Toyota's Organizational Structure and Culture

This assignment delves into the organizational structure and culture of Toyota Motor Corporation. It examines Toyota's hierarchy, leadership style based on Path-Goal theory, and motivational strategies employed within the organization, drawing from various sources such as academic journals, industry reports, and official company websites. The analysis highlights key aspects of Toyota's corporate culture, including its commitment to continuous improvement (Kaizen) and employee empowerment.

Running head: ORGANIZATIONAL BEHAVIOR
Organizational Behavior

ORGANIZATIONAL BEHAVIOR 1
Table of Contents
Introduction.................................................................................................................................................3
Toyota- Overview....................................................................................................................................3
Toyota- History.......................................................................................................................................3
Toyota- Vision. Mission and Objectives..................................................................................................4
Toyota- Organization Structure...............................................................................................................4
Global hierarchy..................................................................................................................................5
Geographic divisions...........................................................................................................................5
Product-based divisions.......................................................................................................................5
Toyota- Analysis of Structure..................................................................................................................5
Toyota- Organization Culture..................................................................................................................6
Hofstede Theory of Organization Culture................................................................................................6
Power distance.....................................................................................................................................6
Masculinity-Femininity.......................................................................................................................6
Individualism-Collectivism.................................................................................................................7
Uncertainty Avoidance........................................................................................................................7
Long-term, short-term orientation.......................................................................................................7
Model of Johnson’s Cultural Web...........................................................................................................7
Stories..................................................................................................................................................8
Rituals and Routines............................................................................................................................8
Symbols...............................................................................................................................................8
Organizational Structure......................................................................................................................8
Control system.....................................................................................................................................8
Power Structures..................................................................................................................................8
Leadership...............................................................................................................................................8
Quotes of Leadership...............................................................................................................................8
Model of Leadership- Four Framework Approach..................................................................................8
Human Resource.................................................................................................................................8
Symbolic Framework..........................................................................................................................9
Structural Framework..........................................................................................................................9
Political Framework............................................................................................................................9
Path-Goal Theory of Leadership..............................................................................................................9

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Motivation.............................................................................................................................................10
Quotes of Motivation.............................................................................................................................10
Model of Motivation- Expectancy Model of Motivation.......................................................................10
Principles of the Model......................................................................................................................10
Rewarding the Employee...................................................................................................................10
Attitudes............................................................................................................................................10
Application........................................................................................................................................11
Maslow’s Hierarchy of needs................................................................................................................11
Physiological and Safety needs..........................................................................................................11
Social needs.......................................................................................................................................11
Esteem and Self-actualization............................................................................................................11
Conclusion.................................................................................................................................................12
Recommendation.......................................................................................................................................12
Leadership.............................................................................................................................................12
Motivation.............................................................................................................................................12
Culture...................................................................................................................................................12
Global recommendation for Toyota.......................................................................................................13
References.................................................................................................................................................14
Appendix...................................................................................................................................................16
Appendix 1.1.........................................................................................................................................16

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Introduction
Toyota Motor Corporation (Tm) is the biggest automaker by volume in the world. The report is
about the organization structure of Toyota Company with the brief introduction about the history
and background of Toyota. The report also demonstrate the culture within the Toyota Company,
with this it also involves the concepts and theories of leadership and motivation. Further, it
explains the vision, mission, objective, strategy, and tactics of Toyota Company.
Toyota- Overview
Source [https://www.zeroto60times.com/large-car-logos-2/large-toyota-car-logo/]
Toyota is Japanese auto industry and was established in 1937. The name of the company is based
on the founder’s family name i.e. Kiichiro Toyoda (Parker, 2016). Toyota Motor Corporation is a
well-known company in all over the world. A businessman who established a company of
manufacturing an automatic loom in Japan, Toyoda was the son of that businessman.
Headquarter of Toyota Motor Corporation's is in Aichi Prefecture, in Toyota city. In the history
of the company, they have seen many ups and downs. Toyota is known for producing more than
10 million vehicles per year. Under 5 brands Toyota Motor produces their vehicles including
Toyota brand, Ranz, Hino, Daihatsu and Lexus. Toyota provides variety of vehicles such as
Automobiles, Luxury vehicles, Commercial vehicles, and engines.
Toyota- History
The origin of Toyota held in the Japanese industry of weaving when the world’s first automatic
loom was invented by Sakichi Toyoda and afterward set up the Spinning and Weaving Company
of Toyoda in 1918. Due to his invention defects were reduced and the process of producing
imperfect fabric stopped. This principle of designing equipment stopped delaying in the process

