Flat structure flats out experience!! - Organizational Behavior Case Study

Case Study:
Flat structure flats out experience!!
Greg stepped out of his car with the intention to resign from his current position. Before entering
the office, he spends a couple of minutes in the car reminiscing his journey of over 17 years at
Toyota. Toyota manufactures and sells cars across the globe and is considered to be an excellent
recruiter. Greg’s experience with Toyota has not only reaped him substantial financial benefits,
but he has also been highly satisfied with the meaningfulness of his job.
Need for new!
Over the last 6 months, Toyota has been facing losses owing to lack of innovation. Competitive
brands are introducing new cars with efficient designs that cater to the needs of young drivers.
On the other hand, Toyota seems to be failing at addressing new customers. The current
customers of the brand are all aged over 38. These customers have been loyal to the brand since
a long time but these customers do not change their cars often and hence it is imperative that
Toyota reaches out to new customers to ensure long term sustainability.
The road to flatness
In order to foster innovation in the business, Toyota decided to introduce a flat organizational
structure. A flat organizational structure is known to have fewer or no levels of middle
management between the executives and staff (Ashkenas et. al, 2015). The news came via
various Emails, team meetings and organizational trainings. Thousands of middle level positions
were eliminated and seating structure at the organization was modified to encourage open
communication. Privacy settings of various communication channels were changed to include
more staff into organizational discussions.
A flat organizational structure creates an enhanced sense of ownership, fosters creativity and
improves the decision making process (Lee et. al., 2015). Junior level employees were allowed to
offer their opinions of the design and marketing strategies adopted by Toyota. The senior
management also adopted the open door policy to encourage free and transparent communication
in the organization. Open door policy involves the seniors of the organization leaving their doors

open in the office. This is done to encourage open communication and let their employees know
that they are available for communication (Docherty, 2015). Toyota also redesigned team
meeting structures. Earlier, it was the senior members of the firm that communicated during
these meetings. However, now new employees and young employees were encouraged to share
their ideas and opinions.
Structure and culture go hand in hand
The energy in the office premises completely changed. People had no idea that these youngsters
were so enthusiastic, full of new ideas and had a massive risk appetite. Within no time, they were
introducing new strategies, offering their opinions and thinking entirely out of box. Toyota had
never felt so energetic before. Many employees who were constantly warned for reporting late to
office were now working overtime and organizing meetings. The organisational culture at
Toyota was motivating. There were new teams, new groups and all of them seem equally
motivated to get the new cars launched. People created social media communities to help
employees communicate better. The number of on the job trainings increased and employees
were given the liberty to work with different departments to enhance their learnings.
There were various youngsters who started working with the Marketing and PR department.
Their insights helped the firm in adopting digital marketing strategies. Various social media
campaigns were launched which helped in creating an improved brand identity and enhance
awareness about the brand. These strategies helped the brand in reaching out to the youth.
Various youngsters participated in these campaigns and felt more connected with the brand.
Social media enhances brand engagement with its customers (Dessart et. al., 2015)
It was during this time that Corolla, Yaris and Prius were launched. In order to target the younger
demographic, Toyota had priced the entry models at a lower price and high end models were
premium priced. This helped the firm in maintaining their customer base and targeting younger
customers. All these models were a major success and celebrated worldwide acceptance.
In the middle of this pomp and show, the HR manager, Diana, released a report to the company
executives. The report clearly stated that despite the improving performance and culture of the
organization, the attrition rate was rising. This especially included senior employees who have a