Toyota and Shell

Question 1

Give some background to Toyota.

Answer 1

Founded in 1937 in Japan, and established a growing presence in North America by the 1970’s and Europe by the 1990’s. Currently, it is expanding into Asia. It is the World’s largest car manufacturer after General Motors.

Question 2

Describe the management of the TNC Toyota.

Answer 2

Horizontal, across international boundaries, as it has several plants in several locations producing the same and each plant is self reliant. Most suppliers (subcontractors) are gathered closely around plants.

Question 3

Describe the scale of the horizontal management of Toyota.

Answer 3

It has 52 bases in 27 different countries.

Question 4

What principles does the Toyota production system employ?

Answer 4

The principles of of Standardisation, Just in time and Kaizen production, allowing production to be in continuous flow with parts being delivered when needed.

Question 5

How many regional bases does Toyota have and what is this an example of?

Answer 5

Toyota has seven regional bases around the world, with it european base in London.

Question 6

What are the causes of Toyota being in the UK?

Answer 6

• spreading company overheads
• Avoid the tariffs of the EU, saving billions of Yen. as vehicles are manufactured in the countrys of sale, they are considered to be EU manufactured, and avoid EU quotas.
• Britain has the lowest unionisation rate in the EU and the most dlexible labour laws.
• Lowering the unit ocsts in Europe and Britrain.
• meet the specific needs of local customers.
• Previous sucsess of other countries such as Rolls Royce.
• Incentives by the Giverement and the local councill (offer of £20 million).

Question 7

Give an example of one of Toyots plants.

Answer 7

Toyotas Burnaston plant:

• Large falst site, over 100 hectares.
• Room to expand - Greenfeild site>
• Close to M1 for good acsess to the rest of the country.
• Large pool of unemployed workers, many laid off from Rolls Royce.
• Good access to ncar components fom other companies.

Question 8

What are the political benefits of Toyota locating in Burnaston?

Answer 8

It won the contract at a time of high unemployment, with the car industry in dramatic decline.

Workers pay tax and don’t receieve umemployment benefits.

Question 9

What are the political drawbacks of Burnaston?

Answer 9

Increasing competition, hitting he british car industry.

Bypassed the EU’s trade barriers, set up to protect European companies.

Question 10

What are the economic benefits of Burnaston?

Answer 10

Total investment of £1.3 billion in Burnastion and £0.7 billion in Deeside.

$100 million upgrade to the Deeside, wales factory to build a new engine.

Toyota buys alot of components for its cars from British suppliers.

Positives multipier effect as workers have more money to spend, increasing the attractiveness of the area.

Question 11

What are the economic drawbacks of Burnaston?

Answer 11

Toyota has assets worth $380 billion per year, but the UK sees very little of this as most of it gets sent back to Japan. This leakage means that Britain sees little Foreign Direct Investment.

There is a risk that Toyota would shut the factory down in a serious recession as branch plants are noramlly affected first.

Question 12

What are the enviomental benefits of Burnaston.

Answer 12

The first company to achieve zero landfill waste in the UK in 2002.

Zero waste to incinerators in 2008.

reduced water consumption by 69% over the past decade.

70% reduction in vehicle emmissions over the last decade.

99.9% of European packaging is reused.

Question 13

What are the enviomental drawbacks of Burnaston?

Answer 13

Burnaston used be a greenfield site.

Urbanisation of surounding area.

Huge increase in traffic and noise pollution in the area.

Question 14

What are the social benefits of Burnaston?

Answer 14

Provided 3500 jobs, paying high manufacturing wages of £30,000 plus.

2778 jobs now at Burnaston and 440 at Deeside.

Question 15

What are the social drawing of Burnaston?

Answer 15

Cut 750 jobs from the Uk, more than 10% of the workforce - deinductrialisation.

Competeition with existing car makers means potential job losses elsewhere.

Question 16

What is the company shell?

Answer 16

Shell is an Anglo–Dutch transnational company in the oil and gas industry. Shell’s headquarters is in The Hague, Netherlands and with its registered office in London, United Kingdom.

Question 17

Why was shell as we know it formed?

Answer 17

The Royal Dutch Shell Group was created in February 1907 through the merger of two rival companies (Royal Dutch Petroleum Company and “Shell” Transport and Trading Company Ltd of the United Kingdom). The terms of the merger gave 60% ownership to the Dutch and 40% to the British. The merge was driven by the need to compete globally with the then dominant American petroleum company.

