Toyota Motor Corporation (TMC)
was established as an independent and separate company on August 28th,
1937. Nowadays it comprises of 53 manufacturing plants in 28 countries and
regions outside Japan. The company is well known for its high-quality vehicles
and innovative technologies (Winfield, 1994). Its Research & Development
structure covers everything from basic research to advance engineering and new
product development (Toyota Global Site, 2017). Toyota’s core products and services are auto – manufacturing,
environmental technologies, ITS: an invention of road traffic systems, Robot
Technologies, production of various robots under the concept of “harmony with
people;” and Toyota Financial Services.


Organization cultures are
viewed as separate and distinguished from national cultures, they have their
own history and characteristics and existence (Mihiotis, 2005). Hofstede (1992)
defined that “Culture perceived from the collective aspect is not a property of
individuals, but indeed property of groups. S?hein (2006, p.17) states that organizational culture
is a structure of common hypotheses that are distributed among all members of
the group to solve internal and external problems of an organization and to
share their knowledge with new members. Organizational culture in general can
be defined as “a system of assumptions, values, norms, and attitudes,
manifested through symbols which the members of an organization have developed
and adopted through mutual experience and which help them determine the meaning
of the world around them and the way they behave in it” (Jani?ijevi?, 2011)

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Organizational structure is
defined as a relatively stable, either planned or spontaneous, pattern of
actions and interactions that organization members undertake for the purpose of
achieving the organization’s goals. The understanding of organizational
structure is based on a basic and primary hypothesis and belief that it has its
purpose (Dow, 1988).


Both organizational structure
and culture determine the behaviour of organization members, so it is of a
great interest to examine the relationship between them. The nature of the
relation between organizational culture and organizational structure implies
that it goes both ways, meaning that culture influences organizational
structure, and also that organizational structure influences organizational
culture. Organizational culture influences selection and implementation of an
organizational model in the described way. In addition, when a company operates
under a specific organizational structure for long time organizational
structure may also be affected.  It can also
consolidate or modify the existing type of organizational culture within a
company. The effect that organizational structure will have on the company’s
culture depends on the compatibility between cultural values and norms on the one
hand, and modes of performing work and completing tasks implied by
implementation of the particular organizational structure model in question on
the other.


According to Toyota Global
Newsroom website, the company prior to 2016 structural change, had already
implemented structural changes in order to achieve its overarching goals of
producing ever – better cars, to enhance the strength and autonomy of regional
operations, and to emphasize the importance of genchi-genbutsu (the on-site
learning and problem-solving) in training personnel. The 2011 restructuring was
also aiming towards a more autonomous region-based management. Before the
change TMC organizational culture was based on continuous improvement
(producing ever – better cars) and teamwork (enhancing the strength of regional
centres and encourage continuous learning and
problem – solving.)


The new organizational structure’s
first goal was to create a company built around product-based organizations,
rather than function-based organizations. By doing so, Toyota decentralized
decision making and gave more power to the regional presidents. In addition,
most of the top-ranking positions were cut, in order to help the company’s
flexibility, towards the fast decision making and encourage new initiatives and evolution through
co-operation and innovation. Furthermore, by implementing the new change they
tried to eliminate
unnecessary coordination work among the plants worldwide. Toyota decentralized decision encouraged
employees doing the work to make the appropriate choices about how to accomplish
it. Cultural values were changed in order to encourage every single person to
think creatively about improving his part of job in the organization (Daft,





Question 1.2


A manager faces a lot of issues as he tries to think about the structure of
his organization. This is one of the thorniest subjects, whether to group
activities primarily by product or by function (Harvard Business Review, 2017)


Functional structure is the grouping of positions into departments based on
look-alike skills, expertise, work activities, and resource use. A functional
structure can be thought of as departmentalization by organizational resources,
because each type of functional activity—accounting, human resources, engineering,
and manufacturing— represents specific resources for performing the
organization’s task. People, facilities, and other resources representing a
common function are grouped into a single department. (Daft, 2010). Functional
departmentalization is commonly used to divide employees based on the common
work process in which they are engaged. In a functional organisational
structure, each department is supervised by a head who is called as the
department manager. The manager is expected to be an expert in the respective
field, and he will be held responsible for the performance of his own department.
Moreover, the functional heads of all the departments, report directly to the higher
echelon of the organisation.



Production departmentalization means that all different departments are structured
based on the product or service on which employees manufacture or provide. Product
departmentalization often occurs in companies that divide product manufacturing,
marketing, sales, into certain categories, leading each department to
concentrate on core operations. Product-based structure is an organization
structure where activities are grouped according to product or service, and
formal coordination of management functions occurs separately for each. This
structure may have as a disadvantage the duplication of some
management functions. On the other hand, it enables their activities to better
fit to the requirements of a particular product and its market. It is,
therefore, said to be an appropriate structure for a diversified organization. Authority
and coordination occurs at a relatively decentralized level compared to functional
structures. Companies implement a product-based organizational structure to
take advantage of the multiple product lines within the business. Each portion
of the structure can focus as an individual unit inside the whole company. The
structure may also have several layers of managers and employees.


