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1st Semester Examination - September 2020

L4 Diploma in Business
Understanding Business Organizations

Year 12 Class:
Total Marks: 100 Subject Teacher :

ASSIGNMENT TITLE:
Toyota

Submission Requirements

 Answer all tasks given.

 A word-processed, printed document containing all the written
components of the assignment should be submitted.
 Word count maximum 2000 words for the assignment.
 Submission Date: 11th September 2020.

Name of Setter MS. Noyesha Weeratunga

Page 1 of 4
Introduction
Toyota Motor is a Japanese multinational automotive manufacturer headquartered in Japan.
Kiichiro Toyoda was the founder of Toyota Motor Corporation. Toyota is the largest automobile
manufacturer in Japan, and the second-largest in the world. Toyota is listed on the London Stock
Exchange, New York Stock Exchange and Tokyo Stock Exchange.

Toyota Motor Corporation’s organizational structure is based on the varied business operations
of the company around the world. As one of the world’s leading automobile manufacturers,
Toyota employs its organizational structure to support business goals and strategic direction. This
structure is also linked to the traditional organizational structures used in Japanese businesses.
The effectiveness of Toyota in maintaining a strong global presence shows its ability to use its
organizational structure to maximize efficiency and capacity utilization. In essence, this
organizational structure is a contributor to Toyota’s success in the global market.

Toyota has a divisional organizational structure. This structure underwent significant changes in
2013. This was seen as a response to the safety issues and corresponding product recalls that
started in 2009. In the old organizational structure, Toyota had a strong centralized global
hierarchy that was more like a spoke-and-wheel structure. The company’s headquarters in Japan
made all the major decisions. Individual business units did not communicate with each other, and
all communications had to go through the headquarters. After the reorganization that was
implemented in 2013, Toyota’s new organizational structure has product-based Divisions. The
company has four of these divisions:
(a) Lexus International,

(b) Toyota No. 1 for operations in North America, Europe and Japan,

(c) Toyota No. 2 for operations in all other regions, and

(d) Unit Center, which is responsible for engine, transmission and other related operations.

However, in the current organizational structure, the company has increased the decision-
making power of regional heads. In essence, Toyota’s decision-making processes became less
centralized. Nonetheless, all business unit heads report to the firm’s global headquarters in
Japan.

Page 2 of 4
Task 1 - 25 Marks

a) Identify whether Toyota is a Private Limited company or a Public Limited Company. Justify your
answer. (4 marks)

b) Explain THREE (3) benefits and THREE (3) drawbacks of being a Public Limited Company.

(12 marks)

c) Give THREE (3) examples of the differences between Private and Public Limited Companies.

(9 marks)

Task 2 – 25 Marks

a) From the information provided in the case study, construct an organisational chart for Toyota.
(4 marks)
b) After the reorganization that was implemented in 2013, Toyota’s new organizational structure
has product-based Divisions. Describe THREE (3) advantages of using a divisional structure for
Toyota. (9 marks)

c) Before the structural change, Toyota had a strong centralized global hierarchy. Explain THREE
(3) benefits and THREE (3) drawbacks of centralization. (12 marks)

Task 3 – 25 Marks
a) Using FOUR (4) contingency factors to support and justify your answer, explain why either a
mechanistic or organic structure would be the most effective organization structure for
Toyota. (16 marks)
b) Explain 2 reasons as to why Toyota decided to have a structural change. (4 marks)

c) Explain the role of a HR Manager and identify THREE (3) benefits they can bring to the
organization. (5 marks)

Page 3 of 4
Task 4 - 25 Marks
a) Using the PEST environmental analysis tool, discuss FOUR (4) external factors which could
impact business activities of Toyota. For each category, discuss at least TWO (2)
considerations. (12 marks)
b) Using the Porter’s Five Forces, analyse the industry competition and profitability of the
automobile industry. (10 marks)
c) Why environmental analysis is important for a business. Identify THREE (3) reasons.
(3 marks)

Guidance

All references and citations must use the Harvard Referencing Style.

END OF ASSIGNMENT

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