Toyota used to have an advertising campaign in the UK with slogan “The car in front is a Toyota“. It’s certainly, despite all its recent troubles, the Japanese multinational that most Japanese companies would like to emulate, so when it makes major restructuring announcements, you bet Japanese companies in all industries are watching to see where it goes, hoping it will be the car in front that leads them down the right road.
Toyota is splitting itself into four divisions, to be managed as if they were four separate companies. Lexus International and Unit Centre (for components and manufacturing) are fairly self explanatory. More interesting is the establishment of Toyota no. 1 and Toyota no. 2. Toyota no.1 will look after Japan and other industrialised nations and Toyota no.2 will be targeting developing economies, with a mission to develop new cars to meet those market demands.
The Nikkei Business magazine has some comments from Kunio Tsunashima, Principal of Hay Consulting Group Japan, that many leading multinationals in other countries have split their organisations into developed and developing markets, using a matrix organisation to link regional organisations to central functions – for example IBM and GE – but in Japan only Toyota is attempting this highly complex structure. The aim seems to be to create a more resilient organisation, that can withstand any future shocks such as financial crises or earthquakes. If it looks like it’s working for Toyota, we can expect the indicators to start flashing for several other Japanese companies in the coming years.
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