Toyota has a global geographic structure, grouping the organisation activities; including management, by geographic regions (Deresky, 2006). This structure benefits the organisation by focusing on activities in local American market conditions, showing concern for local customers’ needs (Aghazadeh, 2003). Competitive advantage may arise from the production or sale of a product adapted to a particular country (Deresky 2006).
The result is relatively flat hierarchy and management tends to be decentralised, compared with Ford having a centralised structure (Fang & Kleiner, 2003). However, strong management support is crucial a centralised structure, as demonstrated by Ford, who are having industrial relations problems (Professional Engineering, 1999). As Toyota employs a bottom-up approach, employees participate in new product development, product modification and share decision making. This method is most frequently used in their Research and Development department.
Toyota America personnel (whether staff or management) have the same uniform, car-park and cafeteria; whilst engaging in company songs, ceremonies and social gatherings as one (Fang & Kleiner, 2003). This builds and sustains Toyota’s strong culture. Fang & Kleiner (2003, p.118) explains “management and labour share a common oneness in an effort to minimise the differences”, further strengthening Toyota America. This wellbeing corporatism gave rise to employee empowerment, job security, job enrichment and led to employee commitment and achievement of Toyota’s overall goal (Jacobs & Herbig, 1998).
Toyota’s competitor’s GM and Ford have reduced their employee compensation benefits severely, as it reduces their production costs per car by $1,500US. In contrast, Toyota maintains a good employee relationship by sharing concerned for their total welfare and uses this to motivating employees. Benefits at Toyota include skill improvement workshops, low interest rate loans, housing...