Significant organizational change at Toyota Electric motor Company

The Toyota Motor Company has always been one of the very most popular vehicle mobile manufacturing companies in the world. They have been in the car developing business since 1937. Kiichiro Toyoda founded the company to manufacture cars. TOYOTA Engine COMPANY has secured the position as one of the largest car making companies on the planet. Their success has evolved from the implementation of the Japanese quality and efficiency. Toyota has always designed faster and more reliable vehicles at a far more economical price with the result that now TOYOTA Motor unit COMPANY is a far more profitable automobile company than another company in the world. In the year 2003, TOYOTA Electric motor COMPANY's annual earnings were $ 8. 13 billion; that more than GM, Ford and Chrysler revenue combined. Toyota has created the "Toyota Production System" and the "Just with time Production" which includes been one of the very most popular management philosophies in the world. The company thinks in continuous improvement and has been in the practice of earning significant organizational changes from time to time. (Jeffrey K. Liker, 2005)

The main reason said to be a major factor in the TOYOTA MOTOR COMPANY's success is they are continuously providing new product and features on the market with speed. The standard with their vehicles is the Corolla whose overall product development and creation led to only 15 weeks. One of TOYOTA Motor unit COMPANY's leading strategies has been to learn from others. They take inspirations from companies like Ford Electric motor Company, quality gurus and commercial engineers. Also the factor that pieces the company apart from its peers is the fact that Toyota Electric motor Company enjoys cost differentiation factor. They provide the same luxuries and benefits in their vehicle and do so at a lower cost compared to other famous companies. (Morgan, Adam M. Liker, Jeffery K. 2006).

"We place the highest value on real implementation and taking action. You can find many things one doesn't understand and for that reason, we ask them why don't you go ahead and take action; try to do something? You understand how little you understand and you simply face your own failures and you simply can correct those failures and redo it again with the next trial you realize another mistake or one more thing that you didn't like which means you can redo it once again. So by constant improvement, or must i say, the improvement centered upon action, one can rise to the bigger level of practice and knowledge. "

- Fujio Cho, Chief executive, Toyota Motor Corporation, 2002 (Ananth Iyer, Sridhar Seshadri, Roy Vasher, 2009).

Some of Toyota's company concepts have been an motivation to numerous companies. Some of them are to generate awareness of the issues, establish capacity to solve the issue, do something protocols, create system recognition in any way levels and encourage the capability to teach.

Significant Organizational Changes:

On 1st January, 2010, Toyota declared a substantial change in their organizational composition within their ongoing improvement policy. Toyota has been recognized to make organizational changes once in awhile to give the company the competitive border in the market. These changes vary from management targets changes to reevaluation of hierarchies in the business. A number of the major changes declared this year 2010 are the following:

For the goal of increasing efficiency and utilizing company resources prudently, the business enterprise Development Unit and Sea Business Department shall now be renamed to Sea and Product Business Division. The sales functions shall also be taken care of by this product.

The Purchasing planning division shall now be restructured into the Purchasing Administrative Division and the Global Purchasing Advertising Division and the Body Parts Purchasing Division shall now be kept up to date to the Purchasing Planning Department. The reason is to combine local and international administrative functions and work on future task management activities and cost efficiency strategies.

The Marketing and advertising Division, Japan shall now come under Toyota Marketing Japan Co. Ltd, a new addition to the Toyota Engine Corporation. The theory is to making the marketplace of Japan the center point of their marketing strategies.

The Sales and Marketing Support Section shall now be integrated to the Sales Augmentation Department to reinforce marketing strategies and activities.

The Strategic Production Planning Department shall now come under the head of Customer Services Procedures Division to improve TOYOTA Electric motor COMPANY's customer services and assure quality benchmarks.

The Tokyo Design Division shall now be called Advanced Design Division to target more on future scientific growths. This division has always been one of the key success factors for TOYOTA Electric motor COMPANY. Toyota has always been known for his or her new and much better technological effort at a comparatively less expensive.

(Toyota, , 2009)

Internal and Exterior Drivers:

Every change is motivated by certain factors that encourage that change. Some of the internal and external drivers that encouraged this change are as follows:

Some of the Exterior Change Drivers are:

These include the external that is the economic, political or natural change factors that drive a firm towards change. In addition they play a major role in the total productivity level of the company.

Increased Competition:

Technology is a field where new initiatives are unveiled very frequently. For any company to take pleasure from competitive edge, they need to be constantly searching for ways to keep themselves modified with the latest technical trends and advancements. They need to constantly make changes and keep on updating themselves. Toyota Engine Corporation is definitely one of those companies that have confidence in continuous change. This gives them a competitive advantage over other companies as they are critiquing their systems, techniques, strategies and actions on an extremely frequent basis. The explanation for this major organizational change was also to keep up that competitive border on the market as competition will keep increasing with time.


