Name: Farhan Javaid

ID: 31744

Course: Organizational Theory & Design

Instructor: Raja Waqas

 Toyota
Introduction:
Toyota is a car manufacturer company. Manufactures all categories of cars. Found
by Kiichiro toyoda in Japan in 1937. Toyota is known in the big companies in
automotive industries in the world. The production of Toyota automobiles was
started in 1933. Its first vehicles were the A1 passenger car and the G1 truck in
1935. Toyota came to pakistan in 1989 and owned by Indus motors in Pakistan.
Toyota is the known as the best car companies in pakistan till now.
Structure & design:
1) Complexity:
Historically, Toyota has been quite adept at managing the complexity required to
deliver industry-leading quality and profitability. However, in the past 5-6 years,
the company reached a point where rapid growth, challenging product
requirements and multifaceted operations combined to raise the complexity level to
a point where traditional strategies and norms were no longer as effective. Toyota’s
complexity is based on many factors such as the large number of product variants,
extensive global operations, intricate production systems, and convoluted
processes and structures. Company executives have been aware of the problems
but were unable or unwilling to prevent them.
2) Centralization:
Toyota is now decentralized company but before toyota was a centralized company
till 2013. Because of the major decisions and other issues. Further I will let you
know that 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. However, this
organizational structure was widely criticized for slow response times to address
safety issues. After the reorganization that was implemented in 2013.
3) Formalization: Toyota’s organizational structure is explicitly formalized in
rules demanding that all company standards are strictly followed. While the inner
structure gives the manufacturer noticeable advantages over its competitors, some
drawbacks undermine the concern’s market reputation. To those drawbacks, one
may refer a slow reaction to external threats, limited communication between
senior and top managers, lack of qualified leaders, and others. For the company to
regain its leading market position, a series of changes need to be implemented
within the P-O-L-C framework: prioritizing quality, altering organizational culture,
rearranging assessment systems, and more.