MICROSOFT

In th prtil fulfillmnt of th cours on Orgniztionl Plnning nd Dsign

Rstructuring t Toyot
Motor Corportion
Group 8
MN MISHR 15PGHR06

NISHNT KUMR 15PGHR29

PRITSH PTL 15PGHR32

SONLI BHTI 15PGHR47

ZCHRIH 15PGHR53

SWTI DWN 15PGHR59

Contnts
cknowldgmnt .................................................................................................................................. 3
xcutiv Summry................................................................................................................................. 4
bout th Orgnistion ........................................................................................................................... 5
Wht hppnd in 2010? ......................................................................................................................... 7
Mjor Intrnl nd xtrnl Fctors for Chng: ............................................................................... 7
xtrnl Fctors: ............................................................................................................................. 7
Intrnl Fctors: .............................................................................................................................. 8
Mngmnt Objctivs for Orgnistion Chng: ........................................................................ 8
dditions in 2012................................................................................................................................ 8
dvntgs nd Disdvntgs of this structur ............................................................................. 9
Wht chngd ftr this? ....................................................................................................................... 10
Wht hppnd in 2013? ....................................................................................................................... 10
Th Nw Orgnistionl Structur:................................................................................................... 12
Fturs of th nw structur: ....................................................................................................... 12
Ky Succss Fctors of th nw structur:.................................................................................... 12
Mjor chllngs tht cn occur in succssful implmnttion of th structur: .......................... 14
Mckinsys 7 S Dignosis of Toyots Currnt Structur: ................................................................. 14
Gp nlysis: ..................................................................................................................................... 15
Issus tht wr ddrssd by this structur (lignd): ................................................................ 15
Issus tht wr not ddrssd by this structur (Mislignd): ..................................................... 15
Nw Suggstd Structur ................................................................................................................. 15
 cknowldgmnt

First nd formost, w would lik to xtnd our sincr grtitud to our profssor Prof
Mdhushr Nnd for giving us th opportunity to work on this projct nd giving us hr
undividd ttntion nd support tht hlpd us pursu this projct nd s it to fulfillmnt.

W would lso lik to xtrn our grtitud to our stmd collg, Mngmnt Dvlopmnt
Institut, Gurgon for providing th infrstructur nd othr rsourcs rquird for this projct.

Lst but not th lst w would lik to thnk our prs who hv bn vry supportiv of us nd
our fforts.
 xcutiv Summry

This projct focuss on th orgnistionl chngs tht took plc in Toyot Motor Corportion
in 2010 nd 2013. It nlyss both th chngs with in dpth study on vrious fctors which
cusd thm nd how nd whn th rstructuring hppnd.

In th rstructuring of 2010, th nlyss shows tht it ws both xtrnl mrkt dmnd cusd
by fctors such s rcssion, rclls of Toyot Motor products on vry lrg scl; nd lso
som intrnl fctors such s tchnologicl chng.

In th rstructuring of 2013, th nlyss show tht th rstructuring is mor bcus of intrnl

rsons (For xmpl: Kizn) thn xtrnl fctors. But, thr r lso vrious xtrnl fctors
which cus th rstructuring lik mjor rclls which strtd in 2010.

Th projct focuss on stkholdr nlysis of th orgnistion, nlyss of 2010 structur nd

how it fulfils som of th orgnistionl gols. It lso cpturs th disdvntgs of this structur
nd th suggstd rsons for th nd to bring bout nothr chng. 7 Str Modl hs bn
pplid to th 2013 structur nd furthr gp nlysis hs bn don. On th bsis of th gp
nlysis, som nw structurl chngs hv lso bn rcommndd.
bout th Orgnistion

Toyot Motor Corportion

Toyot Motor Corportion bgn s Toyot in 1933 s division of Toyod utomtic Loom
Works. It bcm Toyot Motor Co. in 1937 whn it ws stblishd s n indpndnt compny.
In Sptmbr 1947, Toyots smll-sizd vhicls wr sold undr th nm of Toyopt which
ws ltr droppd in th mricn mrkts. In th 1960s-70s, th US mrkts strtd lvying
high txs on import of vhicls du to which Toyot strtd building its plnts in US.