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of improvement and it converted the major attention towards the problem in the system of
Toyota Production and today also they follow this principle in their Company.
In 1929, the British Company, the Platt Brothers was so inspired by the loom that they purchased
the production for £100,000 (Toyota Motor Manufacturing, 2017). Sakichi offered that profit to
his son i.e. Kiichiro, for developing the technology at Toyota. This resulted in the introduction of
first ever passenger car of the Company in 1936 and in 1937, the Model AA, it was the birth of
the Toyota Motor Company. In 1959, Toyota vehicles started their production outside of Japan
and now, their subsidiaries present throughout the world are manufacturing Toyota vehicles.
Toyota- Vision. Mission and Objectives
The vision of Toyota is to become the most successful enterprise, to gain respect and provide a
wide variety of product to their customers.
The mission of Toyota is to provide safe drive. Toyota is working on innovation and emerging
new technologies with best people (Toyota Indus, 2017).
The main objective of Toyota is to provide good quality of vehicle to their customers and
increase their satisfaction. Toyota also wants to maintain their market share (Toyota Insurance
Management, 2017).
Strategies and tactics of Toyota are- Pricing strategy of Toyota is according to the segment. They
have divided their customers into different price segments and according to that, they
manufacture their products. They also do product differentiation according to the preferences of
customers and technology (Thompson, 2017).

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Toyota- Organization Structure
Source [https://www.hierarchystructure.com/toyota-company-hierarchy/]
Global hierarchy
Headquarter of Toyota in Japan handle the global hierarchy. The headquarters are responsible
towards providing the final judgment and decisions on critical issues. The Japan headquarter
have the authority to provide the final verdict to the individual business units in case they do not
communicate properly. Regardless of the restructuring is 2013, the company continues with a
system of global hierarchy but with the modifications that now the regional heads business units
of Toyota also have an increased say (Appendix 1.1).
Geographic divisions
East Asia, China, Middle East, North America, Africa, Japan, Oceania, Asia, Caribbean and
Latin America are the 8 geographic divisions of Toyota Company. All these regional centers and
its heads need to report to the headquarters. By following this system, the company will improve
business operation and can operate the services and products of the business in a flexible way.
Product-based divisions
Product based divisions is another feature of the hierarchy of Toyota Company. Product based
divisions of the company are divided into 4 divisions such as Lexus international, Toyota no. 1 is

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for the processes in Europe, Japan, and North America, Toyota's no. 2 is for the processes in
other remaining regions and Unit center (Hierarchy Structure, 2017).
Toyota- Analysis of Structure
The organizational structure of Toyota provides more details about the handling of crisis and
ideas of the company to move forward. A conflict can result in paralyzing the productivity of the
business but if it has been treated properly then it can be an opportunity for the business to
improve the performance. The corporate culture of Toyota Company was very rigid and a
hierarchy of superiority was at risk of responding to exterior threats slowly. It is not unusual that
individuals feel hesitant to transfer negative news up the chain inside a company such as Toyota.
Board of directors of Toyota involves 29 Japanese men that are insiders of Toyota (Gregory,
2017). Due to its structure of centralized power, power was not usually assigned in the company;
Japanese boss was assigned to all the U.S. executives to guide them, and none of the executives
of Toyota in the United States is approved to issue a recall. The flow of information in Toyota is
one-way, to Japan where all the decisions are taken.
New organizational structure of Toyota offers a high level of flexibility as compared to their old
organizational structure of centralized hierarchy. Through this new structure, the company has
become capable of reacting to the market conditions of the region. As a result of this flexibility
allows Toyota to respond quickly to the problems and help in providing good quality of the
product. Still, this organizational structure of Toyota enables business flexibility and continuous
development.
Toyota- Organization Culture
The organizational culture of Toyota Motor Corporation describes the employee reactions to the
challenges that the company experience in the market. Being a global leader in the industry of
automobile, their organizational culture is used by them to increase the capabilities of human
resource in innovation (Meyer, 2017). The organizational culture also provides benefits to the
company by supporting them in solving the problems. Further, the culture of Toyota shows the
importance of emerging a suitable culture to support the success of business globally.
Hofstede Theory of Organization Culture
Hofstede theory was proposed by Geert Hofstede, according to him regional and national factors
are the one that contributes to the organization culture and ultimately the employees’ behavior is

