You are on page 1of 11

Organization Design and Change

A Project Report on Yamaha Motors















Submitted to: Prof. Poornima Gupta

Submitted by : Group 9 The Ferrari Monks


Yamaha Motors- Organization

For over 50 years, Yamaha Motor group has endeavored to create diverse value
through products and services since its founding.
Yamaha has always worked based on three ideas which constitute their
Corporate Philosophy. These are as follows:

1. Corporate Mission: The core identity, values, purpose and visionary
goals.

2. Management Principles: The guiding management principles for
achieving corporate mission. The management principles are as follows :

Creating value that surpasses customer expectations
Establishing a corporate environment that fosters self-esteem
Fulfilling social responsibilities globally

3. Action Guidelines: The guidelines each individual should follow to
realize corporate mission. The three guidelines are as follows :

Acting with Speed
Spirit of Challenge
Persistence

Yamaha desires to be Kando creating company.

Yamahas Goal: To offer new excitement and a more fulfilling life for people
all over the world. Yamaha strives to use their ingenuity and passion to realize
peoples' dreams and always be the ones people look up to for the next Kando.




Dimensions of Organization Structure
Organization Structure defines how tasks are to be allocated, who reports to
whom, and the formal coordinating mechanisms and interaction patterns.
A structure depends on the organization's objectives and strategy.
What Comprises of the Organizational Structure?
Hierarchical
Size and height
Differentiation
Formalization
Centralization

Hierarchical: The flow of authority and responsibility among various
positions in an organization. In Yamaha there is a well defined hierarchy.

Size and Height: The structure is tall with a rigid control over the
operations by top management. The hierarchy is as follows:



Differentiation The degree of specialization or division of labor, the
number of levels in the organizations hierarchy, and the extent to which the
organizations units are dispersed geographically. Yamaha has a complex
structure.

Horizontal Differentiation
It refers to the degree of differentiation between units based on the
orientation of members, the nature of the tasks they perform, and their
education and training. Horizontal Differentiation in Yamaha is high
because people specialize in a task they perform.
Vertical Differentiation
It refers to the depth in the structure. Differentiation increases, and
hence complexity, as the number of the hierarchical levels in the
organization increases. The degree of vertical differentiation is high in
Yamaha because Span of control is high typically 30 workers.

Formalization: It refers to the degree to which jobs within the organization
are standardized. The formalization level is moderate to high. It varies in
accordance to the hierarchy with highest at operational level at moderate at
managerial positions.

Centralization: It refers to the degree to which decision making is
concentrated at a single point in the organization. In Yamaha motors
centralization is high. Workers are hardly encouraged to take the
immediate decisions. Decisions are taken by the top management.

CEO-Grade1
COO-
Grade2
Grade3
Plant Head-
Grade 4
Division
Head-Grde
5
Deparment
Head-Grade
6
Senior
Manager-
Grade 7
Assistanat
Maager-
Grade 8
Engineer-
Grade 9
Trainee Diploma
Shop
Workers
Organization Design

At Yamaha motors the organization follows a Bureaucracy model, given by
Max Weber. This can be characterized by the following three properties:
Hierarchy of Structure: At Yamaha the tasks are well defined by the
organization hierarchy.
Rules and Regulations: At Yamaha there is no scope of flexibility in
the routine operations.
Impersonalization : The standardization principle is followed.


Technology: At Yamaha

Technology is used at all three stages in the value creation processinput,
conversion, and output. Technology influences the structure of an
organization. Three theories consider the relationship between technology
and design. The three theories are as follows:

Per row Classification :
In this model, the technology is defined as the action performed by an
individual upon an object, with or without the aid of mechanical devices,
in order to make some changes in that object or add value to the pre
existing object. The assembly line in Yamaha is a semi-automated one
with every worker assigned specific tasks to be done. It relies on high
levels of Division of labor to improve productivity. Like any other
assembly line, the Yamahas manufacturing process is marked by:

Low Task Variability: The main features are High Division of Labor,
High vertical differentiation, Highly Repetitive duties and task
specialization.

High Problem Analyzability: Yamaha employs mostly unskilled
workers since problems faced during the assembly process are easily
analyzable and therefore Standard Operating Procedures are used

Woodwards Technology:
Woodward categorized the firms into three types of technologies i.e. Unit,
Mass, or Production. She treated these categories as a scale with
increasing degrees if technological complexity, with unit being the least
complex and process the most complex. The model established a link
between technology, structure and effectiveness.
As far as Yamaha is concerned the manufacturing process would most
closely resemble to Mass production technology which is most
commonly used for large batches of bikes

Thompsons Technology:
According to Thompsons classification, Yamaha should be categorized as
long linked Technology due to the nature of individual tasks which have
sequentially dependency with each other.
Yamahas assembly line technology is characterized by a fixed sequence
or repetitive steps which is one of the most important features of long
linked technology.

Strategy at Yamaha

We would be explaining Yamaha Indias business strategy with respect to
Porters competitive strategy and Miles and Snows strategic types.

Porters competitive strategy: According to Porters competitive
strategies, Yamaha is a market differentiator. Initially Yamaha was
aligned as a low cost leader with the producer of 100 cc bikes. But
Task Variability
P
r
o
b
l
e
m

A
n
a
l
y
z
a
b
i
l
i
t
y

Few exceptions Many Exceptions
Un analyzable Craft Non Routine
Analyzable Routine Engineering
with the dynamic demands in the sector it made a move in the
premium bikes which not only had a higher price but had an edge with
the superior technology and design which made them a differentiator.







