M7X01372 - Organizational Innovation: Toyota Motor Corporation Report

This report analyzes organizational innovation at Toyota Motor Corporation, focusing on how the company utilizes its organizational culture to enhance human resource capabilities. It examines Toyota's shift to a product-based structure and explores various sources of innovation, including market position and competitive advantage, highlighting the company's strategies for low-cost production, differentiation, and catering to diverse customer needs. The report further discusses the impact of innovation on improving the company's leanness, emphasizing efficiency and cost reduction. It also addresses both the advantages and disadvantages of various innovation sources, such as market expansion and cost reduction strategies, while acknowledging potential job losses in the manufacturing sector. The conclusion underscores the importance of organizational structure in fostering business resilience and growth, while also noting potential drawbacks related to organizational flexibility in rapid problem-solving.

Organizational Innovation

Introduction
Organizational culture defines the employees’
reaction to the challenges the company faces in
the marketing world.
 Toyota Motor Corporation uses organization
culture to optimize human resource
capabilities in innovation.
Company recently made changes to its
structure to create a product-based
organization.

Various Sources of Innovation
Some of the Innovation Sources includes:
Market Position:
Toyota uses low cost and differentiation as a
general strategy.
They offer large four wheelers and SUV for
the outdoor types.
They offers cars for eco-friendly customers
along with standard cars for everyday use.
They provide vehicles for all price ranges.

Various Sources of Innovation
 Competitive Advantage:
 they provide luxurious world-
class products at the lowest
possible prices.
 price safety policy, excellent
customer service standard
and lower price ranges helps
them to compete in an
international level.
 This helps them to compete
other companies like Suzuki,
Honda, Nissan and Ford.

Impact of innovation in improving the
leanness of the company
Leanness process management helps the
organization to stimulate their operational
success.
primary aim is to increase efficiency and
decrease costs.
It challenges mass production practices and
provide a range of operational services.
This operational services leads to the better
quality product.

Advantage and Disadvantage of Various
Sources of Innovation
Market expansion: Innovative
technology (Internet,
social media platforms) help to promote
their business via a single website.
Cost reduction strategy: Technical innovation
helps them to keep production cost at
a lower level. As a result of this, employees
Lose their jobs in the manufacturing market.

Conclusion
This organizational structure facilitates
business resilience and continued growth.
Toyota’s organizational culture presents
possible drawbacks as it reduces
organizational flexibility in rapid problem
solving.

Reference
• Camisón, C. and Villar-López, A., 2014. Organizational innovation as
an enabler of technological innovation capabilities and firm
performance. Journal of business research, 67(1), pp.2891-2902.
• GmbH, f. (2017). Toyota Plans To Alter Organization Structure To
Boost Business Innovation. markets.businessinsider.com. Retrieved 29
November 2017, from
http://markets.businessinsider.com/news/stocks/Toyota-Plans-To-Alter-
Organization-Structure-To-Boost-Business-Innovation-1001793507
• The Contradictions That Drive Toyota’s Success. (2017). Harvard
Business Review. Retrieved 29 November 2017, from
https://hbr.org/2008/06/the-contradictions-that-drive-toyotas-success
• Yang, T., Kuo, Y., Su, C.T. and Hou, C.L., 2015. Lean production system
design for fishing net manufacturing using lean principles and
simulation optimization. Journal of Manufacturing Systems, 34, pp.66-
73.

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