Toyota 's Management Structure Functional Integration

Decent Essays

One of Toyota’s issues was their lack of organizational culture, perceived or real. Thus, organizational culture is the shared values that are accepted by members of the organization (Bethel, 2016). Unfortunately, Toyota’s corporate culture was one of total secrecy, which left many feeling there was something amiss. Further, “corporate arrogance, complacency, and company insular nature” were evident (Parnell, 2014, p. 603). Additionally, newly appointed CEO Akio Toyoda was invisible, which created contention amongst others in leadership. There seemed to be a belief that family members were focused on safety, while non-family members were focused on profits (Parnell, 2014).

Likewise, Toyota’s management structure lacked functional integration because the functional operating areas reported directly to Japan. Basically, it was top down management structure, which may have led to several of the key issues, which were:
High growth trajectory
Corporate culture
Poor leadership
Management structure
Failure to own mistakes
Focus on cost cutting
Pressure on suppliers to reduce costs (Parnell, 2014).

Clearly, Toyota was in the automobile manufacturing industry and had been for many years. Hence their key competitors included: Honda, General Motors, Ford, Chrysler, Kia, Hyundai, Mercedes Benz, BMW, and Nissan (Parnell, 2014). As with the others in the industry, some of the key risks associated with the auto industry were the impact of the recession, rising costs of

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