Mills and snow :
Yamaha can be described as a prospector as it has been proactive in
exploring new markets and opportunities. It provides bikes for almost
every market segments. It aims to satisfy a wide variety of customer
preferences from the mass to the niche markets. It has come up with
several innovations like improving fuel efficiency of the bikes,
introducing environment friendly engines, reducing the size of the
engines and introducing light weight and compact metals for its bikes. It
serves all the market segments with its diversified products.




Culture at Yamaha

To start with, lets define culture in an organizational context- basic
assumptions and beliefs that are shared by the members of the
organization.

The culture at Yamaha has the following key characteristics-
Safety at work :
Yamaha is committed to safety and health of its employees and other
stakeholders who are integrated with its operations. It is a firm
believer that healthy people and safe environment at work lead to
better business performance, higher productivity and low turnover.
They create a safety culture in the organization by:
Integrating safety practices at all levels of operational activities
Ensuring compliance with applicable legislative requirements
Promoting safety awareness amongst employees by empowering
them and following safety practices at workplace

Reward System :
Yamaha offers salaries and rewards above the industry standards.
Increments after every three years and awards educational
scholarships to the wards of the employees.
Transparency in the system.
The reward system at Yamaha is a lot influenced by the Japanese
Reward Culture. Eg. KAIZEN reward for discouraging absenteeism

Ethics are the base:
The organization follows a culture of fair and just with all its internal
and external stakeholders and maintains little or no deviation from the
ethical standards. This promotes harmony and leads to less conflicts. It
also enhances the trust in the organization.

Culture and Structure

Adaptability Mission
Clan
Bureaucratic
The culture followed at Yamaha is Bureaucratic as holds the following
characteristics:
1. Internal Strategic focus : their major focus lies in the core competencies
2. External environment needs is stable

Environment at Yamaha
Specific environment
Customers
The company primarily targets Indias burgeoning middle class by
providing a resort from insufficient public transport system in form of
an economical and reliable personal transport. Yamahas core target
market lies between the age group of 18 to 30 and it is increasingly
targeting the youth with introduction of sports bikes. However, with the
introduction of Yamaha V-max, it also caters to the top niche segment.

Competitors
Big players such as Hero Honda and Bajaj have exercised a huge
bargaining power over suppliers as well as buyers. Yamaha receives
heavy competitive pressures especially on grounds of cost as well as
distribution leadership by these players.

Suppliers
Yamaha procures the heavy components from its vendors in Japan and
Thailand. However, a motorcycle comprises of over 2000 components
which are locally sourced. The two wheeler industry largely sources
its parts and components from common vendors in North India.

As such, the supply side is marked by a lot of politics between the
vendors and bigger players who have a large appetite to place orders
beyond capacity thus creating an artificial scarcity in the market.

Yamaha has a policy of ordering for the parts at least three months in
advance.

Distributors
Yamaha has a smaller range of models in comparison with its
counterparts in India like Hero Honda and Bajaj. As such, it exercises a
relatively lesser influence on its distributors in terms of stocking and
display. Yamaha has adopted the concept of 3S - SALES SERVICE and
SPARE PARTS for meeting the customer requirements. Yamaha India
also serves to foreign markets such as Argentina, Mexico, Philippines,
and Bangladesh etc.
Credit Policy- Yamaha does not offer any credit terms to its dealers
except in discretional cases. This is an aberration to the industry trend
of an average of 2 month credit period. However, the industry has also
been converging towards reducing credit periods- Hero Honda has
brought down its vendor payment period from 52 days to 45 days

Labor Unions
Birth of labor union during its joint venture with Escorts- All Escorts
Employees Union (AEEU) 1996

Formation of All Yamaha Employees Union under the purview of AEEU
after acquiring full control and becoming a 100% subsidiary of Yamaha
Motor Co., Ltd, Japan.

The Labor Union possesses a very strong bargaining power especially
post the 72 day strike in 2000 which led to institution of a binding
increment in allowances at the operational-supervisory level every
three years
Government
The Government of India approved a comprehensive automotive policy
in March 2002. GOI has imposed certain rules and regulations regarding
the emissions and imports of components. As per government
notification all the two wheelers had to upgrade to Bharat Stage III
norms by April 2010. Yamaha, however, decided against upgrading Alba
and G5 because of its low demand, but they are going to concentrate in
the 150cc category to drive up sales.

General environment
Economic
o The Indian Economy is marked by low growth with an outflow of
foreign capital in the country. Following are few of the factors that
have helped surging the market growth:
o Tightening of the interest rates by the RBI

o Combined Goods and Services Tax is expected by 2015 which is
expected to remove the cascading effect caused due to multiplicity
of taxes.

o Deregulation of petrol has led to increase in prices and increase in
commission to petrol pump owners and will continue the spiral
Socio cultural Environment
Populations can be
divided according to the
demographic and
cultural factors of the
society. Regions can
differ in their social and
cultural values and
therefore, marketing
strategy of the company
can vary owing to the
differences in values.
Yamaha tries to
implement the
philosophy of Kando
wherein it tries to
provide customer value
in each of

Its products. Since India has a young population; Yamaha launched a
pool of stylish and quality bikes which can suit young generations
personality.

Technological Environment
Bikes with higher engine capacities have done commendably well on
the Indian roads. Bike styling and fuel efficiency has also seen major
developments.
The new technologies including the mono shockers, back and front disc
brakes, the magnum wheels, DiASil Cylinder etc. are some things that
many companies are looking forward to.
Yamaha has been able to involve many of these technology trends in its
latest bikes i.e. FZ & FZS.

Environmental
Demand for two wheelers is increasing and thereby overcrowding the
roads. Another problem is the adherence to emission norms because of
the lack of infrastructure for inspection.

You might also like