Discussion on Organizational Culture and Structure

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Organizational Culture and Structure: Tesla vs. Honda

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Executive Summary

The association structure is the context that diagrams how exercises are steered to accomplishing the association’s aims. The culture and structure of associations, such as Tesla and Honda, are controlled by the factors that they worth and quality. For this situation there is a clear distinction of culture between the two companies and they are separated by the various values each organization maintains. Six out of seven components of the association’s structure are talked about to additional show the distinction and similitude between the organizations. The structure of Honda is decentralized; accordingly, it energizes representative contribution in dynamic. Nonetheless, Tesla has a concentrated structure, so it grandstands a controlled climate with negligible measure of independence. The two organizations contribute generally in development, which is viewed as one of the elements behind the distinctions in the culture and structure. The other factor, the authoritative size, decides how custom of the association

 

 

Similarities and differences in the organization culture between Honda and Tesla

Organizational culture can refer to what keeps the organization together. It is how things get done in the organization of the code of contact. Organizational culture is a collection of customs and principles that people share in the organization, which controls how they interact with each other and the stakeholders (Hill & Jones, 68). It can also refer to the organization members’ shared meanings that distinguish one organization from another. Several organizations possess a prevailing culture with different arrays of subcultures. Prevailing culture outlines the central values the majority members share, and they give the organization a distinct personality. Subcultures reflect on situations, joint problems, and experiences that organization members face.

Honda’s organizational culture is a philosophy developed in 1956. Honda Motor Company Limited has two fundamental principles that are fundamentally their belief. They include respect for individuals and the three joys (Furlan, 36). The Honda company believes in equality, trust, and initiative as the organization values that signify respect. Their second belief is “the three joys,” which borrows from respecting an individual’s belief. The belief focuses on creating satisfaction among the stakeholders, customers, and society of the organization. The belief of Honda Motor Company Limited defines its organizational culture, which consists of all people’s value through appreciation, thus spearheading the company’s success. The Honda company understands how the whole teams play to make the company successful; thus, it treats others equally, making the employees the company owners. The Honda company enjoys excellent sharing of knowledge between several units irrespective of where they are located worldwide (Furlan, 39). As per their organizational culture, Honda distributes information containing knowledge across all the functional units. This aspect holds that by integrating people’s diversity, the sharing of knowledge brings about mechanisms for enhancing the Honda company’s future and current success.

The Tesla organization culture develops the human resource competence that is necessary for innovative world automotive products. Tesla corporation fosters personnel to support the improvements of the business through innovation. Through these organizational principles, Tesla’s management encourages workers to achieve innovative and creative behavior essential in keeping technological innovation, which makes them the partner of the company’s background. Tesla’s organizational culture in problem-solving is innovative, motivating employees to develop beneficial solutions to the rising challenges in the target market and current issues. For instance, the organization’s organizational culture is used to develop more developed electronic vehicles to remedy environmental problems around automobiles with internal combustion engines.

Unlike Honda, which has two features, Tesla has six features in its organizational culture: doing the impossible, fast-moving, constant innovation, thinking like the owner, being all in, and reasoning from the first principle. The organization’s culture of the Tesla company emphasizes innovation by the employees, unlike the Honda company, which emphasizes respect for others. Tesla’s organizational culture puts employees under pressure for innovation, which puts a strain on human resources, while Honda’s organizational culture is built on trust and respect for others. Honda’s organization culture treats everyone with friendly familiarity and respect, while Tesla’s culture keeps leadership transparent and encourages employees to be encouraged and focused on their work.

The ethical and positive elements featuring in the two cultures

Ethical culture is a set assumption, experiences, and expectations of employees and managers on how the organization protects them from unethical behavior and encourage them to carry themselves ethically. Honda motor company do their best to become the best motor company in society. It tries in all aspects that will positively affect society, including developing fuel-efficient, minimizing the environmental impact of their global manufacturing operations, and providing assistance to the communities. Honda tries to be responsible for the best and responsible company community partner. For Honda Company to achieve this, Honda has established an methodology to steering business that pursues to strengthen the following ideologies and duties of better corporate citizenship.

