Toyota Motor Corporation

Toyota Motor Corporation engages in the manufacture and sale of motor vehicles
and parts. It operates through the following segments: Automotive Operations, Financial
Services, and All Other. The Automotive Operations segment designs, manufactures,
assembles and sells passenger cars, minivans, trucks, and related vehicle parts and
accessories. It is also involved in the development of intelligent transport systems. The
Financial Services segment offers purchase or lease financing to Toyota vehicle dealers and
customers. It also provides retail leasing through lease contracts purchase by dealers. The All
Other segment deals with the design and manufacture and sale of housing,
telecommunications and other businesses. The company was founded by Kiichiro Toyoda on
August 28, 1937 and is headquartered in Toyota, Japan.
Planning Process in Toyota

1. Setting goals
Toyota has identified specific company objectives is to achieve simultaneously high
quality, low cost, short lead times, and flexibility. Having a clear objective in mind makes
people less doubtful to their actions since there is a goal they can refer to.

Darwin D. Ambalong (BS AIS)

Toyota Motor Corporation

2. Develop commitment 
Then, the leaders try to motivate their employees because goals don’t encourage them
to worker harder or smarter. Thus, they were armed with their shop-floor knowledge,
dedicated engineers, managers, and workers who would give their all to help the company
succeed. Things like praises and rewards do so much more than one actually realizes.
3. Develop effective action plan
They move to next step of planning is to develop effective action plans to their
objectives. Toyota lists the specific steps (how), people (who), resources (what) and time
period (when) for accomplishing a goal. A plan is systematic and should be followed
thoroughly, one does not go in a bath tub without filling it with water first.
4. Track progress toward goal achievement 
After completing second step, they use the method of tracking progress toward goal
achievement to get more motivating and rewarding and then gather and provide performance
feedback to make adjustment in efforts, direction and strategy that will lead to dramatic
increase in performance. A simple reminder that one's effort are bearing actual results makes
a difference both in motivation and outputs given.
5. Maintain flexibility
Finally is maintaining flexibility, which is the key to their operations. They learned
from experiences and failures and improve them to satisfy their customers and get the best
productions. Everyone trips and falls but only fools stay on the ground,not even bothering to
look above.
They accept challenges with a creative spirit and the courage to realize their own
dreams without losing drive or energy. They approach their work vigorously, with optimism
and a sincere belief in the value of our contribution. Furthermore, they strive to decide their
own fate. They act with self-reliance, trusting in their own abilities. They accept
responsibility for their conduct and for maintaining and improving the skills that enable them
to produce added value. Toyota understands that in a typical business system, meeting and
exceeding the customer’s requirements is the task of everyone within an organization. And
they comprehended the definition of customer to include both internal and external
customers. Each person or step in a production line or business process was to be treated as a
customer and to be supplied with exactly what was needed, at the exact time needed.

Darwin D. Ambalong (BS AIS)

Toyota Motor Corporation

Toyota’s 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.
Toyota Motor Corporation’s organizational structure defines the patterns or
arrangements in the firm’s resources and processes. This corporate structure facilitates the
company’s effective and efficient business management.
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:
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

Darwin D. Ambalong (BS AIS)

Toyota Motor Corporation

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.

Leading in Toyota
There are several external and internal factors to consider as Toyota’s management
use leading. Focus on the four functions are: globalization, technology, innovation, and
diversity.
In the Toyota production system and the Toyota way, let us know it is to provide
employees a tool, so that they can continue to improve the working system, Toyota model
just leaned more on employees, rather than reduce dependence on staff. Toyota way is a kind
of culture, rather than just a set of improved efficiency and improvement tools and methods,
you must rely on employees to reduce inventory, find out the hidden problem, and solve the
problem, employees have a sense of urgency, purpose, and the concept of teamwork, because
if they can’t solve the problem, inventory shortage situation occurs. During the daily
operations, engineers, suppliers and supervisors, and workers, are all involved in problem
solving and continuous improvement work, over time, everyone was trained to be more
effective to solve the problem. Facilitate and strengthen the team cooperation spirit, must rely
on the necessary help, training and reward. To encourage employees to properly maintain and
continuous improvement process and the workplace environment.
In Toyota, executives often encourage and help their employees. In any staff when in
trouble, both the boss and colleagues, they will go to provide the corresponding help to get
the job done. Because they think the team spirit is important. This not only allowed them to
finish the work smoothly, also make them in leading to high personal accomplishment. And

Darwin D. Ambalong (BS AIS)