In 1980s, Toyot first rcivd Jpns Qulity Control wrd nd strtd prticipting in wid
vrity of motorsports. In 1989 Toyot lunchd its prmir brnd Lxus in th luxury division.

Toyot rnkd ighth on Forbs 2000 list of th world's lding compnis for th yr 2005 but
slid to 55 for 2011.Th compny ws numbr on in globl utomobil sls for th first qurtr
of 2008.

In 2009-10, Toyot fcd mjor crisis whn thr ws high products rcll i.. 9 million crs
nd trucks worldwid lding to loss of $1.1 Billion.

Vision of Toyot:

Toyot will ld th wy to th futur of mobility, nriching

livs round th world with th sfst nd most rsponsibl
wys of moving popl. Through our commitmnt to qulity,
constnt innovtion nd rspct for th plnt, w im to
xcd xpcttions nd b rwrdd with smil. W will
mt our chllnging gols by ngging th tlnt nd
pssion of popl, who bliv thr is lwys bttr wy.

Mission of Toyot:

Crt vhicls tht r populr with consumrs.

In xpndd form, Toyots mission sttmnt includs th following strtgic ctions:

Provid world-clss sfty to protct th livs of customrs.

Provid optimiztion of nrgy/infrstructur to locl communitis.

 Put high priority on sfty nd promot product dvlopmnt with th ultimt gol of
compltly liminting trffic csultis.

Dlivr crs tht stimult nd vn inspir, nd rn smils from our customrs.

ddrss mploys duction undr Gnchi-gnbutsu philosophy, which is to go to th

sourc to find th fcts to mk corrct dcisions build consnsus nd chiv gols t our
bst spd.

Through tru mutul trust with prtnrs, contribut to th dvlopmnt of nw tchnology

nd improvd xprtis.

Contribut to conomic dvlopmnt of locl communitis with R&D oprtions

functioning ffctivly in ch rgion.

Stkholdr nlysis:
Stkholdrs xpcttions Wht Compny did
Customrs Good qulity crs t bst Followd Customr First
possibl prics pproch
Dvlop nd innovt high qulity
products nd srvics tht mt wid
vrity of customrs nds
mploys Job scurity, crr Stimult prsonl growth of
dvlopmnt nd fir mploys
mploymnt prctics Striv to provid fir working
conditions nd to mintin sf nd
hlthy working nvironmnt
Invstors (Businss Businss profitbility mphsis on globl businss
Prtnrs nd Shrholdrs) strngth
Wht hppnd in 2010?
In 2010, Toyot nnouncd significnt chng in its orgnistionl structur owing to vrious
intrnl nd xtrnl drivrs. Toyot hs bn known to chng its orgnistionl dsign vr so
oftn in ordr to provid comptitiv dg to th compny in th mrkt. Som of th mjor
chngs tht took plc in 2010 wr:

In ordr to incrs fficincy nd optimum utiliztion of compny rsourcs, Businss

Dvlopmnt Unit nd Mrin Businss Division wr combind to form th Mrin nd
Unit Businss Division. This division ws lso md rsponsibl for th sls function
Purchsing Plnning Division ws md into Purchsing dministrtiv Dprtmnt
whrs th Globl Purchsing Promotion Division nd Body Prts Purchsing Division
wr chngd to Purchsing Plnning Division. Th rson to do this ws to consolidt
locl nd forign dministrtiv functions nd work on futur mngmnt projct nd
cost fficint strtgis
Th sls nd mrkting division of Jpn cm undr th Toyot Mrkting Jpn Co.
Ltd. in ordr to mk th mrkting in Jpn thir focl point
Th Strtgic Production Plnning Division ws shiftd undr th hd of Customr
Srvics Oprtions Division in ordr to strngthn th customr srvic cpbilitis

ftr this chng in th structur, th Orgnistionl Structur of Toyot (bfor th rcnt

chng in 2013) lookd lik th on givn blow in July, 2012.