Respect of individual. A successful company must consider this aspect of respecting its workers, clienteles, merchants, and partners, and all are being directed by the company dogma of “Respect for the Individual.” Therefore, Honda Company adhered to this principle; thus, it is ranked among the world’s best companies. Respect for the individual has led to value and respect for the contributions of each individual. Honda has created the right working environment for each personnel’s ambitions, and their capabilities can be developed and their workplace where a person’s potential can be realized.

Human rights. Honda company respects the rights of humans that are treating them equally and trust them. Honda puts efforts to conduct business in a fair business manner; therefore, they will not engage in activities that may hinder their business or compromise human rights. It is the same with Tesla’s company, which holds that everyone has to be treated equally and with dignity.

Harassment and discrimination. Honda seeks to have a conducive environment for its employees to ensure there is no harsh treatment of its employees at the workplace. Honda does not entertain discrimination based on ethnicity, national origin, disability, race, color, economic status, military veteran status, religion, and educational background. Tesla believes that employees have to be provided with the environment to succeed in their roles without fear of abuse or prejudice. Both Honda and Tesla companies prohibit harassment and discrimination based on color, race, age, marital status, national origin, gender, and religion.

Environmental stewardship. Honda maintains the right environment by recycling materials and conserves resources and energy in every step they undergo for their products. A hand finds appropriate methods to dispose of waste products. Tesla also tries to avoid additional harm to the environment by putting several regulations to manage waste disposal and materials extraction.

Child labor denies children their childhood rights, dignity, and potential, which is dangerous to their mental and physical development, which is prohibited by the international labor organizations and against Honda and Tesla companies’ values. The employees employed should meet the legal requirements for employment. The compensation given to workers for the work done should be equivalent to relevant wage laws and those concerning the minimum wages. Unauthorized deductions of salaries concerning disciplinary actions are not allowed. Both Tesla and Honda companies expect to work with self-driven individuals to do what is right and act with integrity, even if there is no one watching them. Obeying and following the law, both in spirit and letter, are based on which the two companies’ ethical standards are built.

The similarities and differences between Honda and Tesla’s organizational structure

           The organization arrangement is the framework that traces how exercises are coordinated to accomplish the association’s objectives. The exercises may incorporate jobs, rules, and obligations. It is the hierarchical structure that decides the progression of data in the association. For instance, in a decentralized organization structure, the decision-making power is disseminated among different organization levels. In contrast, in the centralized organization structure, the decisions flow from the top to bottom. The organization structure helps the organization to remain focused and efficient. The organization structure gives the organization a visual representation of how it is shaped and how it can achieve its goals. Most organizations present their organizational structure in charts or diagrams, such as a pyramid where the top leadership is placed at the top while those with little power placed at the bottom.

Tesla company has a unitary form or a functional organization structure. The main defining factor of the structure is the use of organization functions. For instance, the corporation has a structural set of engineering workers and another set of sales and services. This is the organization structure somehow similar to that of Honda company limited, which operates with a collaborative organizational structure. Each area of production, sales, buying, and development maintains its autonomy through works in collaboration. Tesla’s organization structure is characterized by three major features: centralization, divisions, and function-based hierarchy.

Functional-based hierarchy. It is the most crucial facet in Tesla’s organizational structure. The chain of command consists of functional groups or offices that oversee the operations of its international and domestic companies. In Tesla’s organization, the offices under this functional office include the chief executive officer and the chairman, Finance, Engineering, global sales and service, and legal office. In Honda’s organization structure, several projects are pursued individually, and there is no central coordination of activities as most of the activities are decentralized Ahlstrom and Bruton, 2009).

Centralization. Tesla’s firm has a centralized administrative structure. This means that the management controls all decision making in all the global companies. There is only one head office responsible for decision making and controls the operations of all overseas companies. There is minimal support for the autonomy of overseas or regional offices.