Toyota Motor Corporation

technology allows management to be leaders and to motivate their employees by sending

congratulations e-mails to the top sales employee or by telling them what they have earned if
they sell a specific amount of vehicles. Motivating employees helps keep the morale strong,
and the Internet helps communicate motivational messages across different countries and
departments.
The important points of leading not only inspiring employees, but also
communication with customer. In Toyota, they figured out to develop a new customer is
equal to six old customers. To keep an old customer, by loyalty. Loyalty will be made for our
customers bring more publicity, this is the most effective free advertising. A large number of
cases and the fact that the wealth of the enterprise’s bring for loyalty customer. With a old
customers have a good communication is very important. However how to develop new
customer? The manager organizes information using technology such as the Internet, which
the customers can search more information regarding their vehicles and their prices. They
also organize information for the employees so they can see new information which is out,
such as the recall on the Toyota vehicles. Then they can tell their customers what to expect
and how to handle the situation.
In Toyota Company, managers give information to employees and customers. At the
same time they will get employees and customer feedback from various aspects. This way
make the managers understand the difficulty of employees and the company is what aspects
need to improve and progress. The conversation with customer to understand customer needs,
how to do let customer satisfaction products. You can also change many of the after-sales
service is the need to increase.
Toyota Quality Control
I. Know Your Suppliers
II.                The Compliance Oversight Committee
III.             Don’t Let Growth Overwhelm You
IV.              Lessons for the Compliance Practitioner
MOTIVATION PRACTICES IN TOYOTA
Basically, Maslow’s Hierarchy of needs is pyramid of different levels of needs. The
base at the lowest is Physiological needs, the next is Safety needs, Love & Belonging, then
Esteem and the highest level is Self-Actualization (Please refer to Figure 1 for more details).
Only when lower levels of needs such as physiological and safety are satisfied, then
employees can achieve higher levels such as esteem and self-actualization, which make them
work more efficiently, with more drive and more innovative ideas.

Darwin D. Ambalong (BS AIS)

Toyota Motor Corporation

FIGURE 1 – MASLOW’S HIERARCHY OF NEEDS.

Retrieved from http://www.bzzzworks.com/images/infographics/maslow_pyramid.png
For Physiological & Safety needs:
According to Liker (2004, p.210), all employees of Toyota are satisfied in lower level
needs, they are well paid, their jobs are secured and the working environment is safe and
organized. Besser (1995, p.390) also stated that Toyota provided child care and recreational
facilities available on site for employees. All these benefits were provided to ensure their
employees are safe and secured to work for a higher level of needs, which brings more
results.
For the Needs of Belonging:

Darwin D. Ambalong (BS AIS)

Toyota Motor Corporation

Besser (1995, p. 390) described the way Toyota promoted a strong team spirit and
sense of belonging is by showing no discrimination between team members; or between
managers and employees. In particular, “There are no private parking facilities, private
cafeterias for managers, private offices, or private secretaries. All staff are encouraged to
wear the company uniform and are called by their first name” (Besser, 1995, p.390). This
practice makes employees really feel that they are a part of a community and creates a strong
bond between employees and the company.
For Esteem & Self-Actualization:
Toyota also encourages its employees to try to solve challenging problems to build up
their confidence so that they can satisfy their higher needs in esteem and self-actualization.
Also, by using a ratio of team leader to team members of 1 to 4, or 5; comparing to 1 to 20 or
30 in the industry, Toyota created 4 to 5 times the promotion opportunities for employees
(Besser, 1995, p. 393). Ambitious workers are also promised that their assembly line jobs are
temporary and after being promoted to team leader, they would receive a lot of training and
job rotation opportunities.
All employees are also encouraged to solve daily work problems innovatively, they
would receive gift certificates for their ideas contribution.
References:
Besser, T. (1995, May). Rewards and Organizational Goal Achievement: A Case Study of
Toyota Motor Manufacturing in Kentucky. Journal of Management Studies, 383-399.
Bodek, N. (2008). Toyota managers know the road to Lean is by way of
motivation. Retrieved at http://web.ebscohost.com
Liker, J. K. (2004). The Toyota Way: 14 Management Principles from the World’s Greatest
Manufacturer. Madision, Wisconsin, USA: McGraw-Hill.
Liker, J. K. (2004). The Toyota Way: 14 Management Principles from the World’s Greatest
Manufacturer. Madision, Wisconsin, USA: McGraw-Hill.
Liker, J. K., & Meier, D. P. (2007). Toyota Talent – Developing Your People The Toyota
Way. Chicago, United States of America: McGraw-Hill. doi: 10.1036/0071477454
http://panmore.com/toyota-organizational-structure-analysis
Toyota Motor Corporation (2012). June 15, 2012: Last Organizational Chart.
Toyota Motor Corporation (2013). TMC Announces New Organizational Structure and
Executive Changes.
http://fcpacompliancereport.com/2011/07/toyota-quality-control-and-a-best-practices-
compliance-program/

Darwin D. Ambalong (BS AIS)