Toyota Case Study

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Toyota, the last standing Australian manufacturer, has announced that they will cease producing cars in Australia in 2017 (Toyota Australia Announces Future Plan For Local Manufacturing, 2014). The coalition government made it clear that it was not prepared to further assist the Australian car manufacturers and consequently Holden and Ford closed their doors. Toyota followed suit as manufacturing in Australia was no longer sustainable due to the unfavorably high Australian dollar, high labor costs, highly competitive domestic market and overseas competition. (Australian Government Productivity Commision, 2014). Manufacturing has been a great source of pride for Australians over the many years and so this is a solemn time for the industry.
This essay will look at the consequences of the termination of car manufacturing in Australia. Throughout the essay, parallels will be drawn from the Shareholder and Stakeholder theories of corporate social responsibility to analyse the closure of Toyota and where the ultimate responsibility lies. Friedman’s shareholder theory states that the only responsibility of business is to generate profits for its shareholders, within the constraint of law. In contrast Freedman’s Stakeholder view suggests that the business has responsibilities to all of its stakeholder groups and not just shareholders. These two theories will be used to look at the actions of Toyota, The Australian Government and The Australian Manufacturing Workers Union.
Australia’s car market is extremely fragmented in the sense that there is an abundance of badges and models available for purchase. Stephen Long has said the market is “so fragmented that a local plant could produce four of the top selling models and still n...

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...horough looks at the 3 perspectives of Toyota, The Australian government or The Australian manufacturing workers union, it cannot be said that the closure of the manufacturing plant in Australia was the sole responsibility of any of the groups. Each played their unique role in providing setbacks and reinforcement. Unfortunately the collapse of Toyota and Australian car manufacturing was a result of factors that are out of the control of these three parties. The responsibility falls on the dramatic surge of the Australian dollar making exports less profitable as the demand decreases. Similarly the competition from regions of low labor cost and high demand growth were difficult to match. With recent years Globalisation and the fragmented and in turn competitive domestic market has led to the downturn and eventual collapse of the Australian car manufacturing Industry.
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