Interaction and integration between people across the world is getting nearer and closer daily. As the technology developments, distances decrease. For this reason a company needs to keep up with the latest developments of globalization. Globalization was another main drivers for the organizational change. The societies are actually becoming even more integrated with each other through business and communication. This is the reason why many of TOYOTA Engine COMPANY's divisions that have been previously operating on a nationwide level were developed to provide for global strategies and innovations. This is a difficult job as the consumers of each region are different and have different buying patterns. The duty of the company would be to analyze those habits of each of these companies and then offer product accordingly.

Changes in consumer needs:

Due to recession, there were a great deal of changes in the consumer's buying tendencies patterns. Cost has become a major factor in the buyer buying decisions. Luckily, Toyota has also chosen cost differentiation and enjoyed a central position in that aspect. Customer satisfaction is also become a major matter nowadays and was a primary drivers for the change in the organizational structure. In the new strategy, TOYOTA Motor unit COMPANY has concentrated more on providing quality services for customer satisfaction. That is another major factor is creating brand devotion and goodwill among the client.

Resource scarcity:

Due to recession, there has been a significant shortage in the resources available. The wisest move for just about any company is to effectively and efficiently make use of the existing resources instead of bearing the trouble and threat of seeking new ones. Which has also been a major driver in this change. Many companies also have had to forget about a few of their employees to pay for having less creation and sales. TOYOTA Electric motor COMPANY made the decision to keep a good leash on the resources instead and utilize them prudently so the creation and sales area do not have to suffer.

Internal drivers:

Along with the external, there's also many internal drivers that inspire change in the organization. TOYOTA MOTOR COMPANY has been a company that has always believed in the Kaizen theory that is the continuous change principle. That has led to change in their organizational structure and goals frequently. TOYOTA MOTOR COMPANY is obviously searching for ways by which they can improve themselves. Their inspirations have also result from other successful production companies like Ford and the aggression to be the best in the entire world.

Change in technology:

Technology has always been a competition powered field. Each day there are major enhancements that change the world of technology and those affected because of it forever. For every business den pendent on technology, it is extremely important to keep the process of innovation and progression continuous. For any car mobile company as well, to take pleasure from competitive advantage in technology is vital, but it is also a difficult activity. Toyota Motors Company has surrounded itself with progressive engineers and designers to keep that competitive edge alive. The main internal driver because of this change has been to reinforce that aggression towards scientific knowledge and aptitude.

Company Progress:

Growth is the required outcome for many companies. Strategies' are developed, goals are established and action strategies are created for this reason only. For just about any company to increase, change is important. It's been the usual practice of TOYOTA Motor unit COMPANY to change their strategies and development ideas once in awhile to keep the professionals, employees and even the customers on the toes. Positive change brings development for a firm. (Jean Phillips, Stanley M. Gully. 2011).

Some of the Management Aims for the Organization Change are as follows:

TOYOTA Motor unit COMPANY's highest management aim has always been to create the best possible product for the customer. A number of the objectives for doing that are as follows:

To utilize the company resources more effectively and effectively: in this day and age, where in fact the world is suffering from the aftermaths of recession, there's also been a significant change in the buying patterns of the customers. And as a result of this, the sales area is affected. Due to that labor rates and reference management of the company need to be rethought and re-strategized. In this time around of monetary trench, it is important for any company to utilize their existing resources with prudence. This is one of the key goals for the change.

Keep customer satisfaction as the very best priority of the business: Additional target was given to quality services for customer satisfaction. To achieve that objective a separate department for customer services was developed.

Focus on long-term tactical planning activities: the target was also to develop future strategies' for expansion of the company. This is also one of the main objectives for the change.

Focus on cost lowering strategies: due to the fact that there were a whole lot of changes in customer buying tendencies and decisions, cost reduction strategies were advertised remember the performance and efficiency of the product.

More authority given to the professionals to make at that moment decisions: TOYOTA Electric motor COMPANY in addition has bestowed their workers with ample specialist to make major decisions on their own based on the situations requirement. That has always been one of the main factors for success. This strategy has also gained the employee trust in the business.

Areas for improvement were determined: The first rung on the ladder in planning for objectives is to recognize the areas that require to be improved upon. These areas can be identified by following earlier craze and looking for weaknesses. In the last year, what were the areas that needed attention and improvement? Those are the ideal areas to start from. Other ways to identify is to conduct a study of the market and the company itself and compare results. It'll give the administrator a very clear idea in regards to what areas the business is lacking in.