Question 18

When did shell begin to drill in offshore rigs?

Answer 18

In 1947, the first commercially viable offshore oil well was drilled in the Gulf of Mexico. By 1955 Shell had 300 offshore wells, mostly in the Gulf. There were also new discoveries in the Niger delta and in Borneo. Commercial production of oil in Nigeria began in 1958.

Question 19

What policy did shell develop in the 1960’s?

Answer 19

During the 1960s, Shell took the decision to internationalise the company. A policy of placing local people in top positions in a given country was adopted.

Question 20

Where is Shell looking for expansion in the 21^st century.

Answer 20

In the 21st century Asia has become a big focus for investment and expansion especially in China, Vietnam and Malaysia.

Question 21

How many employees does shell have?

Answer 21

Royal Dutch Shell has more than 93,000 employees in more than 90 countries

Question 22

What is Shells organisation structure?

Answer 22

The Royal Dutch Shell group has a vertical integrated organisation structure. The vertical structure is a management style where crucial decisions are made by CEO (often in headquarters) and these decisions are implemented to the employees directly.

Question 23

Describe a verticle organsisation system.

Answer 23

Vertical organisation structure forms a supply chain where each part of chain produces or provides additional services. The structure means that Shell are active along the entire supply chain from locating deposits, drilling and extracting crude oil, transporting it around the world, refining it into petroleum products such as petrol/gasoline, to distributing the fuel to company-owned retail stations, for sale to consumers.

Question 24

Why is shell in Nigeria?

Answer 24

Exploration for oil in Nigeria was very expensive and required large amount of expensive and advanced equipment. The Shell group were growing quickly in the 1950s and so Shell started exploring for oil in Nigeria. Shell found that Nigeria was extremely rich in oil especially around the Niger Delta.

Nigeria being a coastal country in Africa meant that Shell could easily transport the oil exploited in Nigeria and being coastal meant less transportation costs.

Nigeria is a LEDC and with Shell being a fast developing company, expansion into Nigeria was easy as less restrictions on foreign investment than in MEDCs. Also the Nigerian government back the highly influential Shell and saw the economic benefits which would be gained rather than potential environmental and social problems.

Question 25

What are political neagtives caused by shell?

Answer 25

• Shell has been suspected of bribing governmental officials and encouraging corruption. 70% of oil revenue siphoned off through corruption.
• Shell has been linked with contributing money to Nigerian Military in return the military are used as a private army to enforce Shells demands.
• The government defended Shell against controversial protestors like the MOSOP (movement of survival of the Ogoni People). In particular the campaign of Ken Saro-Wiwa and 8 Ogoni people who campaign against Shell. Key witnesses were believed to be bribed and all 9 were hanged by the Nigerian Military.

Question 26

What are some economic positives of Shell?

Answer 26

• Oil is the largest source of revenue in Nigeria, producing 95% of export earnings. Oil accounts for 20% of Nigeria’s GNP.
• Shell employs 5,000 people with 95% Nigerian and 66% from Niger Delta. 20,000 people indirectly employed due to Shell.

Question 27

What are some economic negatives of Shell?

Answer 27

Due to a lot of oil spills, oil is starting to enter large water bodies. This has caused a massive drop in fish populations, so fishing is no longer economically viable for local people. This causes local people to remain in poverty.

Question 28

What are the environmental drawbacks of Shell?

Answer 28

Between 1986-2003 50,000 acres of mangrove forest cleared mainly due to oil exploration and laying pipes etc.

Gas flares from exploitation contribute to acid rain and release huge amounts of greenhouse gases, which contribute to global warming.

6000 oil spills in the Niger delta. Can enter water courses and destroy aquatic habitats resulting in loss of biodiversity.

Construction on the coast and increased shipping can cause coastal erosion and disturbance of fish species.

No EIAs (Environmental Impact Assessments).

Question 29

What social problems are related to Shell?

Answer 29

Shell employed local people from many ethnic groups and this caused tensions between ethnic groups. The Ogoni people felt that Shell was exploiting in their area so should employ them, but Shell employed many people from the ethnic group Igbo

The gas flares from burning wastes resulted in poisonous particles to enter the atmosphere. This caused an increase in respiratory diseases affecting the local people.

The many oil spills in the Niger delta entered the water supplies of the local people. This lead to the water becoming contaminated with a waterborne disease like cholera.

13% of Shell’s Profits in Nigeria were to be spent on community projects like new hospitals and other services. No projects were completed.