Toyota Organizational Structure and Design

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1.0  Statement of the problem

            For the last decade, Toyota Motor Corporation (TMC) has enjoyed an enviable position in the automotive industry thus being referred to as the gold standard.  In reality, TMC owes much of its success to its well-structured manufacturing system that reflects the principles set by the Toyota Quality Management (TQM). Nonetheless, the real problem threatening the success of TMC is the centralization of services as most of the critical company decisions are made under the Japanese-controlled organizational structure. For instance, TMC can be described as a highly centralized organization such that the power of decision-making is not delegated to its operations such as in the USA. Therefore, due to such circumstances, the management of a company fails to gain the trust of the consumers as well as the business world (Bateman et al., 2015).

2.0  Analysis and Evaluation

            During the time of crisis, it became apparent that Toyota Motor Corporation (TMC) was a highly centralized organization that despite the United States representing two-thirds of the company profits all decisions regarding operations were made in Japan. As such, due to the Japanese-controlled organizational structure, TMC had not delegated decision-making power or authority to its executives in the United States. For that reason, at any point TMC was faced with a quality issue concerning the recall of vehicles, it was required that the final decision would be communicated by the company's headquarters albeit the process is vulnerable to high bureaucracy levels. In consequence, it was impossible for the company executives stationed in the United States to issue a recall for affected vehicles. It is imperative to state that most of the information communicated to the headquarters was one way since the top hierarchy of the company often dismissed the quality claims fronted by the lower management. Consequently, TMC proved to have gradually become too centralized and too bureaucratic as such this fronted the company with a lot of backlash from its customers as well as a vulnerable market position.

            And so, it is imperative that TMC adopts a structural design that will prove to be appropriate both in the short-term and long-term as the company gets affected by the various changes in the external environment. For that reason, Bateman et al. (2015) assert that business growth substantiates the need to decentralize operations so that to maintain efficiency in operations in regards to the changes in the external environment. Therefore, TMC should adopt decentralization as an organization structure since it advocates for delegation of decision-making responsibilities affecting the daily operations of a company by the top hierarchy to the lower management cadre. Decentralization of authority and decision-making powers allows the top management of a company to remain focused on the major decisions concerning the economic aspects of the external environment (Bateman et al., 2015). In consequence, decentralization will front the top management of TMC with various advantages even though relinquishing control of pertinent issues...