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influenced in the organization. Hofstede’s offers managers an instrument to examine cross-
cultural relations for understanding behavior differences. The Hofstede defines culture as “the
combined programming of the mind of differentiating people of one group from the people of
other group”. Based on this five dimensions were introduced i.e. individualism-collectivism,
long-term short-term orientation, power distance, masculinity-femininity and uncertainty
avoidance (Shafritz, Ott and Jang, 2015).
Power distance- Power distance guide means the cultural differences in the work is dependent on
the level of power distribution to the employees. According to the new organizational structure
of the Toyota Company, the powers of the regional heads have increased that enabled the
flexible culture of the company.
Masculinity-Femininity
Organization culture is influenced by the difference in the values of male and female. There will
be a difference in the policies of the organization according to the dominant power of men over
women or dominancy power of women over men.
Individualism-Collectivism
There are many organizations that believe in teamwork. In this individuals with same interest
come together and make a team. In various areas of business, Toyota uses teams. They follow a
principle of collaboration as according to the success can be achieved through teamwork.
Uncertainty Avoidance
Uncertainty avoidance index discusses a culture where employees know how to handle the
uncertainties.
Long-term, short-term orientation
Many organizations believe in maintaining long-term relations with their employees. In these
type of organizations, people stay for long and try to meet the expectations of the management
(Landy, and Conte, 2016).
Model of Johnson’s Cultural Web
In 1992, Gerry Johnson and Kevan Scholes developed the Cultural Web, offers an approach for
changing the organizational culture. It helps in exposing the practices and assumptions of culture
and set the work by arranging the elements of the organization with each other and with

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strategies. 6 inter-related elements are involved in the cultural web for making "paradigm". The
six elements are:
Source [http://citeseerx.ist.psu.edu/viewdoc/download?
doi=10.1.1.665.4781&rep=rep1&type=pdf]
Stories- To communicate about the organization culture past events are considered and are told
to people inside of organization as well as outside of the organization. For example- stories of
company ‘heroes’.
Rituals and Routines- The regular actions and behavior of people that is an indication acceptable
behavior. It helps in determining what to be done in the given situation.
Symbols- Dress codes formal or informal and logos are the visual representation of the company.
Organizational Structure- It is consist of the organizational chart and authorities of the
organization.
Control system- It includes the methods through which organization is controlled such as quality
systems, financial systems, and rewards.
Power Structures- It involves executives or departments that have power and also involve the
level of influence on strategic directions, operations, and decisions (Sun, 2008).

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Leadership
Leadership can be defined as the process of influencing and motivating individual or group of
people in order to achieve a common goal. Good leaders are creators, they make a path for others
to follow.
Quotes of Leadership
“If actions of an individual encourage other people to dream, learn, do more and become more,
then that individual is considered as a leader”. – John Quincy Adams
“Leadership is the ability to convert vision into actuality”. – Warren Bennis (Pozin, 2014).
Model of Leadership- Four Framework Approach
Source [http://www.nwlink.com/~donclark/leader/leadmodels.html]
Four Framework Approach, recommend that leadership behavior is displayed by the leader in
four types of the framework: Human Resource, Symbolic, Structural and Political.
Human Resource- Leader in Human Resource trust in people, they empower, support, share
information, increase participation in the organization. When the situation of leadership is
effective, the leader is a promoter whose leadership style is empowerment, advocating and
supportive.

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Symbolic Framework- Symbolic leaders consider the organization as a theater to perform roles,
use symbols to grab the attention, frame experience by offering reasonable explanations of
practices and communicate a vision.
Structural Framework- Structural leaders concentrate on the strategy, adaptation,
implementation, environment, and experimentation.
Political Framework- Political leaders simplify their demands and what they can achieve through
their powers, they link organization with the stakeholders and can do negotiation if necessary
(Clark, 2015).
Path-Goal Theory of Leadership
The job of leaders is to support followers in achieving the goals and to offer essential direction to
support and confirm that their goals are well-matched with the objectives of the organization
(Hirt, 2016). Hence, Toyota provides proper training to their employees so that principle of
"Customer First” and “Quality first can be kept in mind and goals of the organization can be
achieved. In addition, internal recruitment helps Toyota to select a leader.
Leader Behavior Group Members Task Characteristics
Directive Leadership
Offer supervision and
psychological structure
 Inflexible
 Controlling
 Uncertain
 Indistinct rules
 Difficult
Supportive Leadership
Offers nurturance
 Unhappy
 Need Association
 Need Human Touch
 Monotonous
 Simple
 Ordinary and
mechanical
Participative Leadership
Offers participation
 Independent
 Control
 Clearness
 Uncertain
 Indistinct
 Formless
Achievement-Oriented
Leadership
Provides challenge
 High potentials
 Uncertain
 Difficult

