Toyota: Dimensions of Organizational Structure Style - Research Paper Example

?Toyota: Dimensions of Organizational Structure 0 Introduction Throughout the history, Toyota Corporation has been demonstrating its capa to make use forward thinking (Frost, 2011). To illustrate, Toyota has not only established a top competitor image in North America but also has become the Global automotive in the international market by utilizing the strategies formulated from all its experiences throughout the years since 1937. The success of the Toyota lies with their ability to understand the individuals who posses several unique capabilities. In addition, their strategies to exploit as many possible talents from the individuals, which in turn created more opportunities for the growth in the corporate market have also added to their competitive advantage. Toyota depicts a positive corporate face in the society while the company itself claims to be ethical in the business sense. 2.0 Organizational Structure As Bauer and Erdogan (n.d.) state, the organizational structure can be used as a powerful tool for influencing the employees’ actions in the same way as the team level factors can be used to develop work approach and performance. The organizational structure of the company shows how the performances of the individuals and teams within the firm are coordinated. For the purpose of achieving the organizational goals and objectives, the work requirements of the individual are to be organized and supervised. The structure of the organization serves as a tool in maintaining coordination, defining channels, and describing how well the independent actions of individuals can be linked together. Dimensions According to Paugh et al (1968), the primary dimensions of organizational structure are defined and operationalized as (1) speculation, (2) standardization, (3) formalization, (4) centralization, (5) configuration. These dimensions help in constructing the profile characteristics of the organizational structure of the firm and enable the comparison of the structure with that of the competing organizations. These key dimensions structure the activities, control the concentration of authority, and maintain the workflow and size of supportive component. In the same way, firms use terms, formats, and concepts while constructing the organizational structure. Some of the key terms (Montana & Charnov, 1993) used in the organizational structure are; Departmentalization: - The activity of grouping the similar functions into controllable segments for the purpose of efficient and effective accomplishment of the objectives Delegation: - It is the duty that a manager performs to bestow his subordinates with responsibility and authority and to create accountability on the workers for results. Centralization: - It is the situation where a limited amount of authority is delegated within the organization. Scalar Principle: - It is the chain of authority within the organization which flows down from the command of the top level to the lowest level. Decentralization: - This is the situation where much of the authority is being delegated to the lower levels in the organization. Contingency approach: - this is an approach to the organizational structure, stating that the structure is depended on the environment, technology, and many other dynamic forces. (Source: Montana & Charnov, 1993). The organizational structure of a company contributes to the management in speeding up the innovation procedures in the market where fast innovations are on their pace. The Toyota Motors have constructed an effective and efficient organizational structure which facilitates their innovations faster. The diagram of the Toyota Manufacturing Organizational Structure is illustrated below. The Organizational Structure - Toyota (Source: TOYOTA) 3.0 Organizational Structure Design The organization maintains a cross-functional team which focuses on a project or product and formulates clear goals and objectives for the new planning program, making the team accountable for the results. The Toyota has never paid attention to the compromise between two separate designs of functional organization and the product organization. The success of Toyota lies in the management and combination of the strong functional organization on deep specialization with the Chief Engineering system as the other leg of the matrix; and the use of intense customer focus combined with the CE system is the secret behind the suitable combination of functional organization with matrix organization (Stamenkovic.se.). This helps matrix work in harmony with the functions. Matrix organization design is used in the company to balance the advantages of product-based and traditional based structures. As Roussel et al (2006, p. 135) point out, the employees are formed together in a project team but also required to report to the department manger; and In the matrix design, the product managers have the control over the matters relating to production and the department managers have the control over things that are related to company policy. The matrix system is formed in a situation where uncertainty occurs regarding the dynamism of the environment, and when the ultimate attention is needed towards a particular project. Using the matrix system increased the communication and cooperation among the various departments as the department managers are required to coordinate their works with that of the project managers. This system had the advantage of providing the quick reaction to technical problems within the department. The availability of the project manager maintains a concentration on the product or service provided. The matrix organizational design can be illustrated as follows: The Matrix Design (Source: Chapter 7. Organizational Structure and Change) 4.0 Conclusion The matrix organization of Toyota has worked incredibly for decades. However, as the company expanded, the products became so diversified; and the functional specialties of the company got propagated. After long years of fine tuning, the company ultimately reorganized it around three development departments. This was restructured once more with the Lexus program, having each of the three vehicle development departments handling different product family of vehicles. For increasing the efficiency of the project team, it is advisable that the Chief Engineer once every two days should make a face-to-face conference with the team on various designs to evaluate the manufacturing functional groups. The Chief Engineer with the experts from the team should formulate strategies and policies to respond to immediate issues and to take on-the-spot decisions. Toyota’s modern high-velocity product development ventures lack the adequacy of flawless teamwork. It is advisable for the company to create a stronger and more intensive involvement between the product engineering and production engineering. The management should put more concentration on the coordination of extra complexity and the firm’s need for speed. The introduction of the module development team (MDT) has helped the company in achieving the objective of adequate coordination to a great extent. The changing environment of business concerns creates the necessity for the newer forms of organizing techniques. So, by understanding this fact, the management should always be keen to make adequate changes in time to maintain the stability of the company. References Bauer, T & Erdogan, B (n.d), ‘Organizational behavior: Organizational structure and change’, Flatworld Knowledge, Viewed 27 July 2011, Frost, R 2011, ‘Toyota “Bypassing” rare earths’, Priuschat, Viewed 27 July 2011, Montana, P & Charnov, B 1993, ‘Organizational structure: Concepts and formats’, Barron’s Business Review Series, pp.1-14, Viewed 27 July 2011, ‘Organize to balance functional expertise and cross-functional integration’, Stamenkovic.se: Professional Lean and Agile Consultant, Viewed 27 July 2011, ‘Organizational structure and change’, n.d, Viewed 27 July 2011, Paugh, DS, Hickson, DJ, Hinings, CR & Turner, C 1968, ‘Dimensions of organization structure’, Administrative Science Quarterly, Jstor, vol.13, no. 1,Viewed 27 July 2011, Roussel, L, Swansburg, RC & Swansburg, RJ 2006, Management and Leadership for Nurse Administrators, 4th Edn, Jones & Bartlett Learning, US. ‘Toyota manufacturing UK- organizational structure’, n.d, Toyota Motor Manufacturing (UK) Ltd, Viewed 27 July 2011, Read More