Organizational structure of Toyota Corporation is a popular object of professional analysis. Much has been written and said about the value of technologies and their implications for organizational development and changes in big corporations like Toyota. Technologies shape new business environments and flatten organizational hierarchies. Information technologies allow for capitalizing available market opportunities and utilizing the organization’s business potential to the fullest. It goes without saying that technologies are at the heart of Toyota’s organizational structure. Nonetheless, Toyota experiences considerable difficulties with delegating its power to national plant branch representatives and managers. As a result, the effectiveness of change management and organizational processes within Toyota has little to do with technologies per se but implies the need to restructure the company’s organizational culture and values from the bottom.
Toyota Motor Corporation is rightly considered as a gold standard of the automotive industry and a role model for other car manufacturers to follow (Bauer & Erdogan, 2009). Organizational structure is believed to be one of the key factors of Toyota’s sustained commercial success. Even as its competitors were losing billions because of the recession, Toyota still managed to retain its position of a leader in the global car making industry. Recent advances in technologies contribute to Toyota’s organizational achievements and success. The organizational structure of Toyota is that of innovation, technologies, and change (Leonard, 1997). With an emphasis made on just-in-time manufacturing, teamwork, and complex enterprise architectures, Toyota relies “on a series of interrelated and internally consistent choices that reflect the priorities and trade-offs in its competitive situation and strategy” (Hayes & Pisano, 1994, p.18). Technologies predetermine the organizational structure and development pathways in Toyota; nonetheless, they do not secure the company from organizational and structural failures.
That technologies are at the heart of the company’s organizational structure cannot be denied. Everything within the Toyota Corporation is built on the principles of just-in-time production (JIT). The latter is closely aligned with complex information systems and, simultaneously, guarantees that all elements of the company’s organizational structure operate to deliver raw materials and supplies at the time they are needed and used (Bauer, & Erdogan, 2009). JIT technologies not only speed up all manufacturing processes but promote continuous organizational improvements (Lu, 1989; Toyota, 2011). These are technologies that create a continuous flow of manufacturing operations and help to create products that fully satisfy customers (Toyota, 2011). They create a culture of innovation and help Toyota to integrate its R&D functions into business units (Wentz, 2008). However, technologies and manufacturing alone would never guarantee global market success. It is through teams and teamwork that technologies work for the benefit of Toyota and its customers. There is a general tendency in the modern world to consume resources of the environment and protect the nature more. The same tendencies are appropriate for the development of the Toyota Company. It is mainly focused on providing their clients with effective and affordable cars, but at the same time, it is focused on the issues of the environment, furthermore, to expand globally and extend the limits of the export.
Teamwork is the fundamental ingredient of the organizational structure at Toyota. Teamwork creates an ideal organizational structure, which ensures that (a) everyone has full understanding of the organization, its purpose and mission; (b) all functions and decisions are integrated effectively across the company divisions and groups; (c) functional specialists are organized together to enhance their skills and develop standards and expertise for their specialty; and (d) the company maintains smooth flow of information at all levels (Johnson, 1998; Liker & Hoseus, 2009). The latter is essentially about technologies. Technologies also enhance the quality of leader-team cooperation. The fact is that team leaders spend half of their work time online, coping with the production and process challenges (Liker & Hoseus, 2009). The other 50 percent of their time they work offline, solving routine problems, talking to team members, and coaching (Liker & Hoseus, 2009). Technologies facilitate close ties between various elements of the company’s organizational structure and create the basis for implementing complex and effective enterprise architectures.
Besides improvement of internal factors of the company, Toyota is focused on the external conditions of their operations. Thus, the issues of the environment are one of the most important in the world. There is no doubt that Toyota positions itself as an eco-friendly company. The modern developments of Toyota Company are correlated with the issues of the global warming. Electrical energy, conservation of oil, preservation of water and chemicals are the issues of the highest importance for the Toyota Company. Policy of the modern Japan is correlated with the well-known crucial issues of the environment. Other policies of Toyota are mainly correlated with the political and economic conditions of the countries of their operations. In spite of numerous pitfalls, it can be said that the company is on the way of dealing with the most complex issues in the modern context.
Enterprise architectures at Toyota slowly move towards to the so-called next-generation model of demand management (Cooper & Nocket, 2009). This is essentially about using technologies to meet the goals of the entire company, instead of being focused on separate projects (Cooper & Nocket, 2009). Unfortunately, technologies do not secure Toyota from structural failures. Fragmentation and fractionalization are the main challenges Toyota consistently fails to meet (Vartabedian & Bensinger, 2010). As a result, plant managers and top managers of Toyota’s national divisions fail to obtain relevant information about product supply, demand, and customer safety (Vartabedian & Bensinger, 2010). This information goes directly to Japan, leaving Toyota’s affiliates little to no power to take relevant organizational decisions.
Factors Affecting Organizational Structure
Apparently, Toyota’s organizational structure is being influenced by a multitude of factors. These include but are not limited to innovation, efficiency, organization, and an emphasis on technologies and teamwork. Toyota’s organizational structure is designed in ways that make the customer entirely satisfied with the final product quality. Simultaneously, difficulties with delegating power to the company affiliates and failure to empower plant managers to take relevant decisions stem from Toyota’s corporate culture and historical commitment to centralized decision-making. Therefore, technologies are not everything in making Toyota’s organizational structure more efficient. The company needs to reconsider its values and commitments. Changes in culture and decision-making will help to align present day technologies with the main production processes within the Toyota Corporation. Technologies and manufacturing alone would never guarantee global market success: it is through teams and teamwork that technologies work for the benefit of Toyota and its customers.
Technologies are at the heart of Toyota’s organizational structure. Technologies help Toyota to meet the goals of the entire company, instead of being focused on separate projects. Technologies also enhance the quality of leader-team cooperation. They create a continuous flow of manufacturing operations and help to create products that fully satisfy customers. However, technologies are not everything in making Toyota’s organizational structure more efficient. The company needs to reconsider its values and commitments.