Organizational Structure Term Paper Example | Topics and Well Written Essays - 1250 words

Organizational Structure - Term Paper Example Therefore, top managements give particular importance to their organizational structures while planning and implementing business strategies. This paper will analyze the organizational structure of Toyota Motor Corporation (TMC) with specific attention given to its organizational functions and organizational design. Toyota: Organizational Structure Toyota has a unique organizational structure that has assisted the company to dominate the automobile industry throughout its corporate life. As Borowski (2010) points out, the General Meeting of Shareholders is the governing body of Toyota and the shareholders have a voting right in the General Meeting if they hold a minimum amount of shares. Toyota’s executive body is its Board of directors consisting of 26 members. The company’s Board of Directors comprises of the chairman, the vice chairman, the president, 8 executive vice presidents, 13 senior managing directors, an honorary chairman, and a senior advisor. In addition, t here are four committees that belong to the director board, including the Labor-Management Council, the Corporate Philanthropy Committee, the Stock Option Committee, and the Toyota Environmental Committee. The Toyota headquarters manages and coordinates 229 divisions (pp.3-4). Market analysts indicate that Toyota’s organizational structure greatly assists the company to facilitate effective strategic implementation. Referring to the views of Moore (2011), long term-thinking is central to the company’s organizational philosophy. The company management promotes the long-term thinking sometimes even at the expense of short-term financial gains. The author opines that this strategy has significantly benefited the organization to make potential management decisions and to enhance organizational learning (pp.141-143). Toyota’s strong organizational structure aided the company to earn $16.7 billion in profits and 6% sales growth in 2009 in spite of global financial cri sis 2008-09 that had severely hit the global automaking industry. Recently, the TMC has announced some noticeable changes to its organizational structure. As Bloomberg (March 6, 2011) reports, appointment of outside board members is one of the major changes declared by the company. Business unit organization is another change announced. Through this structural change, the company’s automotive business will be split into four distinct units namely Lexus International, Toyota No. 1, Toyota No. 2, and Unit Center. The company believes that this change would well define operations and earning responsibility and would fasten decision making. The TMC has also announced the reorganization of region groups in order to improve its products and services in growing markets. While comparing the organizational structure of General Motors to that of TMC, it seems that GM’s organizational structure is very weak and this issue ended up in the bankruptcy of the GM, the world’s s econd largest automaker. The company delivers its products and services through the seven divisions including Buick, Chevrolet, Cadillac, GMC, Opel, Holden, and Vauxhall. It is identified that the company’s operations are not well coordinated and there is no proper communication mechanism to facilitate up and down information flow across various management levels. As a result of a weaker organizational structure, the GM failed to address operational flaws in a timely