Strategic Management of Toyota

The Toyota culture works to reinforce the feeling and the fact that employees are all members of teams and do not function as isolated. The organizational structure is designed to support teamwork. Toyota was not the only organization to discover the power of a coordinated team structures. At Toyota, teamwork is about solving problems shared horizontally. The goal for Toyota in setting up the ideal organizational structure is to be able to have a complete understanding of the purpose and objectives of the organization by everyone, especially managers and supervisors. However, this has not been ultimately achieved.

Toyota has been striving for a relatively flat organizational structure while still aims at maintaining the right group size. This enhances people to, effectively, work together in solving problems. The managerial problem and the lack of understanding amongst its top level management have made the company not to realize its intended objectives. When designing the organization, there can be a conflict between the desire for a flat organization and the needs for works groups small enough to, effectively, solve the problem together. The easiest way to make the organization flat is through a large span of control (Hill, 2009). Toyota’s system is heavily dependent on teams led by highly skilled leaders. They do not believe in work groups without a leader. In fact, Toyota believes the ideal work group has five to seven people.

In order to achieve strategic success, the typical corporate departments like Human Resource, quality, and engineering must be deeply involved with the work teams. They will provide daily support to help them better add value to the customers; however, this is not the case with Toyota Company (Mockler, 2002). The entire organization should be focused on delivering customer value, which occurs through the team members.

Another key strategy is to support distributed decision making by the line organization with clear standards that enable most decisions to be made in real time. As such, it will be achieved when there is no interference from support groups and higher management levels. If this process is not flat, the lower levels will have the tendency to leave the decision making to management. These “invisible” levels of management are present in many organizations, even if they will have the tendency to leave the decision making to management. For Toyota, it is more beneficial to be flat in decision making, in order to create a smaller span of control. The goal is to provide each level of management the flexibility within their respective areas of control to make the decisions to buy the relevant equipment and services (Mockler, 2002).

Finally, to balance having a flat organization and optimal span of control is the team structure. When describing Toyota’s team leader structure, the span of control is not lean. The Toyota standard is that the team leaders spend 50 percent of their time online, working on a process and the other 50 percent of the time off-line answering clients, coaching, supporting the team members, and solving problems.

In conclusion, Toyota should focus extensively on its human system as it operates in a broader environment and must be tightly integrated with the environment. It starts with the business purpose of mutual prosperity and targets for quality, cost, delivery, safety, and morale. Inputs to the people value stream include Toyota’s philosophy and values. The key to the successful standardization and replication of the Toyota culture have always been Toyota’s planning and up-front work.