Stretch goals were establish for quality: after the areas where improvement is need are identified, goals are arranged. They are not normal concentrate on but extend goals. Stretch goals are useful yet highly ambitious goals that are clear, powerful and competitive. An organization must be highly in a position and self-confident to have the ability to fulfill their stretch out goals. TOYOTA Electric motor COMPANY projects their goals with an total annual basis and screens and evaluates them over summer and winter.

Performance Dashboards were used: Performance can only be measured if it is continuously supervised and progressed is gauged. Performance Dashboards are management tools used to judge the company's performance and progress on a regular level. The overall organizational strategies till the amount of quality service that is provided to the clients, this all can be gauged by performance dashboards. The reason behind its recognition is they are easy to design and can be put in place with efficiency. Increasingly more companies nowadays are going for performance dashboard with the quantity increasing every day. a way to ensure the performance dashboards success is to build up it using three simple concepts in mind, that is, simplicity, support of senior executives and use of proper measuring metrics that needs to be constant throughout the complete company.

An brains team was deployed: the sort of market an organization lives in; it has to face many types of turmoil and disorders. They may be political, financial or natural. But they need to be addressed. Following the performance dashboards are establish, an intelligence team is deployed to foresee the turmoil and uncertainties in the strategies and exactly how they might be affecting the company. This is a very important step for the company as these delight changes employ a strong have an impact on on the entire performance of the organization and can affect all the departments from the sales of the company to the customer services that they are providing.

Action plan originated: The past step is to build up an action plan that is based on all of the above factors. This action plan is then divided to task based mostly activity that is more of the complete goal in regards to what is expected of every of the average person or section in the business. (Daft, Richards. Marcic, Dorothy. 2003)

Additional techniques

Employees type:

A successful not understated idea is for taking the employees suggestions and ideas for organizational change. Employees are the base level employees who can provide the management a very clear idea of the operations of the company. Taking the employees source can not only bring about their trust and loyalty in the company but it can also supply the management a new perspective or eyesight for the company. The management does not have to cater all the employees' ideas and they shouldn't be making any determination in that respect as well but it will always be a good organizational move to empower all levels of the employees to increase their production and determination to the company. (Mary B. Holihan 2006)

SWOT evaluation for the projects:

Another additional approach that can be applied by the professionals is to use make a matrix of advantages, weaknesses, opportunities and hazards of the project that they would like to undertake. Then those talents, weaknesses, opportunities and threats should get weight age matching to their expected success in final result. Those way very concrete facts and statistics will be available with the management before making a decision on a project or even making organizational changes. (Lawrence G. Fine, 2009)

How Effectively Change was maintained?

2010 didn't prove to be a good time for Toyota Engine Corporation. Their misfortune started right at the beginning of the entire year in January 2010 when they began receiving issues regarding pedal entrapments with their autos. Finally, on 28th January 2010, the situation got so very bad that TOYOTA MOTOR COMPANY declared to recall the defaulted vehicles. These recalls costs were almost 5. 2 million price of vehicles. Another 2. 3 million value of vehicles were also recalled anticipated to accelerator problems. Certain models of Lexus and Pontiac were also discovered to be faulty and needed to be recalled. On 29th January 2010, 1. 8 million value of vehicles were also recalled in Europe. From China 75000 were recalled. TOYOTA Motor unit COMPANY had previously encountered these issues this past year too and experienced worked in revamping their developing processes nevertheless they did not prove to be successful as they faced the same situation again in 2010 2010. The main vehicles that were discovered to be faulty were:








(Autos at msnbc. com, Toyota issues recall for 2. 3 million vehicles. 22nd January, 2010)

Effect on Organizational Change:

Due to the recent blows that TOYOTA Electric motor COMPANY must face in 2010 2010, there is an effect of all this on the organizational change implementation. The transition process of the divisions was completed as determined however the recent tragedies acquired a strong effect on the production part of the business. Because of this their sales were also infected.

How the client Service Department was damaged:

Customer services are usually the first place to be impacted as soon as there is a problems. Same has been the case with Toyota Motor unit Company. Their customer services received the most prominent blow as the customer services division acquired to deal with all the customers' problems about the faulty vehicles.

How the Sales Division was affected:

TOYOTA Electric motor COMPANY's Sales Division had to experience the biggest blow. According to the annual reports there was a massive drop in the sales in the year 2010 due to the faulty vehicles. The decrease in the sales was almost 39 percent drop as compared to the previous time. The company needed to recall almost 10 billion us dollars worthwhile of vehicles from all around the globe. Since Toyota Electric motor Company in addition has had a huge influence on japan Overall economy, even the Yen experienced loss in the market.

How the production division was infected?