Mjor Intrnl nd xtrnl Fctors for Chng:

xtrnl Fctors:
1. Incrsd Comptition: n orgnistion lik Toyot which ws lwys volving, hving
comptitiv dg ws mjor rson for succss. So, in ordr to kp itslf brst with
th rcnt ris in comptition of utomobils worldwid, Toyot hd to chng its
structur
2. Globliztion: In ordr to dvlop globl strtgis nd policis, Toyot Motor Compny
hd to shift from its Ntionlly focussd division structur to mor globlly focusd
cntrlisd structur for strtgy nd dcision mking
3. Chng in nds of Consumrs: Du to th rcnt globl conomic rcssion, th buying
bhviour of th consumrs hd chngd lrgly. Sinc Toyot hd doptd cost
diffrntition strtgy, in ordr to cop with th chnging buying pttrns, Toyot hd
to chng itslf
4. Shortg of Rsourcs: Du to rcssion, thr ws mjor shortg of rsourc
vilbility. Mny compnis hd lso hd to lt go of fw of thir mploys to
 compnst for th dcrsing sls. Toyot instd md dcision to kp tight lsh
on th rsourcs nd thus utilis thm so tht production nd sls didnot suffr

Intrnl Fctors:
1. Tchnology Chngs: Toyot hs lwys blivd in th principl of Kizn nd thus
thy hv constntly chngd thir structur nd gols to kp up with th chng in
nvironmnt. Th mjor intrnl drivr to chng th tchnology constntly hs bn th
ggrssiv modl tht thy hv followd. Toyot hs lwys surroundd itslf with
innovtiv nginrs nd dsignrs to kp th comptition liv
2. Compny Growth: Toyot followd policy of constnt growth nd it ws du to this
fctor tht mny of th orgnistionl gols hd chngd in 2010. In ordr to fulfil ths
gols, th structur ws mjorly chngd. Th chngs wr md to kp th xcutivs,
mngmnt nd vn customrs on thir tos

Mngmnt Objctivs for Orgnistion Chng:

To utilis compny rsourcs mor fficintly nd ffctivly
Kp customr stisfction s th top priority of compny by providing qulity srvics to
customrs. In ordr to this, sprt division for Customr Srvics ws dvlopd
Long trm strtgic plnning objctiv focus: Th focus ws to dvlop futur strtgis
for th compnys growth
Dvlopmnt of Cost rduction strtgis: To kp th cost ldrship in mrkt
Mor uthority givn to dcision mking t xcutiv lvl to incrs spot dcision
mking
Idntifiction of rs for chng wr md bsd on prvious yrs dt
Strtch gols for xcllnc wr st

dditions in 2012
Th Toyot Globl Vision ws dclrd in Mrch 2011. In ordr to rliz this, Toyot in pril
mployd chngs to th mngmnt systm nd ssocitd prsonnl chngs of dirctors nd
orgniztionl rforms. Th im ws to

1) communict customr viws nd on-sit informtion to mngmnt in n ordrly fshion

2) mk prompt mngmnt dcisions bsd on on-sit informtion

3) mk rgulr chcks s to whthr mngmnt dcisions r suitbl to socity, Toyot

implmntd th following: ) rorgniztion of th bord of dirctors, b) scling down of th
xcutiv dcision-mking systm, c) chngs to structurs to llow locl dcision mking by
ovrss ffilits, d) chngs to
structurs to nsur tht outsid
opinions r listnd to in rnst nd
rflctd in mngmnt prctics.

