Analysis Of Effectiveness Of New Organizational Structure Of Toyota Motor Corporation

Background Context

Discuss about the Analysis of Effectiveness of New Organizational Structure of Toyota Motor Corporation.

Toyota Motors Corporation is a multinational organization manufacturing automobiles. The corporation has its headquarters in Japan and operates business units across the world. The organization has grown to be a leading manufacturer in the automobile industry (Gregory, 2015). To survive the change in the industry for the past over 75 year, the company has implemented several changes in the organization to enhance growth, development and dominance of it automobile brand of Toyota (Toyota-global.com, 2016). This paper analysis the effectiveness of Toyota Corporation management to adopt the new organizational structure using Lewin’s unfreezing change refreeze model. The paper will include the change drivers, strategies used and the management of resistance together with organizational culture among employees of the organization.

The Corporation has for long time used the traditional hierarchy organizational structure to manage it businesses. This bureaucratic method had been centralized the businesses decisions to the corporation’s headquarters in Japan. It required that decisions be done from headquarter then channeled down to the business units around the world. It denied business units from making tailored decisions that were necessary for the specific unit operations. The business units were also not able to share ideas with one another. This organizational structure led to processes that did not add value the Corporation in the current world of business (Gregory, 2015). It did not encourage innovations and adoption of technology making the corporation less competitive.

The change in the organizational structure started in 2000. This was as a result of business expansion that led to diverse employees around the world. It started by instituting flattening personnel organization model (Sako, 2004). This has enhanced sharing among employees in the organization that has promoted innovation in the business units and the corporation in general.

 In 2011, the company outlined a new Toyota global Vision. For the achieved of the vision, the company found it important to adjust and implement a new organizational structure (Toyota-global.com, 2016). This structure has been discussed and analyzed in the paper.

The company has had a division organizational chart. This structure has been reorganized to have the following features;

Global hierarchy: This feature ensures that the corporation maintains it top leadership from the headquarters.  Despite maintaining this feature, the organization has increased powers of managers in other levels to make decision. Regional and businesses unit managers were allowed to make decisions and report directly to head office in Japan.

Characteristics of the Toyota New Organizational Structure

Geographical divisions: the new organizational structure has outlined eight divisions. These regions operate independently and report to headquarter. This feature enables the regions to improve on the products and service as per the requirements of the region.

Product based divisions: The new organizational structure recognizes four product based division for the company. The characteristic is meant to enhance brand developments of the Toyota product. It also offers support for product line development.

This theoretical model helps managers implement change in their organizations effectively. It outlines the critical stages and strategies to be employed to reduce resistance, doubts and uncertainties from employees in the organization. The model involves three stages; unfreezing, change and refreezing of change in an organization. They are discussed below;

This is the first step of implementing change. It involves breaking of the existing culture and status in the organization that new can be created. It also involves the top management communicating and making it clear the objective and benefits of the change. Effective handling of this stage reduces resistance from the employees of the organization (Senior and Fleming, 2006).

In this case of Toyota Motors, the top management has to be involved in communicating to juniors the need for adopting the new organizational structure. The aim of the Toyota organizational change is to adopt a structure that decentralizes decision made to allow achievements of it vision of creating products that are earth friendly and sustainable growth.

Is the second stage and involves the implementation of the planned change. The way of doing things is adopted in this stage. The new actions are seen by employees happening in this stage. The employees are addressed how the change is going to benefit them.

In this case of Toyota Motors, Decisions are encouraged to be done on the site. Regional and business unit managers make decisions by using the information on the site. This will show the managers and employees how fast, convenience and reliable the decisions made on the site are rather than waiting for decisions to be made from headquarters.

This is the third and last stage of managing change. It involves stabilizing implemented change. This stand involves strategies that motivate junior managers and employees to embrace and practice change.

For the intended change in Toyota motor Corporation, this stage will involve strategies that promote junior managers to adopt making decisions and constantly reviewing decisions to facilitate the effectiveness of the change. The senior management can design rewards that can act as incentives for the junior managers to practice change implemented.

Lewin’s Organizational Change Model in Toyota Motors Corporation

 The change and reorganization of the Toyota Motor Corporation organizational structure have been driven by the following;

• Need to capture and convey consumer opinion: There has been increasing need for the company to incorporate customers’ opinion in their product. This has led to increased need to get the first hand information and be used to make decision in respective regions.
• Need for quick decisions: Due to the dynamism in the market, there has been a growing need for quick prompt decisions to enhance consistent performance. Centralized decisions were time consuming and were not based on site information. Therefore, need for prompt decision triggered organizational change.
• Need for increased control: The Corporation has increases in size and need for control to enhance efficiency and effectiveness has increased. This has necessitated constant check by on site management to ensure that the activities are in line with the organizations plans. The review and suggestions of managers on site help manage the business unit and it environment. This ensures that the decisions taken are acceptable to the nearby communities.
• New communication technologies: The advancement of communicating industry has made it easy for the organization to give assistance to managers in all levels. This has made it convenience for decisions to be made on site with available consultation avenues.

They include;

• Simplifying the board of directors
• Reducing the executive decision making system
• New structures to enable local decision making
• New structures to ensure outside opinion is listened to and used in decision making.

Resistance to change is common when implementing change. It the role of the company’s top managers to reduce resistance among junior and employees during the implementation process. Top management should ensure clear communication for effective implementation of change (Senior and Fleming, 2006). They should ensure that the change is supported by the junior and employees. This will make it easy for them to change. The top managers should also work on employees’ attitudes to avoid negative on job attitudes that can reduce morale in the organization.

Organizational changes do change the organizations culture. The new organizational structure adopted by Toyota Motors is changing the bureaucracy culture in the organization and introducing an expert culture where anybody can teach and be taught (Toyota-global.com, 2016). The new culture promotes innovation I the organization allowing and incorporating customers’ opinion in the products manufactured.

Conclusion

From the analysis above, the Toyota Motors Corporation organization structure change is a timely crucial change for the company. The change promotes innovation and incorporation of customers’ opinion in the products that the company is manufacturing. The change also will ensure that the corporation produces products that are earth friendly and enhance sustainability. The effectiveness of the implementation of the organizational change depends on the effectiveness of the top management of the company to apply strategies appropriately to achieve the planned change. Therefore, the change in organizational structure of Toyota Motors will enable the company expand and create products that the customers need. 

References

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Toyota-global.com. (2016). Toyota Motor Corporation Global Website | 75 Years of TOYOTA | Organizational Changes | Last Organizational Chart. [online] Available at: https://www.toyota-global.com/company/history_of_toyota/75years/data/company_information/management_and_finances/management/organizational/organizational_changes15.html [Accessed 12 Oct. 2016].