Organization Financing: Toyota -- Evaluate

Organization

Financing: Toyota -- Evaluate how the organizational function FINANCE impacts the organizational structure of Toyota

Although the Toyota Motor Corporation "primarily conducts business in the automotive industry. Toyota also conducts business in the finance and other industries" ("Company Profile: Toyota," 2007, Reuters.com). From the customer's point-of-view, Toyota's financial services in business consist primarily of providing financing to Toyota dealers and customers for the purchase or lease of Toyota vehicles. It also provides retail leasing through the purchase of lease contracts originated by Toyota dealers ("Company Profile: Toyota," 2007, Reuters.com). Since few people have ready cash to purchase a new car, financing strategies and promotions are of thus great concern for Toyota's marketing department, and financial data such as the interest rate for borrowing funds to purchase a car is always of consideration in deploying overall organizational strategy.

Within the organizational structure, Tracey Doi, group vice president and chief financial officer for Toyota launched a pilot transformation project in 2003 for the accounting department called "Driving for Higher Performance," which involved full upgrade of the Oracle's PeopleSoft Enterprise Financial Management applications and the use of lean accounting techniques to reorganize all the company's financial data by profit center, so Toyota executives could look at company financials on a divisional basis. The company's stress upon continuous improvement and elimination of least efficient processes is thus embodied in its financial department. As a result the "Driving for Higher Performance" campaign (note the play on words of the company's general mission to produce better and better cars every year) Toyota is "now able to zero in on where there are major fluctuations" that deviate from its overall mission of excellence and "drill down on variances that could impact the forecast for the balance of the year," according to Doi. (Ozzimo, 2006) the use of profit center segmentation enabled Toyota to quickly reallocate its resources to meet the heightened demand in the U.S. For new models like the Prius hybrid and the Scion (Ozzimo, 2006).