Business Organizational Structure of Toyota

LO1

P1 Different types and purposes of organisations

Every industry has the obligation to fulfil the demand and supply of the consumers. Diverse organizations have various purpose in perspective of customers. Business cites to the adaptable procedure of skills and materials agreeing to the demand of consumers. Business surroundings contains different elements such as customers, resources, competitors and technological development. It is witnessed that resources such as physical and financial funds are the most critical components of any firm. International organizations like these gains competing plus points by using quality and marketing strategy(Andersson, Forsgren, and Holm, 2015).  the purpose of different organisation are:

Public Organisation: These organisation includes which are owned and controlled by the government department. The stake is divide in the form such that Public has share of 51% and the remaining in the hand of private players. Public company has to give the dividend on time to stakeholders. The examples of public firms are banks, hospitals, etc. For example In UK their is a public company named NHS the objective of the company is to provide the health aid services to the people of the state. The purpose of the company is :

To offer the health care services to the patients.

To provide the quality in service to the patients.

To provide the medicines on time to the patients.

Private Organisation: These are the companies which are owned and managed by private players. The company is controlled by two or more than two directors. Business firms has to follow various rules made by the UK government to do the business. The directors has unlimited liability. The main aim of private company is to earn maximum profit by fulfilling the needs and requirements of consumers. Private firms aims to make finest employment of resources to modify efficiency. E.g. of private firms include retail firms like Tesco, Sainsbury etc.  The company which is taken for example is TOYOTA. The main purpose of this type of compnay is to provide the quality aand durable products to the consumers. To follow the CSR policies and create a better organiational culture and environment.

Voluntary: These are the non-profit firms which works for the social welfare of the society. These kind of organisation works on the donations from public and the budget distributed by the government. The main aim of these kind of organisation is to do the welfare of the society (Storey, 2016). Example of this type of organisation includes Oxfam. This was established in the year 1942. They are  classified under charitable trust act in UK. The purpose this organisation are:

To raise the living standards of the people in the society.

To organise some cultural events on the regular basis.

P2 Explain the size and scope of a range of different types of organisations.

There are three types’ organizations such as private, public and government organizations. It has been noticed that limited companies are commonly corporates, they have their own legal identity. The holding and other assets are managed in the name of companies not the members of the company. Therefore, the financial obligation of the members are limited. Limited companies is incorporated by two or more members. various documents such as MOA and AOA are submitted by the promoters in order to formulate the company.

The private companies always have a shareholder but company can offer large share to the public. The organization can offer huge amount of share to those people who want to sign business contracts with this organization. It is noticed that Toyota started its business as public limited organisation in 1937. There are three important shareholders of Toyota such as TYO etc.. The organization has one leader in every branch of the organization. Currently the organization has $1.5tn capital in UK (Boons, and Lüdeke-Freund, 2013).

Toyota

Size: it is one of the biggest brand in the automobile sector. As the competiotin is raising in the market the organisation has take certain steps inorder to acheive the competetive gains. The organisation has created a strong brand image in the world and has opened lots of units in different partof the world. The firm is retainin the loyal customers because they provide the best quality of products in the industry. The have created r&d department in different countries so as to develop the product accordfing to the customer need.

Scope:  The organisation is making their product keeping in mind the different age group. The organisaton should make changes in the their policies to acheive the competitive gains.

Vision: The vision of the company is to become the leader in the automobile sector. They have to acheive the objectives that has been defined by the managers at the upper level. They should offer productd that are highly safe and provide the best performance in the industry.

NHS

Size: The organisation is one of the leaders in this sector. They work for the betterment of the society. The company was established in the year 1948. the policies that are created by the managers of the organisation includes the plans to provide free service to the people. There are more than 2.5 million people working in the organisation and providing their best service to them.

Scope: This type of service that the organisation is providing has the good scope in the future as nowadays more people are prone to disease therefore the services of the people would be required in day to day.

Vision: The aim of the organisation is to provide the solution for the problems that are occuring in the society.

OXFAM

Size: it is the biggets organisation in UK and is working with 25 charitable trust. They working to improve the eonomic conditions of the people in the organisation and recruits employees who are social.

Scope: The scope of the organisation is to acheive the pre set goals that are made by the managers of the organisation.

Vision: The vision of the company is to provide the economic growth to the people of the organisation so that the countries overall growth objective can be achieved.

Chosen organisation for the purpose of study is Toyota. It is the private company and has the constitution of primitivism. It is the multinational organisation having operation in different part of the world. It is working as wholly owned by the directors and the shareholders within them.