In pril 2012, to mrg th Customr

Srvic Oprtions Group nd th
Qulity Group into th Customr First
Promotion Group so consumr viw
cn b shown in qulity nd so tht
quick, highly pproprit rsponss cn
b md to consumrs nd to produc
th Customr Srvic Fild to prform
intgrtd customr rsponss.

dvntgs nd Disdvntgs of
this structur
dvntgs:

Mor rsponsiv s th dcision

mking ws somwht trnsfrrd to
th xcutiv lvl
Incrs in customr focus s
bd qulity products wr rclld t
th xpns of th orgnistion
Strong brnd dvlopmnt
Incrs in fficincy nd
optimum utilistion of rsourcs

Disdvntgs:

High focus on vrious

gogrphis thus rducing globl rch
of prmir products
High cntrlistion s mjor
dcision mking ws still in hnds of
Jpns hdqurtrs
 Slow rspons tim to ddrss sfty issus

Wht chngd ftr this?

ftr succssful implmnttion of this structur, Toyot rorgnisd itslf gin in 2013 du to
vrious chngs tht took plc in th gols of th orgnistion nd stkholdrs:

Rspons to sfty issus nd mjor rclls which strtd in 2010

In th 2010 structur, Toyot followd strong cntrlisd globl hirrchy whr th
hdqurtrs t Jpn ws mjorly rsponsibl for th dcision mking procss
No or lss communiction btwn vrious businss units ld to silos lik working
Th sns of scrcy du to strict hirrchy ld to mploy prcption bout control
mrging mrkts rquird diffrnt strtgy s comprd to lrdy mrgnt mrkts

Wht hppnd in 2013?

On Mrch 6th, 2013, Toyot Motor Corportion nnouncd mjor chng in th orgnistionl
structur which would includ implmnting orgnistionl, prsonnl nd xcutiv chngs to
strngthn th mngmnt structur imd towrds rlizing th Toyots Globl Vision which
ws stblishd in 2011.

Th chngs which wr md ffctiv from pril 1, 2013 includd th following mjor

chngs:

Businss Unit Orgnistion:

TMCs utomotiv businss ws dividd into 4 divisions:
Lxus Intrntionl: imd t stblishing Lxus s globl prmium brnd with
Jpns roots
Toyot No.1: This includd mrgnt/dvlopd mrkts of North mric,
urop nd Jpn
Toyot No. 2: This includd mrging mrkts of Chin, si & Middl st,
st si & Ocni; fric, Ltin mric & Cribbn
Unit Cntr: This focussd on ngin, trnsmission nd othr unit rltd
oprtions. This crtd globlly comptitiv unit componnts. Th xcutiv
vic prsidnt in chrg ovrsw ll oprtions from componnt plnning nd
dvlopmnt to production tchnology nd functions imd t bringing products
to mrkt in prompt nd timly mnnr
Rorgnistion of Rgionl groups:
 Th totl rgions will incrs from six to ight. Th si nd Ocni Oprtions Group
nd th Middl st, fric nd Ltin mricn Oprtions Group wr rorgnizd into
th st si & Ocni Rgion, th si nd Middl st Rgion, th fric Rgion,
nd th Ltin mric & Cribbn Rgion nd long with North mricn Rgion,
Chin Rgion, urop Rgion nd Jpn Sls Businss, th totl rchd to 8.
In ddition to this, non- Jpns xcutiv titld CO would b md rsponsibl for
North mric, urop, fric, Ltin mricn nd Cribn rgions to incrs th
globlistion ffct.
Dvlopmnt of Nw rgions not blonging to ny group:
TNG Plnning Division: This ws md to dvlop strtgy for th tchnology
bsd mdium to long trm products
Product nd Businss Plnning Division: This ws md rsponsibl for mrkt
bsd mdium to long trm products

Othr smllr unit lvl chngs includd:

R&D Group 1 chngd its nm to R&D Group, whil R&D Group 2, th Production
nginring Group nd th Mnufcturing Group wr rorgnizd s th nwly
stblishd Unit Cntr nd th Vhicl Production nginring & Mnufcturing Group
Th Public ffirs Division chngd from division not blonging to ny group to prt
of th xtrnl ffirs & Public ffirs Group
Th BR Profit Informtion Mngmnt Dprtmnt ws stblishd
Logistics fild ws stblishd
Th Nw Orgnistionl Structur:

