Principle of Engineering Management

M. Usman Hassan
01-246191-009
MS Engineering Management
Submitted to: Dr. Muhammad Ismail Ramay

Introduction:

Toyota Motor Corporation is a Japanese multinational automotive manufacturer headquarter in

Toyota City, Aichi, Japan. In 2017, Toyota's corporate structure consisted of 364,445 employees
worldwide and, as of September 2018, was the sixth largest company in the world by revenue.
As of 2017, Toyota is the world's second-largest automotive manufacturer. Toyota was the
world's first automobile manufacturer to produce more than 10 million vehicles per year which
it has done since 2012, when it also reported the production of its 200 millionth vehicle. In
July 2014, Toyota was the largest listed company in Japan by market capitalization worth more
than twice as much as number 2 ranked Softbank and by revenue.

Toyota is the world's market leader in sales of hybrid electric vehicles, and one of the largest
companies to encourage the mass market adoption of hybrid vehicles across the globe. Toyota is
also a market leader in hydrogen fuel cell vehicles. Cumulative global sales of Toyota and Lexus
hybrid passenger car models achieved the 10 million milestones in January 2017. Its Prius
family is the world's top selling hybrid nameplate with over 6 million units sold worldwide as
of January 2017.

Toyota Organizational structure

Toyota Motor Corporation’s organizational structure is based on the varied business operations
of the company around the world. As one of the world’s leading automobile manufacturers,
Toyota employs its organizational structure to support business goals and strategic direction.
This structure is also linked to the traditional organizational structures used in Japanese
businesses. The effectiveness of Toyota in maintaining a strong global presence shows its ability
to use its organizational structure to maximize efficiency and capacity utilization. In essence,
this organizational structure is a contributor to Toyota’s success in the global market.

Features of Toyota’s Organizational Structure

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, Toyota’s new organizational structure
now has the following main characteristics:

1. Global hierarchy
2. Geographic divisions
3. Product-based divisions

Global Hierarchy:

Toyota still maintains its global hierarchy despite its reorganization in 2013. However, in
the current organizational structure, the company has increased the decision-making power of
regional heads and business unit heads. In essence, Toyota’s decision-making processes became
less centralized. Nonetheless, all business unit heads report to the firm’s global headquarters in
Japan.

Geographic Divisions:

Toyota’s new organizational structure has eight regional divisions (Japan, North
America, Europe, East Asia and Oceania, China, Asia and Middle East, Africa, and Latin
America and Caribbean). Each regional head reports to the company’s headquarters. Through
these regional divisions, the organizational structure enables Toyota to improve products and
services according to regional market conditions.
Product-based Divisions:

Another feature of Toyota’s organizational structure is the set of product-based

divisions. The company has four of these divisions: (a) Lexus International, (b) Toyota No. 1 for
operations in North America, Europe and Japan, (c) Toyota No. 2 for operations in all other
regions, and (d) Unit Center, which is responsible for engine, transmission and other related
operations. This feature of Toyota’s organizational structure supports development of brands
and product lines.

Implications of Toyota’s Organizational Structure

Toyota’s new organizational structure provides a greater degree of flexibility compared

to the old centralized hierarchical organizational structure. With this new structure, the
company is now more capable of responding to regional market conditions. This flexibility
empowers Toyota to speedily respond to issues and to provide higher quality products.
However, the increased decision-making power of regional heads has reduced headquarters’
control over the global organization. Still, this organizational structure facilitates business
resilience and continued growth.

Management and Leadership at Toyota Motor Corporation

As Toyota Motor Corporation (TMC) is one of the leading automobile manufacturers in the
world. The name itself inspires trust in the brand and for many people around the world,
purchasing a vehicle manufactured by Toyota is also a sound investment.

Toyota’s leadership model is based in teamwork, collaboration, and consensus. A leader

at Toyota exists to serve the organization not the other way around. Because this is the culture
of Toyota a leader is let go quickly if his or her limitations or flaws imperil the organization in
some way. The organization, customers, and employees always come first.

Roles and Responsibilities of Organizational Managers and Leaders Managers and

leaders play significant roles and have huge responsibilities in creating and maintaining a
healthy organizational culture. The role of an organizational manager or leader is to focus on
fundamentals, what is a priority, and what works. Managers or leaders are also responsible for
the focus on long-term issues, and the future of the organization. Managers and leaders are the
barometer of the business. What he or she promotes becomes policy. If a manager or a leader
promotes a dishonest practice, it becomes policy. If a manager or a leader promotes an unethical
practice, it becomes policy. So here some few types of leaderships have been seen in Toyota
Motor.

Transformational Leadership:

Transformational leadership is the style of the direction in which the chief identifies the
change necessary, creates a vision to direct the change with the inspiration, and carries out the
change with the commission of the members of the group.
 Toyota uses a program of the management of credit of the vital cycle to protect from the
corporative credits. By taking this innovating bringing together, Toyota makes sure that the
corporative credits reach or exceed their useful life expectancy. They reached an employers’
sight of the EC what it can be differed, and for how long, as they estimate the impact of a
reserve suggested. With proven results, Toyota revealed strong operation of the credit in a
difficult economy by having the information which needs to make suitable adjustments of the
percentage of availability and the reductions with their operation project.

The transformational leadership functions especially well in the close relations of

supervision, compared with more distant relations, and a closer supervision is often more
typical in mental adjustments of health.

The four functions of management: planning, organizing, leading, and controlling are
central to the operation of any business, and Toyota is no exception. In fact, the very foundation
of management at Toyota is based in “Meikiki.”

This means simply foresight and discernment and Toyota as well as other Japanese
businesses are deeply entrenched in this philosophy. Toyota is a people-based management
system; Taiichi Ohno was the person who realized “production depended on people, not just
machines” and with that concept in mind Toyota allows its workforce to stop the production
line if one sees a problem. This perception is alien to American culture whether it is in
manufacturing or banking because business in America is still primarily top-down. Many
businesses follow Toyota’s management model.

A team member or a boss and according to Bateman and Snell the greater the following,
the greater the influence. Toyota’s leadership model is based in teamwork, collaboration, and
consensus. A leader at Toyota exists to serve the organization not the other way around.
Because this is the culture of Toyota a leader is let go quickly if his or her limitations or flaws
imperil the organization in some way. The organization, customers, and employees always
come first.

The organizational culture of Toyota stresses continual improvement and the role of
management and leadership is to model this behavior. The “Toyota Way” is toward lean
production, but globally Toyota may be too provincial and not as open as Western businesses
are and that may be why it took so long to admit fault with the accelerator problem. Therefore,
the organizational culture of Toyota is drastically different from the organizational culture of
Western businesses and the public relations catastrophe caught this normally staid, unassuming
organization by complete surprise. Toyota had trouble negotiating the “publicity landscape”
because it was not accustomed to aggressive media and consumer groups. Toyota had an air of
detachment about its responsibility; however, the lack of communication on Toyota’s part was
cultural differences not detachment. Communication was just the last thing Toyota
management thought of.