Toyota Case Study

There are several organizational structures that can be implemented by organizations. These organization structures are from two different viewpoints, traditional and contemporary. The traditional models such as hierarchies and bureaucracies are founded on the assumption that organizations exist in a basically calm environment, with changes occurring only as the

Structure is the basis through which an organization seeks to create control the direction of an organization. This is completed through clear definitions of the allocation of work, differentiation, and the coordination of having those responsibilities working together towards the efforts of the organization, integration (Bolman & Deal, 1993, pp). Through these methods, the organization is able to devise a division of labor that collaborates to bring about the missions and goals of an organization. The structure that comes about from this can be varied in their rigidness and flexibility it allows, and to an extent this is a great contribution to its success.

The mechanistic organizational form, or bureaucracy, is a structure that is high in specialization, formalization, and centralization. It was the natural result of combining the six elements of structure. While organic organizational form, is an adhocracy. It is a structure that is low in specialization, formalization, and centralization. Organic organization is highly adaptive, loose and flexible. The loose structure allows organic organization to change rapidly as required.

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The organizational structure is a framework that a company uses to differentiate authority and roles, and the way information flows. Organizational structure is divided into two forms: mechanistic and organic structures. Mechanistic structure is used in modernism where there is high degree of differentiation (numbers of levels in hierarchy- vertical and horizontal), centralization (lower levels have to report to top management), standardization (bureaucracy and standard process), formalization (rules), specialization (division of labor to do only specific task) and low integration (low coordination of activities) between functional designs. Modernism has tall organizational structure as it consists of many hierarchical levels. Mechanistic structure is used in stable companies such as universities and government organizations. According to Adam Smith, division of labor can produce economic

Toyota Motor Manufacturing, U.S.A. (TMM) is deviating from the standard assembly line principle of jidoka in an attempt to avoid expenses incurred from stopping the production line for seat quality defects. This deviation has contributed to the inability to identify the root cause of the problem, which has led to decreased run ratios on the line and an excess of defective automobiles in the overflow lot for multiple days. If this problem isn’t fixed quickly, an increased amount of waste will continue to be incurred and customer value will be threatened.

According to the case study Nissan has a pacific product line compared to its competitors. Nissan uses a build to stock method for some models of vehicle, while the rest of the methods of vehicle are building to order. This style of operations management should save the company money. There is an example of this found in the Nissan case study on page 4.

Toyota today is one of the leading lean example in today’s manufacturing market. Starting back in the 1930’s with the idea of Just-in-Time to cut down cost in waste from overstocked storage rooms to a better efficient assembly lines who produced what was needed at a certain time. The Kanban system is one of the most used methods that the Japanese found during the 1950’s during a trip to United States in a super market.

Supply chain management (SCM) is a core part of organizational effectiveness in order to achieve goals characterizes efficiency. Globalization and international agreement led Toyota to develop it is SCM process to increase outsourcing supply raw materials from foreign market that are low cost and high quality.

Toyota Motor Corporation or Toyota in short, is a Japanese automaker. It is the world's second largest automaker behind General Motors. However it ranks first in net worth, revenue and profit. It is also the only car manufacturer to appear in the top 10 of the BrandZ ranking. The company was founded in 1937 by Kiichiro Toyoda as a spinoff from his father (Sakichi Toyoda)'s company Toyota Industries to create automobiles.

We will start the external analysis with the PESTEL analysis of the automotive sector followed by the Porter’s five forces analysis and we will end by having a look at the key competitors and competitor pricing.

Toyota is a key player in global automotive market. Its structure constitutes if various production plants in different locations and a very strong branding which helps it capture a major market share. Like other enterprises, Toyota has several strengths and weakness which makes it what it is now. Toyota heavily invests in Research and development which helps it come up reputable product line which is spread out throughout the world because of its strengthening global distribution network however its recent product recalling, loose grip in key geographic areas and wrong allocation of resources shows that even a strong brand like Toyota has its weaknesses.

By 2007, Toyota was leading its industry as the largest automotive manufacturer in the world. Operating under a strong growth strategy, their reputation for exceptional quality and high safety ratings coupled with operational efficiency promoted their competitive advantage. Furthermore, Toyota was principally the symbol of excellence and a benchmark for every other company. When examining their strategy under Porter’s model Toyota maintains a strong combined plan focusing on both cost leadership and broad differentiation. Through the process of lean daily management and just-in-time delivery Toyota led the manufacturing world with a distinguished level of efficiency. Examining their success and processes, manufacturing was transformed and Toyota was the envy of many. Additionally, through innovation Toyota actively sought differentiation as a generic tactic. Hybrid technology was successfully implemented into their Prius model vehicles and the Prius became the first, pioneering mass-produced vehicle of its kind.

The Organizational environment refers to the forces that can make an impact. Forces made up opportunities and threats. Organizations do not exist in isolation. It works with the overall environment. Scholars have divided these environmental factors into two main parts as.

It is a pattern of interaction and co-ordination that links technology tasks and human components of the organization to ensure that the organization accomplishes it purpose. (Andrzej A Huczynski, David A.Buchanan, 2007) .Organizational structure allows the expressed allocation of responsbilities for different functions and processes to differrent entites. Employing of individuals in an organizatuonal structure normally is contracted either timely or untimely basis.while process are aimed at