LO2

P3 The relationship between different organisational functions and how they link to organisational objectives and structure

The various functions of organization are Human resource, selling and marketing, operations and accounting.

Marketing department: It brings the relationship between the market and the organisation to satisfy the customer. This process is beneficial for both the consumer and the seller. The organisations like Toyota get the help of marketing department in building the new products and innovating new ideas which increases the quality of the product. The competitive pricing policy of Toyota helps them in creating the best business environment.(Chen, Chiang and Storey, 2012).  The system developed by Toyota helps the customer in conveniently purchasing the product and the services. As the demand for their product is high this helps them in expanding their production department and maximising their profits.

Finance Department: This is considered as the the main department which is responsible for the operation. This department provides the report on the different performance and position. The company has distributed its fund to the various department. For maintaining the cash flow the organisation has to check at regular inter well that it has sufficient amount of cash flow. The performance of various department is monitored by the auditors(Cohen and Kietzmann, 2014). Finance of the organisation like Toyota ha surplus fund with them. The company has established the treasury funds to help the business to expand. Hence it enables the organisation to get the best result and reduce the risk of lose. It is noticed that the financial department of the firm works in the proper way so as to fulfil the requirements of the organisation.

Accounting department: This type of department accounts all the financial matter such as purchases, sales stock record and many more. The cash flow department in the organisation is to be looked after and maintained by the accounting department. This department is responsible for noting every financial part of the organisation.

Human resource department: The company has arranged the HRM department  in a way that it look after every employee of the organisation in an efficient way. They suggest the HRTM department in a way that it manages the employee's to give 100% efficiency for their work. This department also emphasis on the policies and  the legislation to be followed by the employee's. The role of HRM involves various functions such as recruiting, monitoring, employment laws and training and development of the employee's.

The higher level of manager and the leaders decides the strategies as they are the key players in maintaining the culture in the businesses (Craig and Campbell,  2012). After this the employees and the members of the organisation has the role to fulfil the goals of the organisation.

The key concept of Toyota includes the factor that limits the process of production in the limited time span.

Horizontal relationship: It includes flat structure within the organisation. In this structure there are few managers and more authority is granted to holders of rank. This system allows employee's to get feel empowered. In the context of Toyota if this structure is followed then it will enable them to motivate the employee's so that they will work to achieve the organisational goals.

Vertical relationship: in this type of organisation the structure that is followed is pyramidal top down structure. As the business owner manager will make all the major decisions and policies will made accordingly. In Toyota this will help them to achieve the desired goals. Vertical means in organisation the work is done from upper to lower department.

As the company chosen for the purpose is Toyota and is one of the largest manufacturer of auto mobile. The structure that is followed is departmentalisation as there are different department for the purpose of manufacture. This will help them to produce products at a cheaper rate.

Source: Horizontal organization chart, 2014 

LO3

P4 Demonstrate both the positive and negative influence/impact the macro environment has on business operations:

External environment refers to the economic condition of the firm in the country. The macro environment factor includes GDP of the country, spendings, and its fiscal and monetary policies (Deasy, et. Al., 2016). The macro environmental factors includes the uncontrollable factors that impacts the decision making strategies of any organisation.

The negative and the positive aspects are discussed by analysing PESTEL factors:

Political

The political boundaries are the main factor that influence the operations of the business. The company has tackled the various political boundaries which had affected its expansion and growth of the business. The factors that have affected the business of Toyota are:

the issues and opportunities faced by the organisation are:

The organization has faced issues and opportunity due to some reason such as:

• Political instability in most of the markets in which it functions
• the agreements done by the government of  Free trade 
• the support that has been taken by the government for promoting eco friendly products 

Positive impact:

the stability in most of the market has impacted in a good way and has provided the opportunity to Toyota. This has helped the company to make its business grow in and nurture in that market. Along with this the free trade agreements that are made by the government has also helped them in increasing their share and turnover. The governments provisions regarding increase in the eco friendly products has created opportunity for the company to innovate new product.

Negative impact:

            High amount of tax implementation and high amount of import duty impacts the organisation working in negative way. They are responsible for decreasing the profits of the company.

Economic

In Toyota’s case, the economic macro factors which influence the operation of the organisation are discussed as follows:

• The demand of their currency being weaken s compared to US dollar.
• The growth in the economy of the world at a rapid rate.
• The growth rate of developing countries as they are developing at a high rate.

Positive impact:

The opportunity to improve the export business has been analysed by Toyota. It is already the second largest market in Japan. Also the improvement of economies in the world has created the opportunity for Toyota to improve their turnover.

