c) Think five years in the future as Toyota Motor Corporation grows.

What
do you expect will change in this organizational structure? Will you be
embracing a new structural model? Produce and create a new proposed
business structure. (Provide a description and diagram to justify your
answer.)

THE CURRENT SITUATION AT TMC.

An organizational structure is undoubtedly fundamental for a company as it acts as
guidance to every employee by spreading the official reporting relationships that control
the workflow of the particular company. Additionally, Bloisi et al. (2007, p. 710) defines
organizational structure as a “grouping of people and tasks into different units to boost
coordination of communication, decisions, and actions.” As of now, Toyota Motor
Corporation (TMC) is using Centralized structure whereby the Top Management has the
power to organize as well as to take decisions. As a result, the lower level management
is concentrated.

Diagram 1

However, as centralization structure works best for small organizations and currently it
is not efficient for TMC as it is a large company. Moreover, as mentioned in the case
study,…”authority is not generally delegated within the company…” In fact, TMC does
not delegate the work as the Japanese managers may not have enough confidence in
his subordinates and he may be assuming that the subordinates are incapable of taking
decisions on their own. Moreover, there is also a narrow span of control as the
managers have more tasks compared to the subordinates. However, when the
employees are closely supervised, they can be demotivated and unable to perform. As
per the Corporate Finance Institute,” employees are merely implementers of decisions
made at a higher level.” In fact, according to Panmore Institute “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.”Therefore, the current organizational structure is not efficient for the
proper functioning of TMC.

THE CHANGES IN FIVE YEARS

It has been analyzed that TMC has been facing much failures during and the fact that
they could not appear in public shows the level of poor delegation of authority within the
company. The possible changes that TMC should bring are technology, decentralization
as well as matrix organizational structure. For instance, technology has always been a
crucial part in a competition driven domain. Also if TMC wishes to benefit from
competitive edge, it certainly has to keep updates on new technological trends thus they
need to make modifications frequently. By keeping updates on the latest technological
developments, TMC may keep track on their strategies as well as their actions.
Moreover, as it has been mentioned in the case study that vehicle recalls have been
present in Toyota for a very long time. Therefore, the correct use of technology could
put an end to these unreasonable safety risks.

Additionally, it is beneficial for TMC to adopt decentralization structure for its growth. In
fact, decentralization refers to the spreading of powers by the top management level to
the low management level. This allows all levels of management to delegate the work.
Also, as TMC is a huge company, decentralization is suitable for the proper functioning
of the company. This structure may boost motivation level in the lower level managers
and may also enhance their level of job satisfaction. As we can see in the case study,
no Toyota executive in United States to issue a recall, it slows the process of resolving
the issues instantly. Additionally, the subordinates will be able to develop managerial
skills and they will take decisions faster as well as accurately as they will be aware of
the current situation. Also, communication becomes easier between the top level
managers and the low level managers. As far as it concerns the executives in the
United States, they will not feel watched over at all times and they will be able to take
decisions and solve problems. Besides, they may also feel motivated to work while they
can supervise the tasks with enough authority. On the other hand, the top level
managers can focus in more important matters thus reducing the burden of work on
their shoulders.

Apart from these, TMC can adopt a new organizational structure that is Matrix Structure.