Mitsubishi Motors Corporation has planned on restructuring the organization. Major structural change would be the slimming down of the department by almost 100 which is to improve the process of making decisions and also to clarify the duties and accountabilities. There have been no changes in the principles of business ever since the beginning. Realizing the change in values for society as well as environment, the company has planned on revising its values: first will be the contribution of the company in enriching the society and global environment; maintaining transparency, honesty, and fairness in business; and expansion of business globally. More emphasis shall be given on treating the customers to raise the level of trust. For this purpose, Quality Affairs Office would be set along with Corporate Social Responsibility Promotion Office under the direct supervision of CEO. Business Ethics Committee would supervise the efforts of company; and a Corporate Restructuring Committee would be set under CEO which handles the issues of revitalization. The new plan is to give control directly to the CEO and the COO; all the management departments would be supervised by the CEO while those which were involved in executing the operation of business were supervised by the COO. With direct supervision of the COO and CEO, each department and function would have clear accountability and responsibility.
All the changes that have been identified and discussed in this case refer to the cultural and environmental changes in the company. The overall external environment has impacted the business in a way that the need has arisen to alter the internal culture or the environment of the organization as well as to completely restructure the company (Barkema and Schijven, 2008). It can also be characterized as the ‘bumpy incremental change’ where both the environment and the internal changes have to be made (Kogetsidis, 2012). MMC has seen a shift in values and also the global pressures as well as the legal requirements for the protection of the consumers; this has been integrated with less efficiency and so, the management has realized the need to implement the changes. Within this category, the change is implemented in the means so that the goals can be achieved (Griffin and Moorhead, 2012); to improve efficiency, the number of departments is reduced and clear information about responsibility is given. Further, to make sure customers are valued, separate committees are set.
The type of structure that was being followed in the organization ever since the beginning was the bureaucratic structure where there are numerous hierarchies. A well defined division of labor; all the activities were done based on those defined set of guidelines that were written when the organization began. But since the organization has studied the requirements of the external environment, it has realized that this rigid structure is not what is needed. The company requires a flatter structure where the span of control is wide; the levels of the structure are to be reduced while retaining the number of the staff (Vaccaro and Jansen et al., 2012). The company has done restructuring based on departmentalization where the focus is on outputs and all the departments would report directly to the CEO and the COO as has been clearly mentioned (Riahi-Belkaoui and Bannister, 1994). With this structure, the poor coordination would be overcome and there would be fast response to the changes in market conditions.
Executive Decisions
As Mitsubishi plans to implement the multidivisional structure; there are certain advantages as well as disadvantages which include: the use of the skills of employees can be maximized while the market knowledge is specialized; more opportunity to innovate; the specialized capital can be used in this structure. A major benefit is that through this structure it becomes easier to focus on the target customers especially when different products are made for different set of customers. So, the goal of the business to concentrate on the customers is also made easier through this structure (Natividad, 2013).
Some of the disadvantages include the duplication of the functions; as the departments have been reduced, so there shall be an overlap too from one department to another. There can be more complexity in coordinating the practices and policies in such a structure (Riahi-Belkaoui and Bannister, 1994); in addition, reporting directly to the CEO and the COO is not only costly for the business but also would burden them a lot. With a centralized decision making, there are more chances of wrong decisions because the CEO or the COO is not directly in contact with the basic functions (Redmond, 2013); it would also become difficult for them to control the issues at those levels.
References
Barkema, H. and Schijven, M. (2008). Toward unlocking the full potential of acquisitions: The role of organizational restructuring. Academy of Management Journal, 51 (4), pp. 696--722.
Griffin, R. and Moorhead, G. (2012). Organizational Behavior. 10th ed. Oklahoma: Cengage Learning.
Kogetsidis, H. (2012). Critical Systems Thinking: A Creative Approach to Organizational Change. Journal of Transnational Management, 17 (3), pp. 189--204.
Natividad, G. (2013). Multidivisional Strategy and Investment Returns. Journal of Economics & Management Strategy, 22 (3), pp. 594--616.
Redmond, W. (2013). On Size and Formality in Business Organizations. Journal of Economic Issues, 47 (3), pp. 689--704.
Riahi-Belkaoui, A. and Bannister, J. (1994). Multidivisional structure and capital structure: the contingency of diversification strategy. Managerial and Decision Economics, 15 (3), pp. 267--276.
Vaccaro, I., Jansen, J., Van Den Bosch, F. and Volberda, H. (2012). Management innovation and leadership: The moderating role of organizational size. Journal of Management Studies, 49 (1), pp. 28--51.