Fturs of th nw structur:
Th nw structur hs th following fturs:

Globl Hirrchy:
Th orgnistion still mintind Globl Hirrchy in its structur. But, th dcision
mking powr of rgionl nd businss hds hs incrsd to hug xtnt.
Gogrphic Divisions:
ch rgionl hd rports to th compnys hdqurtrs. Through ths rgionl
divisions, th orgniztionl structur nbls Toyot to improv products nd srvics
ccording to rgionl mrkt conditions.
Product Bsd Divisions:
Th 4 product bsd divisions hlp in dvlopmnt of brnds nd product lins.
Common Functionl ntitis:
Th vrious Functionl ntitis which hv bn md common to ll 4 product bsd
divisions shows tht th currnt structur doptd is Globl Mtrix Structur.

Ky Succss Fctors of th nw structur:

Focus on Criticl Comptncis:
 Toyot works ccording to th Toyot Wy of working which focuss both on rspct for
its popl nd continuous improvmnt. Th Ky Succss Fctor of Bst Crs For ll is
covrd by this comptncy.

lso, nothr criticl comptncy is th focus on rgionl mrkts tht th nw structur

is providing.

Coordintion:
In th nw structur, hug mount of coordintion is rquird btwn functionl hds
such s R&D nd th vrious Product Division hds so s to provid bst qulity
products to customrs. Coordintion ws lso rquird btwn Lxus Intrntionl tm
nd th othr rgionl hds (spcilly tht of Toyot No.1 mrgnt mrkts) so s to
promot nd mrkt Lxus s prmir brnd cross glob
Mngril Comptncis:
Th Globl Mtrix Structur mnt tht thr ws nd for High Locl Rsponsivnss
nd Globl fficincy. In this cs, th top mngmnt must focus on prioritizing
rsourc lloction to ch division. lso thr is hug rquirmnt of lowr lvl tms
to produc good tmwork nd lso dvlopmnt of ldrship skills.
In ordr to gin mrkt ldrship, mrkting tms must b highly productiv.
Commitmnt:
Th product dvlopmnt strtgy followd hr mnt tht th product dvlopmnt
tms must nsur unusul lvls of inititiv tking nd lso R&D must work to bst of
its cpbilitis.
Communiction:
Sinc th structur now hs bn dcntrlisd to som xtnt, it is highly importnt to
communict th globl vision nd mission of orgnistion to ll divisions.
 Mjor chllngs tht cn occur in succssful implmnttion of th structur:
Unclr communiction of gols of orgnistion cn dstroy th mrkt ldrship tht
th orgnistion hs gind ovr th yrs
Rgulr mtings nd intrctions btwn vrious division hds is must so s to stop
from th vrious divisions to work in silos
Whil Csh Cows myb highly promotd, othr brnds my fd out if th rgionl
hds do not focus on thm
Rgionl rquirmnts could ld to customiztion of crs bsd on gogrphicl
rquirmnts thus hmpring th growth of th orgnistion s Globl Brnd
Tight control from th top mngmnt could hv ngtiv ffct nd not produc th
ffct i.. mor powr of dcision mking to xcutiv lvl ldrs thus rducing th
rsponsivnss which would b on of th bsic fturs of this typ of structur
Rsourc shring is nothr mjor issu

Mckinsys 7 S Dignosis of Toyots Currnt Structur:

Cost Ldrship Strtgy

Ln Orgnistion Strtgy
nd Globl Mtrix
Structur
Totl Production
Toyot Wy- 14 Principls
Structur Systm Systm nd Just
in Tim
Production

Highly skilld nd
Shrd
knowldgbl stff
with mngril
Vlus
skills dvncd
tchnologicl
Stff Tsk Orintd, Kizn
Skills
knowldg nd
mngril skills