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Motivation
Motivation word is derived from the ‘motive’ word which means wants, desires, needs of an
individual. Motivation is a process of inspiring people to perform and achieve the goals
(Management study guide, 2017). One of the important features of motivation is that it creates
willingness within the employees to give their best in their job or work.
Quotes of Motivation
"Wanting something is not sufficient. A person should have a hunger for it. Your motivation
must be completely convincing in order to face the difficulties that will constant in your way”. –
Les Brown
"Motivation is the art of influencing people and make them do what you want them to do
because they themselves want to do it". – Dwight D. Eisenhower (Brainy Quote, 2017)
Model of Motivation- Expectancy Model of Motivation
It is very important for a business to motivate employees for workplace performance, as the role
of all the employee in the organization carries proportionally more weight. Unlike other models
of motivation that concentrate on the needs, the expectancy motivation model focus on the
perception of the employee towards work and rewards.
Principles of the Model
The model of expectancy depends on three components. The first principle- Expectancy is the
bridge between performance and effort. The second principle- Instrumentality is the bridge
between reward and performance and third principle- Appealing reward.
Rewarding the Employee
The expectancy model says that employees should be confident and believe themselves as it
motivates them to perform the task and receive the rewards.
Attitudes
The model is about the attitude of each employee towards work, about themselves and the level
of trust they have towards their performance for receiving the rewards. This theory is based on
perception.

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Application
Each employee is concerned to know what their management is expecting from them. This helps
them in setting their mind and maintain the relationship between expectations and workload for
good performance (Metcalf, 2017).
Maslow’s Hierarchy of needs
Source [https://www.simplypsychology.org/maslow.html]
Maslow's Hierarchy of needs is represented different level of needs of an individual. The lowest
need is physiological needs, then is safety needs, social needs, esteem and self-actualization
needs.
Physiological and Safety needs: Employees of Toyota receive a good salary with job security and
safe working environment that is why their lower level need is satisfied. Toyota provides
different facilities to their employees such as recreational and child care facilities.
Social needs- Toyota promote teamwork and make their employees familiar with the company
and they do not discriminate between employees and managers. For example- They do not
provide private parking facilities, no private canteens, and no private offices.

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Esteem and Self-actualization- Toyota motivates their employees for solving their problems on
their own to increase their confidence so that their needs like esteem and self-actualization can
be satisfied (Denver, 2013).
Table of Maslow’s Hierarchy theory
Maslow’s Hierarchy of needs
Physiological: Food, cloth, and shelter
Safety: Job security, physical safety
Social: Identification and Affection
Esteem: Self-respect, success, and prestige
Self-actualization: Self-fulfillment
Table of Expectancy Theory
Implications for Managers Implications for Organizations
Define the results employees’ value. Reward is provided for good performance
Identification of good performance Planning exciting jobs
Ensuring the target achievement of the
employees.
Plan some rewards for encouraging and
building teamwork.
Conclusion
Toyota is one of the largest group of the automobile industry, as they provide a variety of
products to their customers by dividing the market into different segments. Structure of Toyota is
flexible as compared to their old centralized organizational structure. Their new organization
structure has helped them to increase the productivity. It is very important for Toyota to decide
which strategy to be used in which situation. Toyota is comprised of experts and leaders with
good experience but they should know which style of leadership to be adopted in different
situations. In addition to this, Toyota should also know how to motivate different employees by
identifying their needs. The organizational behavior of the Toyota Motors has been improved

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with time as they have made their structure flexible which has made its employees more
comfortable and productive. Every employee is following the culture of the organization which
has helped in developing the efficiency of the organization and increasing overall growth.
Recommendation
Leadership
 Leaders of Toyota should analyze future conditions to deliver future strategies in the
business.
 Leaders should develop the abilities to show the direction to employees to contribute to
the future challenges.
 Leaders should be confident to maintain the commitment.
Motivation
 Providing training to staff for quality assurance.
 Toyota should produce more eco-friendly cars.
 Should ask new ideas from the employees of the company.
Culture
 Toyota should consider the number of customers not a number of cars sold.
 Toyota should focus on producing hybrid cars because the price of petrol is increasing
regularly.
 Toyota should divide the authorities equally into their different units.
Global recommendation for Toyota
Toyota should provide proper training at different places where they are planning to expand and
where they have expanded their market so that all employees throughout the globe can
understand about the organization behavior of Toyota and it will help in the development of
Toyota business.

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References
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https://www.brainyquote.com/topics/motivation
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characteristics-analysis
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toyota-motor-corporation/

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Appendix
Appendix 1.1