Introduction

This paper focuses on organizational culture of two companies, which are Toyota and Mercedes-
Benz. The purpose of this paper is to compare and contrast the differences between organization
in regards to the influences of national culture on organization culture, on leadership and on the
organizational structure.

First of all, Kluckhohn quotes culture as “pattered ways of thinking, feeling and reacting that use
symbols for transmitting, form distinctive achievements of each human groups, including of
artifacts and attitudes; norms and values and basic assumptions (Hofstede, 1984).”

Organizational culture has been described as the shared values, principles, traditions and ways of
doing things that influence an organizational member’s way of acting, decision-making and
distinguish the organization from other organization. It is how “things are done around here
(Robbins and Coulter, 2016)”.

National culture is the particular set of economic, political and social values that exist in a
particularly country. Greet Hofstede argues that differences in the values and norms of different
countries are captured by the six dimensions of culture which are power distance, uncertainty
avoidance, masculinity vs femininity, individualistic vs collectivism, short-term orientation vs
long-term orientation and indulgence vs restraint. However there is not necessary for national
culture to influence organizational culture in all aspect (George and Jones, 2012).
Question 1

Japan is one of the most long-term oriented societies which they look at the big picture and focus
on long-term investment such as R&D. Toyota organization culture is influence by Japan culture.
Toyota applies set of values Toyota Way which based on two foundational principles which is
kaizen (continuous improvement) and respect people. Kaizen is set up for continuing vision,
working on challenges, continuous innovation/improvement, and look for solution for problem.
Toyota has made this to anticipate well for its future in this industry (Wallis, 2017).

In other sides, Germany is in long-term orientation too. They are perseverance and looking for
future. This dimension is influenced to the Mercedes-Benz organization culture. Mercedes-Benz
is forward thinkers. They run business in continuity and place the frame for innovations,
expansions, and achievements. The plans will be implemented as a model for success in the
organization (Robinson, 2015). Mercedes-Benz businesses are performing based on the
principles of integrity code in daily operations. Thus, these assist Mercedes-Benz to be
successful over the long term.

Next, Japan score 46 for individualism, which means is more towards collectivistic society (refer
to Figure 1.1). Japanese is on group-oriented and place group harmony significantly. Toyota
encourages employees to exercise on teamwork. Employees are divided into teams depending on
their roles. All employees work based on the group benefits instead of personal (UKEssays,
2015).

It is significantly higher of individualism in Germany, which they focus on individual time and
freedom. Mercedes-Benz organizational culture is more towards individualism but departments
will collaborate. Car manufacturing is a decathlon. Thus, departments need to collaborate to
produce a better car (Afhüppe, Fasse and Murphy, 2016). The designers, the research,
engineering and production departments work together to manage vehicle dimensions, material
concepts and in manufacturing processes, to ensure productivity (Mercedes-Benz.com, 2018).

Moreover, Japan has high score in masculinity. They focus on assertiveness, performance,
success and competition and overlap of gender roles (Clegg, Kornberger and Pitsis, 2016).
Toyota has more towards masculinity society. This is showed in 2015, there is a new round of
promotions and there are 86% Toyota executives are locals. However, there is no position for
women as Toyota lack of gender diversity as compared to companies in other countries
(Mukherjee, 2016).

It is same to Germany as German people are care for quality of life and status is often shown by
cars, watches and technical devices (Foster, 2015). Although Germany is masculinity society,
sometimes it also shows of femininity dimension. Mercedes-Benz is reflected in femininity
dimensions which men and women are given equal chance in the organization. Company views
women as significant part to the market and also bring essential perceptions during meetings.
Mercedes-Benz’s goal is to increase 20% of executive management positions for women by
2020. Mercedes-Benz will organize events for both men and women too (Daimler, 2018).

Figure 1 comparison between Japan and Germany in the Hofstede’s culture dimension

Source: https://www.hofstede-insights.com/country-comparison/germany,japan/

Table 1 similarities and differences between Toyota and Mercedes-Benz

Similarities
 constant improvement and innovation for new models
 own values / codes to ensure long-term success
Differences
Toyota Mercedes-Benz
 Toyota employees do not have good  Mercedes-Benz employees does have
balance between work and private good balance between work and private
life. life
Question 2

Toyota company leader, Akio Toyoda’s is using transformational leadership style (Faizli, 2017).
Transformational leaders have charismatic, special ability to bring change and innovation in both
followers and organization (Samson and Daft, 2008).

Japan is in high power distance, thus it influence Akio Toyoda transformational leadership as
this may require high power distance. Transformational leader may behave like an autocratic
manager hope to gain followers for support his cause (Lawrence, 2017). Akio Toyoda wishes to
make changes in Toyota by revamp organizational structure. Thus, he needs to have distinctive
and autonomous power bases to convince and direct employees to his new vision of transforming
Toyota. With the power, employees are expected to accept orders that are told.

Next, Japan is in collectivism societies, thus, it influences the leadership style of Akio Toyoda.
Followers will be more loyal to their leaders and will follow the vision and mission of
organization (Kuehneisen, 2013). In bringing changes, Toyoda needs followers to help in
influencing the employees and also authorize the employees to aware of his vision. Toyota new
appointed vice presidents and managing directors are helping him to achieve the vision of
transforming Toyota instead of focusing on personal benefits. Toyoda needs all the employees
work collectively to achieve the vision (Faizli, 2017).

Akio Toyoda leadership may require low uncertainty avoidance. This shows that Toyota was not
influence by Japan national culture. This is because transformational leader must able to
tolerance with risks, uncontrollable and uncertain situation. Toyoda is willing to take risks to
evolutionary change to the organization (Faizli, 2017). He accepts wide range of employee’s
opinions and beliefs. Even if fails, he accepts it as learning experience and will use as a reminder
for future endeavors (Faizli, 2017).