Negative impact:

The decreasing rates of currency create the disadvantage for the company (Hair, et. Al., 2015).

Social

The main factors that affects the social culture in Toyota are as follows:

the main social/sociocultural external factors in Toyota are as follows:

• the increasing demand of  hybrid cars
• the Increasing demand of electric cars
• widening of the economic and the financial gap among the population.

Positive impact:

As the company is already producing hybrid and electric vehicles this will help them to satisfy the demand of the customer and provide the m loyal customers.

Negative impact:

As the company has analysed the financial gap therefore they have to create the products according to this gap. Because of that they cannot focus on the production of one segment of car.

Technological

The different technological factors that affects the functioning of the company are:

• the increase in the use of e-commerce
• the increase in the demand of Mobile technology
• rise in the rate of Cybercrime

Positive impact:

As the company has the opportunity to improve e-commerce capabilities. Also the company can contract with the third party so as to promote their sales (Hilton and Platt, 2013).

Negative impact:

The company has the threat from the cybercrimes as the increase in use of technology can return to hacking of the cars cyberly.

Environmental

The major environmental factors that influence the company are:

•             Rapid change in the world climate
•             the barrier of declining oil reserves
•             the increasing emphasis on the use of sustainable resources.

Positive impact

it is observed that the company has the opportunity to make the products more environment friendly so as to increase the mileage of the cars. The protection of environment protection law so as to attract the customers.

Negative impact:

If the organisation is not fulfilling the environmantal regulations then it impacts the brand image.

Legal factors

The legal factors creates the positive as well as negative impact on the functioning of the organisation which are as follows:

• By improvising the intellectual property laws.
• By fulfilling the complex laws of environment
• By following the consumer laws and their protection

Positive impact:

The organisation has the opportunity to expand with the reduced concerns of not fulfilling the requirement of law (Savrul, Incekara, and Sener, 2014). The organisation has delivered to deliver the good quality product so as to satisfy the needs of the customers.

TASK4

P5 Determine the internal strengths and weaknesses of specific businesses and explain their interrelationship with external macro factors

Strength of Toyota

The greatest strength of Toyota is that it offers high amount of capability to keep the rank where it is considered as the worlds largest auto mobile maker(Sena Ferreira, et. Al., 2012).

SWOT analysis helps the organisation in identifying the capabilities of Toyota.

Strengths of Toyota

• it has a strong brand image in the world.
• It has the capability to innovate rapidly.
• The best supply chain it has in the world.

Weakness of Toyota

            The weaknesses are mentioned below:

• it maintains the structure of hierarchical organization
• the mangers maintains the secrecy in the culture of the company
• the effect that it has got because of product recalling

Opportunities for Toyota

            The opportunity and threat for the company is defined on the basis of PESTAL analysis these are defined below:

            The opportunities for the company are:

• Expanding their  market to the larger world. If the political environment in the country is stable it will help them to expand their business positive way.
• Maximising the turnover and the profits of the company. If the country is having economic stability then company would be able to expand their turnover.
• Emphasis on providing  quality products to the customers. Technological factors that company has, will enable them to produce the products that are quality effective.
• the alliance with the other organisations. If the legal requirements in the country are easy then company can enter into alliance with other organisation so as to operate in better way

Threats for Toyota

• the effect of increase in the competition in the market. If the country has lots of companies working in the sector then it will lead in reduced turnover.
• increase in the price of the suppliers. If the economy of the country is not stable then the prices of raw material will increase leading to increase the price of the final output.

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P6 Strengths and weaknesses interrelates with external macro factors

Strength which are related to external factors such as Political, economical, social, technological, legal.

The Strength of Toyota are based on the financial, economic and Technological factors (Smith, 2016). The component of the SWOT analysis describes the factors that can make the company to improve their business.

 The important opportunities are described below:

•             Development and Growth of market which are increasing in the developing countries 
•             The increase in demands for cars which are fuel efficient
•             The increasing interest in the customers in the of fitting advance electronics

Weakness that are related to external factors such as Political, economical, social, technological, legal.

Threats basically are dependent on the competing background. The primary threats for the company like Toyota are mentioned below:

the growth of low cost competitors present in the market

the increase in the innovation techniques within the competitors.

CONCLUSION

 The report has analysed the size and the scope of a range of different types of organisations (Storey, 2016). The relationship between various departments functions and how they linked to companies objectives and frameworks. This report has prescribed the PESTLE analysis to measure the macro-environment effect of the firm. Apart from this the company has determined the inner strength and weakness and extraneous strength and weakness of the company. 

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