Promotion of employee health is a top priority at Nissan. Nissan has adopted a Basic Policy
on Safety and Health so that all employees can focus on their work in a safe environment. It
gives top priority to worker safety as well as their well-being as a matter of company policy.

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 A Uniform Set of Global Safety Standards

To allow all employees to maximize their performance, Nissan designs workplaces with
employee safety and health in mind. They work proactively at all levels to identify potential
issues or concerns in the workplace environment, develop measures to address them and
make it easier for employees to get their job done. In 2010, they standardized the safety
indices that previously differed from one global site to another. Safety performance is
monitored quarterly for each production site

 Specialized Mental Healthcare

We have established a specialized team led by a mental health professional to care for the
mental well-being of employees. In 2005, in cooperation with external mental healthcare
specialists, we introduced the Employee Assistance Program (EAP), a mental healthcare
program providing employees with consistent care covering everything from prevention and
early diagnosis to treatment and recovery.

 Rehabilitation Center to Facilitate Return to Work

Appropriate support mechanisms are required to facilitate an employee’s return to work in

case of long-term or recurrent absence due to a mental or physical ailment. Nissan’s support
in this area includes rules established in 2008 for the use of external rehabilitation centers to
ease employees’ return to the workforce following long-term or recurrent absence

4.2.2.6: Employer and employee relations:

Nissan had an employee intranet but it was not designed to be employee friendly and most of
the employees did not have access to it. This ensured that there was a need for new
technology with a dynamic employee portal, where all kind of HR related information could
be made available to employees 24/7. Employees rate their environment a D and are not so
happy at Nissan. When asked what’s positive about the culture and environment at Nissan, one
user shared, “No one has problems with anyone and we all work together for a common goal..
The HRIS access has improved work life as it has helped employees obtain required
information faster as the transactions are faster. This has also helped HR people as duplicate
entry work and non-value adding tasks have been removed from their duties.

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CHAPTER 05
5: CONCLUSION

In conclusion, Toyota Motor Corporation is an automobile industry with

oligopoly structure characterized by dominant firms. There have some of competitors
such as Ford, Honda, and Suzuki and so on. Toyota produced many models of vehicles
with various designs and functions to make the product differentiation between others
competitors simultaneously attract more customers. Moreover, the company has a great
reputation due to all HR functions and it can be quite liable to maintain their position in
market even though there are occur new entrant in the market. Toyota has established a
name that represents quality and reliability. With strides towards making a car that has zero-
emissions, Toyota has a bright future. Operating under monopolistic competition, it is clear
that Toyota will continue to differentiate and come out on top of their competition time and
time again by maintaining their HR policies.

On the other hand Nissan is somewhat able to seize the market opportunities and overcome
the external threats however, there is a huge untapped market opportunity for the company.
Nissan is financially stable and have the assets to compete with its rivals. One of the major
weakness is its name being associated with negative publicity due to high number of recalls.
Nissan also seems to be behind in terms of R & D sector. To remain competitive, automakers
need to constantly improve technologically designs and economic vehicles that cater to
consumers in both mature and emerging markets.

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CHAPTER 06
6: PROBLEMS AND RECOMMENDATIONS

6.1: Problems of Toyota:

 Slow reaction to customer complaints: Toyota didn’t look into customer complaints
and acted too slow when safety complaints came in. If a team faces consumer
complaints, they must be quick to address it and not hide from the upper management
and other teams.
 Problem of airbags: Few models were equipped with front airbag sensors. The
sensors can possibly malfunction with time, causing the airbag warning light to
illuminate with the risk that the driver’s airbag may not deploy during an accident.
 Absence of risk assessment: Toyota’s leaders should assess mechanical failures way
before releasing the automobiles in the market, in order to minimize the risk of
failure.
 Employ reward on bases of cost: Toyota rewarded its managers on basis of curbing
down costs instead of maintaining high quality of products, so this made managers to
be least bothered about solving the defects as far as low cost was maintained.

6.2: Recommendations for Toyota:

 Reaction to customer complaints: Toyota should cut out layers of middle
management so that engineers get more authority over what specific customer needs
are answered in the design and development of a new car.
 Energy saving products: Toyota should pursue the development of environmentally
conscious, energy-saving products while incorporating functions and services
demanded by customers (value chain) and delivering them to the global market.
 Employ reward: Toyota should reward the employees for the work done when the
vehicle model is a success to the consumers. The recognition of good work will
motivate the employees to strive harder.
 Social contribution: In addition to placing top priority on safety, Toyota should
thoroughly enforce compliance, including observance of laws and regulations, and
actively participate in social contribution activities.

6.3: Problems of Nissan:

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 Massive product recalls: product recalls seriously damage the company’s brand and
sales in the country. In 2018, Nissan had to recall 150,000 vehicles in Japan after it
found that unqualified staff had been performing final inspections before cars were
sent to dealerships.
 Poor marketing and advertising: Nissan could improve its marketing and
advertising capabilities. The company has spent ¥342.2 billion Japanese yen or
US$2.85 billion for advertising in 2015. This is more than what Hyundai, Honda or
Audi has spent, yet, the company gained little or no in brand presence for the money
spent
 Management Issues: Following the arrest of Carolos Ghosn over a financial scandal,
the problems of Nissan have deepened. It has brought a large number of problems
with it including an internal investigation and reformation of the companies weak
corporate governance structure

6.4: Recommendations for Nissan:

 Alliances: In order to improve quality and remain competitive in the U.S market, the
Nissan Motor Company should create alliances with the industry leaders. Since
Nissan is already in a partnership with Toyota for the alternative fuel research, it
could deepen its ties with Toyota for their well-known quality management system
and learn “the Toyota Way” of doing things.
 Marketing and advertising: There should be a well-planned marketing tactic to let
the consumers know about the efforts made to improve quality. Well informed
advertisement either on social media or public relation campaigns are good ways to
get the word out. 
 Reduce recalls: Recalls for the faulty parts would reduce and consumers trust will be
built through proper management which will genuinely create a positive brand image
and brand loyalty. It will allow Nissan to reach new heights with regards to
profitability and shareholder’s value.

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References

1. https://www.academia.edu/37776993/Project_Report_Toyota_Islamabad_Motors
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toyota-business-essay.php
4. https://www.comparably.com/companies/nissan/competitors
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company/
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264820251_HRIS_at_Nissan_a_new_era_in_human_resource_management
11. https://www.comparably.com/companies/nissan/human-resources
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