In Mercedes-Benz, Dieter Zetsche can be described as a participative leadership (Gitman and

McDaniel, 2007). Participative leaders delegate authority to others and encourage participative
(Samson and Daft, 2008).

German is in low power distance, thus this influence Dieter Zetsche participative leadership style.
The leader prefers followers to give opinion and engage in decision-making (Clegg, Kornberger
and Pitsis, 2008). Zetsche prefers freewheeling communication style as employees are being
consulted. He also actively looks for and encourages participation of employees in decision-
making and other work-related issues such as goal-setting, policy-setting (Yammouni, 2014).
Employees are empowered to make decisions too.
Germany community is more individualistic-oriented, while the engineer, designers and others
belonged to a culture that is more collectivistic. Thus, it influences Zetsche’s participatory
leadership style. Individualism tends to be more effective as many ideas can be generated from
well-educated and knowledgeable employees and there is not group conformity problem.
Engineer or designers will base on self-interest and give out personal opinions but will
collaborate with other departments for the purpose to complete producing a car. With
participation of individual employees and empowerment, Zetsche is able to improve
organizational to produce better car and stay ahead in the industry (Jiang, 2015).

Moreover, Germany is high uncertainty avoidance which people is low tolerance for flexibility
and is prefer standardized management in organization (Dwyer, 2013). However, German culture
does not influence Zetsche leadership style. Mr. Zetsche plans, Leadership 2020 to abolish six
levels of hierarchy in order for all employees to participate in generating ideas even at the risk of
failure (Afhüppe, Fasse and Murphy, 2016). He empowers employees to make innovation
instead of just follow instructions from leaders so can get more solutions in this non-bureaucratic
workplace.

Table 2 similarities and differences between transformational and participatory leadership style

Similarities
 innovative and flexible
Differences
Toyota-transformational leadership Mercedes-Benz-Participatory leadership
 Based on employees strengths  Not based on employees strengths
 Encourages creativity  Encourages participation
 Motivate others (Intrinsic)  Involves employees in decision-making
Question 5

Toyota has a divisional organizational structure (Gregory, 2017). It means grouping

organizational function into a division. Each division has a complete set of functions (Boddy,
2014). Toyota change to divisional structural with geographical and product based divisional in
2013.

Figure 2 Toyota’s divisional organization structure

Japan with high power distance was influenced previous Toyota strong centralized global
hierarchy, hierarchy of seniority which was more like a spoke-and-wheel structure. However,
Toyota changes structure in 2013 to a divisional organizational structure. Thus, Japan national
culture is not fully influence Toyota currently. After the reorganization, Toyota still continues
with global hierarchy but the decision-making processes are decentralized. Company has
increased the decision-making power for each divisional heads. Nevertheless, all business-unit
heads still need to report information to Japan headquarters (Hierarchy Structure, 2018).

Moreover, Toyota is influenced by Japan high uncertainty avoidance culture before the product
recall crisis in 2009. Toyota culture previously was more rigid and risk-averse. To avoid the
same problem which is slow response times occur, Toyota change to divisional structure in order
to provide more flexibility in management. This flexibility and less bureaucratic management
allow Toyota respond to issue in a quicker way (Gregory, 2017). Each department manager can
take action to solve problem before it become severe.

Toyota changes to divisional structure due to long-term orientation. Toyota previous

organizational structure was widely criticized for slow response times to deal with safety
issues. Thus, Toyota changes structure for future use when crisis happens again. The decision-
making process will be faster as time is important. They can be more competent in respond to
regional market situation. So, using this structure assists business flexibility and continued
growth for long-term (Gregory, 2017).
Mercedes-Benz has a functional organizational structure. It is grouping of positions based on
skills, expertise and resource use into departments and each functional activity performing
specific organization’s task (Boddy, 2014).

Figure 3 Mercede’s functional organization structure

Functional structure is seemed to be towards high power distance and thus this is not influence
by Germany culture. In Mercedes-Benz, there has six level of hierarchy and employees need to
respect hierarchical of authority. They are having is centralized structure and top-down
management approach in the organization. Employees are distributed work according to their
skills (Mohamed, 2012).

Moreover, functional structure is more towards high uncertainty avoidance. This is influence by
Germany culture as they are rigid and expect high conformity. This structure applies uniform
ways of operation and the high scale of formalization because of bureaucratic nature of this
structure (Davoren, 2018). In Mercedes-Benz, decision-making process is quite slow and
inflexible because it is centralized form of structure. All decision needs to involved six levels of
hierarchy (Afhüppe, Fasse and Murphy, 2016).

By having functional structure may cause decision-making slow, inflexibility and each units may
have difficulty or unwilling cooperate with each others. These effects may cause the decrease of
productivity. Thus, Germany culture is long term-orientation and this is influenced Mercedes-
Benz. To success and has "everlastingly competitive" and "sustainably profitable”, Mercedes-
Benz try to restructure their organization to divisional structure which is more flexible and faster
decision-making. This will be right forward strategy for Mercedes-Benz into automobile future
(Chinadaily, 2017).

Table 3 similarities and differences between divisional and functional structure

Differences
Toyota-Divisional structure Mercedes-Benz- Functional structure
 Lack of specialization  Specialization
 Adaptable to fast changes  Respond slow to change
 Collaboration, innovation  Productivity
 Autonomy for divisional managers  Decision by top management
Conclusion

In conclusion, it can be seen that national culture has influence on organizational culture,
leadership style and organizational structure. However, there will be not necessary for national
culture to influences organization in all aspect. Different countries or organizations may have
different management style and culture. Thus, to success in global markets, everyone needs to
learn about cross-culture differences to avoid conflict and disrespectful actions among each
others.
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