IV, Organizational structure: Organizational structure refers to the way companies arrange their departments.

The larger a company is, the more complicated the organization is and the more management levels there are. How to organize the structure of a company depends on a number of elements and serves for a specific role. Among roles of organizational structure, there are efficiency, harnessing experience, decision-making, communication and span of control. Organizational structure helps the company make the most of various resources. Moreover, structure by functional departments such as: marketing, accounting, finance and so on can be used to take advantages of groups experience to accomplish tasks and projects. And, organizational structure in a company also enhances decision-making process, improves communication and span of control. To sum up, organizational structure is especially important for big companies like Toshiba which means a lot of factors must be taken into consideration. And it is more vital for this company when it goes internationally. Here below I will deeply analyze two main dimensions of organizing a company: vertical differentiation and horizontal differentiation. 1. Vertical differentiation 1.1. Centralization

Centralization is the structure that relies on one individual to make decisions and provide directions for the company. This kind of structure is often used by small businesses. It often has several individuals taking charge of making business decisions and running the business. Primary decision makers or executives are often housed in a central headquarters with officers and meeting areas for leaders to discuss business. On the one hand, his way of organizing the company has many advantages, namely focused vision, fast execution, reduced conflict, control and accountability. A more centralized structure keeps all levels of a centralized organization focused on one vision or purpose. Furthermore, with fewer people involved in decision-making process, decisions are made more quickly and efficiently by a group of leaders. Whats more, conflicts may be reduced because only a small group makes important decisions, less dissent occurs among lower to mid-level employees. And also, such a group will retain more control over companys operation and development. 1.2. Decentralization

Decentralization is a type of organizational structure in which top management level delegates decision-making responsibilities to middle and lower-level managers in the organization, that is for top management to focus more on major decisions.

This dimension offers a lot of advantages, say, empower employees, relieve the burden, prepare for emergencies, and bring more efficient decision-making and ease of expansion. In a decentralized organization, employees are given more autonomy to make their own decisions, making them feel important of themselves and make use of their knowledge and experience. It also helps business owners free themselves up their burden of daily business operations. And especially when such owners got some problems and cannot take on responsibilities, the organization can still remain self-sufficient. With this organizational structure, low or middle managers are able to make decisions quickly without having to wait for top managements command. Finally, decentralization can facilitate the process of expansion for a growing business. 1.3. Toshibas strategy in international business

Toshiba is one of the world leading companies in high technology with the slogan Leading Innovation. It is among the most influential market leaders in advanced electronic and electrical products, Internet-based solutions and services, electronic components and materials, power systems and so on. With the history of 127-year operation, the company has made many valuable contributions to the technology industry in particular and the society in general. Today it has been striving for being recognized as an excellent global corporation. Towards achieving this ambitious goal, a system of international strategies is required to be established. Toshibas strategy is globalization through localization; it means that every function in the corporation such as management, R&D and procurement are localized to create Toshiba Group the ability to respond to customers needs everywhere. From that view, Toshiba locates sales & marketing, production and product development in the areas they serve. Therefore, Toshiba expands to North America, Europe and Asia. Regional representatives are responsible for developing regional policies and facilitating the operations of local subsidiaries. Going internationally, Toshibas managers have to consider choosing between centralized and decentralized business structures because different structures would bring about different business decisions. In a globalized world as today, it is necessary for a multinational company like Toshiba to go global, but act local, it means that it must be both globally integrated and locally responsive simultaneously. Toshiba has made considerable efforts to combine centralized control and localized autonomy. However, during the operation, the management style can be placed between centralized and decentralized organization despite the chosen structure to suit with the specific circumstances. When the market conditions are fluctuating too much, decentralization should be used because local businesses are authorized to make their own decisions; while centralized structure will take more time to respond, but top managers must have to make sure that local decisions align with strategic objectives and ethics of parent company. However, dealing with a global code of conduct would need a centrally managed structure.

This combination is of a pretty good help to Toshiba. First, it provides local subsidiaries with more flexibility in making decision, aligning with parent companies strategic direction and recognizing regional cultural sensitivities. Besides, top managers make decisions, but still keep lower managers involved, customers satisfied and earn positive profits. Second, it helps create an ideal environment within the corporation where decision making process is consistent with the global code of conduct but still put regional cultural differences at the first priority. Those are unquestionable benefits of organizational structure in Toshiba. It plays a very important role in reducing conflicts. It would help Toshiba succeed much more if it can balance decentralization and centralization because such a combination would fasten the decision-making process and take cultural differences into account at the same time. 2. Horizontal differentiation 2.1. Toshibas functional structure

Chart: Corporate structure - http://www.tic.toshiba.com.au/corporate_structure/ 2.2. Toshibas international divisional structure

TOSHIBA MANAGEMENT ORGANIZATION CHART Chart : www.toshiba.co.jp/worldwide/about/or-e.pdf

Board of Directors

Audit committee Audit Committee Office

Compensation Committee

Nomination Committee

President& Chief Executive Officer

Corporate Audit Div. Strategic Planning & Communication Groups Corporate representatives: America, Europe, Asia, China Corporate Strategic Planning Div Corporate Communications Office

Innovation Div

Information & Security Group

Legal Affairs Group

Export control Gr.

