1. What changes in the organizing facet of the P-O-L-C framework might you make
ID: 390731 • Letter: 1
Question
1. What changes in the organizing facet of the P-O-L-C framework might you make at Toyota to prevent future mishaps like the massive recalls related to brake and accelerator failures?
2. Do you think Toyota’s organizational structure and norms are explicitly formalized in rules or do the norms seem to be more inherent in the culture of the organization?
3. What are the pros and cons of Toyota’s structure?
4. What elements of business would you suggest remain the same and what elements might need revising?
5. What are the most important elements of Toyota’s organizational structure?
7.1 Case in Point: Toyota Struggles With Organizational Structure Figure 7.3 Toyota Motor Corporation (TYO: 7203) has often been referred to as the gold standard of the automotive industry. In the first quarter of 2007, Toyota (NYSE: TM) overtook General Motors Corporation in sales for the first time as the top automotive manufacturer in the world. Toyota reached success in part because of its exceptional reputation for quality and customer care. Despite the global recession and the tough economic times that American auto companies such as General Motors and Chrysler faced in 2009, Toyota enjoyed profits of $16.7 billion and sales growth of 6% that year. However, late 2009 and early 2010 witnessed Toyota's recall of 8 million vehicles due to unintended acceleration. How could this happen to a company known for quality and structured to solve problems as soon as they arise? To examine this further, one has to understand about the Toyota Production System (TPS) Source: Photograph courtesy of Toyota Motor Sales, USA, Inc. TPS is built on the principles of "just-in-time" production. In other words, raw materials and supplies are delivered to the assembly line exactly at the time they are to be used. This system has little room for slack resources, emphasizes the importance of efficiency on the part of employees, and minimizes wasted resources. TPS gives power to the employees on the front lines. Assembly line workers are empowered to pull a cord and stop the manufacturing line when they see a problem.Explanation / Answer
1.Toyota needs to have a committed team and best professional to make its products. Just in Time mechanism holds well but the same has to be made sure with suppliers and vendors that their products do well when assembled. Also there needs to be risk assessment team formed to assess the risk and manage it in times it is needed which can coordinates with top management fr solution of any problem at budding stage.
2.Toyota’s organizational structure and norms are explicitly formalized in rules and Toyota needs to revamp its structure and makes sure that Toyota stands by the values and that should be seen in its structure.
3.The pros of Toyota structure is that it has all its board from japan and that the decision making at level of boards are easier as all of them can reach to any decision quikly. The cons are that it follows a rigid corporate structure and that passing of important relevant information to top management becomes hard and are not effective as it involves lots of time and only few can do this work.
4.The hierarchy system shall be removed in the company and corporate structure shall be changed to more dynamic and suiting the present trend and needs for efficient and fast decision making. The management at other countries must be given powers and authority to regulate and authorize recall, improve, maintain relations etc. with supervision of boards.
The good things to keep are its product quality, customer relations and risk management team that acts efficiently managing past recalls and defects. These elements of Toyota are important shall remain the same.
5. The most important elements of Toyota’s organizational structure is its hierarchy, rigidity and transparency.
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