Toyota Engine Company's production was temporarily closed down down to check the faults in the vehicles and before fault was identified and resolved, production of new automobiles was not resumed. Because the production team was the most involved department during the whole crisis, they had to face the biggest scrutiny and inspection by the planet.

How any level of resistance to improve was managed?

TOYOTA Electric motor COMPANY went through a tough calendar year that was 2009 and 2010. Besides having difficulty with the change in consumer action patterns and working with the economic trench, the business also had to face an enormous blow when they had to call back vehicles almost worthy of of 10 billion dollars altogether all around the globe. But despite going through so many recent travesties, TOYOTA Motor unit COMPANY was very positive and hopeful in their frame of mind. Based on the company, there may have been mistakes in the past but the New Year's goal was very clear and that was to have zero flaws. By recalling their faulty vehicles, they were able to find out the flaws in the automobile and make sure that the same blunder had not been repeated in the future. There have been many companies that have experienced the same concern before. For instance, Chrysler recalled CTS pedals in Dodge Caliber vehicles in July 2010 after studies of sticking. Ford ceased production with their transit van for a while because the look was similar to the CTS pedal.

According to Akio Toyoda:

"There was a gap between the time our U. S. co-workers realized that this was an unexpected emergency and enough time we realized within Japan that there was an unexpected emergency happening in US. It required three months for all of us to recognize that this had converted into an emergency. In Japan, regrettably, until the midsection of January we didn't think that this was really a turmoil. " (Morgan, James M. Liker, Jeffery K. 2006)

To what amount the change was successful in meeting its aims:

The main goal of any business is to make its business sustainable; in other term, to make ample profit. From the beginning TOYOTA Motor unit COMPANY hasn't had trouble making profits because of the fact that they enjoy the benefit of cost differentiation in their product. In the year 2010, these were not successful in getting together with their goals.

According to the CNN Business Release (2011), their NET GAIN dropped from US $ 1. 87 billion Dollars to 1 1. 1 Billion Dollars which is a 38. 9 percent drop as compared to their performance last year. In the defense of the TOYOTA Motor unit COMPANY executives, they blamed the inexperienced cars for their failure and the actual fact that the federal government policies had prompted the production of hybrid autos in the market, leading to the sharpened drop in the sales of other vehicles.

(CNN -2011)

Need for even more Changes in the foreseeable future:

There are still a lot of areas that Toyota Motor unit Company could work on to improve the company. Two of these are pointed out below.

Additional Focus on the Manufacture of the Cars:

TOYOTA Motor unit COMPANY needs to pay extra focus on the manufacturing part of the business in the foreseeable future. Special Quality team should be presented to ensure that the automobile manufacturing process goes through an extensive examination of the parts before the car is set up. A special evaluation team should also be introduced to test the automobile parts so that TOYOTA Motor unit COMPANY does not have to face the same situation again. TOYOTA Electric motor COMPANY is an extremely reputable company but the recent tragedies have influenced the customers trust in the brand. TOYOTA MOTOR COMPANY should devote extra effort to regenerate their brand goodwill once more.

Initiative to create more "renewable cars":

Since Green Vehicles are the new craze, TOYOTA Electric motor COMPANY also needs to concentrate on not only bringing out green autos but also in thought in turning their existing automobiles green. The customers should be given the option of a straightforward change in engine motor to turn their cars eco friendly. This will prove to be a wise decision for the company as the government has also been emphasizing on inexperienced cars. Intro of a new and various product will help the company win back their customers self-confidence in their brand.


Despite anything that TOYOTA Engine COMPANY has endured through the year, there continues to be a lot of aggression and expertise in the company and it'll not take them long to jump to the very best of the automobile industry once more. Even now they are simply along the way of taking new initiative to ensure that they don't have to face the same situation in the future. For me, the market could probably forgive Toyota Motor unit Company if they have two bad years in the row. However they may not be so forgiving if the trend continues. In the event the Toyota Motor Company desires to regain the clients trust and recapture the marketplace, they'll certainly have to create new organizational ways of make that possible otherwise, they could even wash away all the effort in their recent too.

Microsoft's President Costs Gate's key take note of address to COMDEX in Las Vegas in November 2000 included the following observation:

"I keep near my palm a backup of My Years with Standard Motors by Alfred Sloan, the fantastic head who made GM the world's famous automaker. The important thing here's how to make organizations endure after the genius business owners who built them have passed on. In Japan there are two companies that serve as suitable cases: Toyota Motors and Sony. I'm not surprised when a company grows quickly in the period of five years, but I'm extremely considering companies that constantly create superlative results on the twenty or thirty year period. Do they have embedded in them some system for permanence? If indeed they do, then a generational handoff won't wipe out their skill and their vitality. "

(Hino, Satoshi, 2005)

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