Over the past several years,
Toyota has faced numerous challenges, including large-scale global recalls due
to parts defects. The company’s most recent large-scale recalls have been over
issues such as faulty seatbelts, power-window switches, and Takata airbags (,
2017). The recalls hurt Toyota’s past years good
reputation. Furthermore, the ability to quickly respond to customer’s worries
for quality and raised questions about its ability to quickly respond to
customers’ anxieties and worries. Toyota is seeking to eliminate these quality
issues and simplify work processes with these changes implemented in organization,
focused on a product-based structure. In many cases the previous structure
involved a disproportionate large amount of time and effort as a result of the
cross-functional co-ordination emplaced. Flexibility is now the key word which
empowers the company to overcome the multiple difficulties.




Case 2


Question 2.1


To successfully act as a
leader, requires a specific set of competencies and behaviours. For example, it
has always been important for a leader to have a clear vision for the future of
his organization. In addition, different economic circumstances, technology
landscapes, cultures, and social values require different approaches. Contemporary
organizations need to be managed by digital tools, technologies, and business models
such as analytics, virtual reality, cloud environments, mobile solutions,
machine learning and connected devices. These digital innovations are speeding
up the pace of change and making it harder for leaders to accurately create and
sustain positions of competitive advantage. (, 2017)


In addition, hiring and
keeping quality employees is also one of the most urgent concerns for today’s organizations.
Employees give a company its primary source of competitive advantage, so,
talent management is of the highest priority for clever managers. Daft refers
to Human Resource Management (HRM) as the design and application of formal
systems in an organization in order to guarantee the effective and efficient
use of human talent so as to accomplish firm’s objectives. (Daft, 2010)


The technological advance,
automation and artificial intelligence dramatically
change the nature and number of available jobs. Technology of course, has the
power to improve our lives, raise firm’s productivity and the living standards.


As the definition of work continues to evolve, the
range of skills that employees need have not necessarily been provided by
traditional educational systems. This
makes it difficult for Human Resources to assess applicants’ qualifications
properly. To further complicate matters, there is lack of standardization in
education, especially in a global level. As businesses expand and HRM tries to hire
beyond borders, the need for HR to scrutinize job qualifications carefully
becomes ever more important.


As a small business owner, one may have a person who
wears several hats, and who accomplishes different functions. Instead of
offering him unlimited vacation, consider adapting a policy of making him
understand that you only care about the result of his work and the impact to
the small business prosperity and not the hours of his work. In this way you
give maximum flexibility to the employees especially to those with families or
for those with other commitments, but without jeopardizing or compromising the


By offering unlimited or a more flexible vacation plan,
company’s employees may be happier and more productive. By this way the
manager makes his employees feel responsible and
shows them confidence.



Question 2.2



Motivation refers to the level of desire either internal
or external which a person feels which urges
and enables him to pursue a certain course of action. “Intensity”,
“direction” and “persistence” are key words for the employee towards achieving a
goal. Motivation is not to be confused with happiness in the work environment. Employee
motivation directly affects productivity, and part of a manager’s job is to relocate
motivation in order for the company to reach
its goals. (Daft, 2010).


Douglas McGregor (1960) has formulated two models/theories
which examine individuals’ behaviour at work. He named them Theory X, which is basically
negative and Theory Y basically positive (McGregor D.,1960). Chris Argyris
also, made a comparison between the bureaucratic – pyramidal values with a more
democratic, people-centred value system corresponding to McGregor’s Theory Y
assumptions about people. These two traditional theories ( Theory Y and Argyris)
are the most adequate to explain this new trend in employee motivation in
modern business environments.


McGregor’s Theory Y assumes that people are willing to
work, accept responsibility, are self-directed and creative (Mihiotis, 2005).
Managers that have a Theory Y perspective, behave in participative ways
allowing the subordinates more job involvement, freedom and responsibility. As
is mentioned in the article “I do so because, in my 13 years as an
entrepreneur, I’ve learned that when you treat employees like grown-ups, they
act like grown-ups.” (Forbes). According to Theory Y control, achievement and
continuous improvement is achieved by enabling, empowering and giving
responsibility. Theory Y hypothesis gives weight to the high
potentials and capabilities of the personnel. Theory Y assumes
that higher-order needs dominate individuals.


Argyris compared the bureaucratic – pyramidal values with
a more democratic, people-centred value system corresponding to McGregor’s Theory
Y assumptions about people. According to Argyris’s Theory of Adult personality
managers that treat their workers in a positive way will achieve the highest
productivity. He advices managers to expand job responsibilities, allow task
variety and participation. People in work organizations will have a tendency to
grow from an infant to a matured state. But many organizations are structured
and organized in such a way that the management practices they follow will keep
away the employees from maturing. Employees are given minimal control over
their environment. They are expected to be passive, dependent and subordinate.
If the organization is too formal that it has definite plans, policies,
procedures and methods, an employee will need to be submissive and passive,
which suggest a Theory X type of organization. In order to make individuals
grow mature, he proposes gradual shift from the existing pyramidal organization
structure to humanistic system. Since employees can move from the state of
immature behaviour to mature behaviour, he supports Theory Y, proposed by
McGregor, and both (McGregor and Argyris) found that giving more responsibility
to individuals, is beneficial to both employees and the organization.




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