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Internal Alignment of Toyota Motor Co.

In management, internal alignment refers to relationships between interdependent social and technical elements within a company that ensure its effective functioning. The main components of the organizational alignment model are structure, task / work system, and people (Lane & Maznevski, 2019). At Toyota, all elements of this model are well aligned to create an efficient and innovative system that helps the company achieve its organizational goals.

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Structure

The structure is the organization of different departments and business units within a company. Toyota has a divisional organizational structure with a centralized global hierarchy, which underwent significant changes over the last decade. The headquarters, located in Japan, used to make final decisions on all major issues and act as an intermediary in the communication between individual business units (“Toyota company hierarchy,” n.d.). In 2013, the company’s structure was reorganized into a less centralized system, and more decision-making power was given to regional heads (“Toyota company hierarchy,” n.d.). Currently, all business units still have to report to the headquarters but can make their own business decisions.

Apart from the main headquarters, the company’s structure consists of geographic divisions and product-based divisions. There are eight regional divisions which are responsible for adapting the products to local market conditions and four product-based divisions. They are Lexus International, Toyota No. 1 for operations in North America, Japan, and Europe, Toyota No. 2 for operations in all other regions, and the unit center (“Toyota company hierarchy,” n.d.). With the main power being held by the headquarters, each division’s head is empowered to make decisions for that particular branch. Overall, this structure provides a high degree of flexibility and makes the company capable of responding to regional market conditions.

Tasks / Work Systems

The work system at Toyota is organized on the basis of the Toyota Production System (TPS). It is a social-technical system that manages manufacturing and logistics and comprises the company’s management philosophy and practices (“Toyota Production System,” n.d.). Its main objective is to conserve resources by eliminating waste, and many tasks within Toyota are focused on designing processes capable of delivering the desired results. They require a high level of professional skills and knowledge.

The TPS was established based on two concepts: jidoka and the Just-in-Time concept. Jidoka means that when a problem occurs, the equipment stops immediately, and the Just-in-Time concept means that “each process produces only what is needed for the next process in a continuous flow” (“Toyota Production System,” n.d., para. 3). The TBS culture has interdependent relations with Toyota’s culture in general and contributes to the implementation of its principles of quality, efficiency, and continuous improvement.

People

Toyota invests in people and has a unique corporate culture based on the idea of soft innovation. Employees are seen not just as workers but as an asset which accumulates the wisdom of experience. They have to operate in an environment where they constantly face challenges and need to generate ideas. Contradictory viewpoints are fostered, which encourages employees to find solutions by overcoming differences rather than resorting to compromises.

At lower positions, workers require only basic qualifications to complete standardized work, while more highly positioned employees need other skills, such as decision-making, analytical, problem-solving, and trouble-shooting skills, to handle production problems. Workers at all levels require interpersonal skills and need to be able to work in a team. The main personal value which is expected from all employees is work involvement, which is defined as participation, compliance, and positive attitudes. Toyota’s senior executives are Japanese and are guided by the principles of humility and strong work ethics. Overall, people in Toyota work in unique conditions organized in accordance with the company’s innovative corporate culture and are constantly encouraged to break free from established routines.

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Culture and Systems

Toyota has a strong organizational culture based on two sets of guiding principles. The first was presented in 2001 in the internal document titled “The Toyota Way 2001.” It depicts the culture of the company as standing on two pillars: continuous improvement and respect for people (“Toyota Way 2001,” n.d.). The second is the 4P model, which includes four levels: philosophy, process, people and partners, and problem-solving (Sosnovskikh, 2016). Both models emphasize that continuous improvement and human relations are essential elements of the company’s culture.

Toyota is a process-oriented rather than a result-oriented company, and it does not use many sophisticated metrics to measure its performance. The three main types of metrics used include global performance measures at the company level, operational performance measures at the department level, and stretch improvement metrics at the business unit and workgroup levels. Most emphasis is placed on the metrics driving problem solving and supporting process orientation, and the company also uses learning measurement to track its progress.

Conclusion

At Toyota, all elements of the organization are well aligned with each other. The strongest element is the TPS, which is the source of the company’s main competitive strength. The strongest alignment is between the TPS and Toyota’s management philosophy, the Toyota Way. The Toyota Way incorporates the TPS, embodies its main principles, and serves as the underlying element of the company’s corporate culture. The gaps in the company’s internal alignment mainly exist within its structure, which still remains too hierarchical despite the recent reforms. The cause of this gap is the traditional principles on which Toyota is still largely based. Overall, Toyota remains a successful, highly innovative company with effective internal alignment that allows it to achieve its organizational goals.

References

Lane, H. W., & Maznevski, M. L. (2019). International management behavior: Global and sustainable leadership (8th ed.). Cambridge University Press.

Sosnovskikh, S. (2016). Toyota Motor Corporation: Organizational culture. Philosophy Study, 6(7), 442-454. Web.

Toyota company hierarchy. (n. d.). Hierarchy Structure. 2021, Web.

Toyota Production System. (n.d.). Toyota. 2021, Web.

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Toyota Way 2001. (n.d.). Toyota. Web.

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