HR group

Finance & Accounting Group

Procurement & Logistics Gr.

Productivity & Environment Group

Technology& Intellectual Properties Gr.

Marketing Group

Quality Div

New lighting system group Smart Community Gr Materials & Devices Div.

CSR Div.

The international division of Toshiba brings about a lot of benefits, namely centralizing management and coordination of international operation. And in this division, there are international experts focusing on developing business strategies and giving supports & training. However, it is so hard to control human and financial resources because the international division of Toshiba is really bulky. And more, there is little knowledge exchange between headquarters and local subsidiaries. The most easy-to-be-seen weakness is that the R&D activities are mainly placed in the headquarters. And when domestic markets have demand for a specific product, and that will be researched in the R&D department of Toshiba in Japan to create new specifications, and then bring the formula to the manufacturers in local companies. It really lacks coordination between domestic companies and headquarters. 3. 3.1. Integrating mechanisms Definition of integrating mechanisms

3.1.1. Formal integrating mechanisms Direct contact between sub-unit managers Liaison roles: an individual assigned responsibility to coordinate with another sub-unit on a regular basis Temporary or permanent teams from sub-units to achieve coordination Matrix structure: all roles viewed as integrating roles - Often based on geographical areas and worldwide product divisions 3.1.2. Informal integrating mechanisms Informal management networks supported by an organization culture that values teamwork and a common culture Non-bureaucratic flow of information It must embrace as many managers as possible Two techniques used to establish networks - Information systems - Management development policies Rotating managers through various sub-units on a regular basis 3.2. Impediments to coordination

Firms desiring to enter international business face several obstacles; some are much more severe than others. The most common barriers to effective business are cultural, social, and political barriers, and tariffs and trade restrictions.

The first one to effective business is the cultural and social barriers. A nation's culture and social forces can restrict international business activities. Culture consists of a country's general concepts and values and tangible items such as food, clothing, and building. Social forces include family, education, religion and customs. Selling products from one country to another is sometimes difficult when the cultures of the two countries differ significantly. For example, when McDonald's opened its first restaurant in Rome, it was met with protest. The people of Rome objected to the smell of hamburgers frying. McDonald's overcame this objection by changing the exhaust system of the restaurant. The second barrier is the social forces that can create obstacles to international trade. In some countries, purchasing items as basic as food and clothing can be influenced by religion. In many nations, individuals do not have the same choices in food, clothing, and health care. The third one is political barriers. The political climate of a country can have a major impact on international business. Nations experiencing intense political unrest may change their attitude toward foreign firms at any time; this instability creates an unfavorable atmosphere for international trade. The last one is the tariffs and trade restrictions. Tariffs and trade restrictions are also barriers to international business. A nation can restrict trade through import tariffs, quotas and embargoes, and exchanges controls.

There are certain obstacles to coordination Differing goals and lack of respect Different orientations due to different tasks Differences in nationality, time zone, and distance Particularly problematic in multinational enterprises with their many sub-units both home and abroad 3.3. Strategy and coordination in the international business

The scope of Toshiba is global, and its mission is to become the global leader, so the need of coordination is quite high. V, People: strategy used to recruit, compensate, and retain employees

The recruitment strategy of Toshiba is not so special. First they organize career seminars at universities, then open application form, then interviews in each country. Candidates must be finally interviewed in Japan. Most Japanese companies require employees to be loyal, so the interview round is harsh. But when the challenges are over, employees of Toshiba are able to receive a lot of great compensation and benefits. The starting base salary is attractive, with JPY 205,000/ month for new graduates; JPY 228,500 per month for New Masters and JPY 275,000 per month for new Doctorates (PhD). Employees are paid reasonably for overtime working and given bonus or commuting allowance, housing allowanceAlso, to retain employees, Toshiba provides many other benefits, such as: several comprehensive and cost-effective medical and dental plans, Cafeteria Plan type benefits program, retirement allowance, employee pension program, Toshiba pension fund, Many other services are offered: life insurance, accident insurance, housing loan support program, etc. Employees houses are convenient, with enough welfare facilities, medical and health care facilities. In terms of skills, employees are equipped with special training programs with all the necessary support, proving comprehensive range of skills, from Japanese communication skills, business skills to corporate philosophy. There are also in-depth trainings in various areas for the operational profession. Moreover, Toshiba provides training roadmap aiming at certain shared values for their employees.
http://www.toshiba.co.jp/saiyou/international/index.htm