Structure of Organization - Assignment Example

Pham Hoang Hien enumerates the advantages and disadvantages of MultiDivisional Structure. (Hien, 2010). Advantages: Increased organizational effectiveness, due to a division of labor between corporate and divisional managers Increased control, because corporate managers monitor divisional managers and make comparisons Profitable growth, because capital can be allocated to division with the greatest potential return on investments An internal labor market, because good divisional managers are promoted to corporate manager Disadvantages: Determining what authority to centralize or decentralize from the corporate to the divisional level.

Coordination problems from uncooperative divisions competing for resources. Determining transfer pricing, the price of a product or service sold by one division to another Higher bureaucratic costs Distorted information, resulting in communication problems. 3. Is your organizational experiencing any particular problems in managing its activities? Can you suggest a more appropriate structure that your company might adopt to solve these problems? Ans. Definitely, Toyota is experiencing problems or organizational dysfunctions in certain levels of coordination and communication in the corporate particularly when there is confusion in authority whether to centralize and decentralize from corporate to the divisional level.

A clear manifestation of this is the undetected defect in the design of accelerator pedals, among others, which brought about the worldwide Recall Campaign. Another is TMC’s too much formalities and rigidness or strictness in the corporate norms, rules, and policies of the company which is pointed by some to become a probable cause for generating organizational dysfunctions. John Shook critiqued TMC with the following: “So, a degree of "toughness" may be called for at times, especially in the dirty business of manufacturing something like a car.

The process of several thousand people working together to assemble tens of thousands of parts that converge once per minute to comprise an automobile is tough work, demanding legitimate discipline. Still, there were instances at the old Toyota when many observers would understandably cry foul. And I imagine vestiges of that Toyota can still be found lurking around, especially at the end of a bad day. But these are also dimensions of the company that decades ago some leaders recognized as needing change ” (Shook, 2009).

Finally, I would still suggest to still retain the same structure. Although a thorough assessment of their organization is an immediate initial and necessary step that the organization has to undergo. Everything has to take root to develop the necessary capabilities and culture.