Tmwork focus nd
Styl
continuous
dvlopmnt
Gp nlysis:
Issus tht wr ddrssd by this structur (lignd):
Incrs in locl rsponsivnss nd globl fficincy
Mor focus on prmir brnds globlly
Rspctiv focus on mrgnt nd mrging mrkts
Cost ldrship in th mrkt surpssing comptitors such s G nd Volkswgon
Common gols for th orgnistion to mk it globlly rcognisd brnd
Crting bst crs in th world
High focus on innovtion nd optimiztion of rsourc usg

Issus tht wr not ddrssd by this structur (Mislignd):

Lssning ffct of Jpns hirrchy
Customr first focus by dlivring bst qulity crs
Rduction in tim consumption nd quick rsponsivnss in dcision mking
Lssr focus on function bsd work to limint unncssry coordintion work
Strmlining of oprtions

Nw Suggstd Structur
1. Chngs rquird in structur, systms, stff, styl or shrd vlus:
focus on product bsd orgnistion rthr thn function bsd orgnistion is ky
solution. Thus, thr is rquirmnt of crting diffrnt divisions for product bsd in
hous dvlopmnt.
Th 4 divisions cn b md into 7 divisions bsd on th products of th compny:
R &D (For innovtion)
Compct Cr Division
Mid-Siz Vhicl Division
CV Division
Lxus Intrntionl Division
PowrTrin Division
Connctd Division
Division of functions lik R&D, production nginring nd mnufcturing oprtions
cn b dividd into dvnc nd mss production ctgoris nd thn llottd to ch of
th bov division.
Toyot No. 1 nd Toyot No. 2 should b mintind nd strngthnd to build
strong rltionl oprtions
 Stting up of Cntrl Rsrch Cntr to look into long trm businss modls nd
strtgy for th orgnistion
stblishing division for mid to long trm strtgic plnning to dtrmin futur
strtgic dirctions
2. How will th orgnistion function bttr ftr ths chngs r md?
Sinc TMC still rlis highly on individul fforts md by its own tm mmbrs
nd stkholdrs du to its prsnt structur nd work procsss nd lso cross-
functionl coordintion hs bn found to b highly tim consuming, this structur
will hlp in solving this
Th rgion bsd units will compt nd lrn from ch othr whil oprting
longsid TMCs Hd Offic

Linking work procsss rnging from R&D to mnufcturing, thrby nbling

th dvlopmnt of vr-bttr crs nd strngthning TMC's workforc
nbling individul businss units to mk dcisions mor quickly nd
indpndntly
Strngthning of functions rsponsibl for formulting mid-to-long trm
objctivs nd corport strtgis
Strmlining of oprtions from plnning through mnufcturing by giving full
rsponsibility nd uthority to Prsidnts of ch of th nw 7 divisions

3. Flws in th nw dsign nd th problms it crts:

Crtion of 7 nw divisions cn ld to mjor rsourc lloction issus which
my gin ld to th problm of rsourc optimiztion which ws tckld in th
rlir structur
conomis of Scl will b n issu s dupliction of mnufcturing units, R&D,
mnpowr will b rquird bcus ll products will now hv sprt functionl
dprtmnts
Th nw structur focuss on intrnl comptition thus rducing coordintion
cross divisions (Product divisions)
Skilld knowldg workrs t both mngril nd xcutiv lvl r rquird so
s to mk ffctiv dcision mking
Rfrncs

http://www.toyot-
globl.com/compny/vision_philosophy/toyot_globl_vision_2020.html

https://www.csu.du.u/__dt/ssts/pdf_fil/0018/109602/FS_Journl_vol_5_no_2_02
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http://pnmor.com/toyot-orgniztionl-structur-nlysis

http://www.toyot-globl.com/invstors/ir_librry/nnul/pdf/2013/r13_.pdf

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http://nwsroom.toyot.co.jp/n/dtil/11234406/