Divisions. This facet of Tesla’s organization structure focuses on the geographical or other divisions of Tesla’s company. The divisions help in the implementation of strategies, organize financial records, reports, and marketing campaigns. The divisions include Energy Generation, automotive, and storage.

The organization structure of Honda is decentralized in that each oversees company has its management structure and specific duties to perform. In contrast, the Tesla company organization structure is centralized in that there is only one head office responsible for the management of both overseas and domestic companies.

Tesla’s organization structure is more flexible than that of Honda since most of the decisions implemented in Tesla’s organization emerge from the central headquarter; thus, its only aim is to support the growth and market development. The company’s approach adopted in Tesla gives employees the opportunity of growth apart from the headquarter (Meyer, 24). For example, though Tesla’s organizational structure reflects a strict global hierarchy with traditional managerial, it has a chairman and several vice presidents tasked to oversee the regional operations.

Explain the factors behind similarities/differences in the culture and structure of the two companies.

An organization’s structure is the blueprint and charter that characterizes connections among its segments. The authoritative structure of an organization depicts how occupation assignments are officially separated, assembled, and facilitated. The design of an association changes as the organization gets greater or as another delegated CEO is recruited. Furthermore, an organization’s culture is also another essential aspect that contributes significantly to its successor rather than the corporation. The best approach to achieving an institution has a culture that is unequivocally held and comprehensively shared recompense maintained by structure and system.

Moreover, in any case, that a corporation encompassing a resilient culture, there are things that certainly might occur: Personnel recognizes how best association prerequisites them to react to any given conditions in the company; delegates recognize that the usual response is the right one, and the personnel comprehends they will be compensated for demonstrating the alliance’s abilities (Spiegler et al.,2019). Moreover, human resource has a vital capacity to backing up a resilient culture by selecting competitors who have the same visions, goals, and desire in thriving in the institution’s culture. Similarly, the human resource person is often in charge of planning and ensuring that the chief programs are designed to fortify the company’s fundamental principles and ensure that reasonable prizes and assertions go to agents who strictly epitomize the physiognomies of the company.

Nonetheless, various aspects often influence the culture and structure of different organizations or companies. In this case, focusing on Honda and Tesla, other elements affect the similarities or the differences between the two companies that distinguish their operations. Tesla’s traditional culture puts an accentuation on advancement. The valuable part of this social quality aspect is that it vests the company to develop high-innovation merchandises that draw in its clienteles (Johnson, 2012. For instance, Tesla vehicles, pooled with the firm’s excellent marking, having an expanding portion of the car market. In addition, this preferred situation correlates with Tesla’s conventional serious methodology and escalated growth techniques.

Moreover, the corporate culture is similarly advantageous concerning help for speedy response and basic reasoning. This social quality remains with each other’s advancements while making its things adequate and pertinent to customers’ necessities and tendencies. Tesla’s self-driving invention is also the best now delivering on the planet and improving faster than some other car maker (Ahlstrom and Bruton, 2009). While not yet near awesome and keeping in mind that Tesla has likely been excessively forceful in advancing it. Tesla’s Autopilot innovation is gaining from unmistakably a more significant number of miles driven than some other competitor. The Honda Philosophy comprises essential dogmas that encompass regard for an individual, the Company code, and management strategies. This perspective is not just fundamental by all assistants; yet, in addition, traces the reason behind all affiliation exercises and sets the norm for the lead and dynamic of all accessories all through the Honda Group.

Driven by its dreams and reflecting its characteristics, Honda will continue taking on troubles to impart pleasures and energy to customers and organizations worldwide to attempt to transform into a cooperative society that requirements to existing. Nonetheless, the Honda Philosophy includes fundamental creeds enveloping a person’s respect, the Company guideline, and the executive’s strategies (Aleksić & Rašić Jelavić, 2017). This perspective is regular by all partners; yet, it shapes the explanation behind all of the institution’s accomplishments, hence setting the principles for the immediate and dynamic of all partners in the Honda Company.

Another aspect influencing the similarities or differences in the culture and structure between Honda and Tesla is the decree of urgency. The degree of earnestness portrays how quickly the institution needs or needs to drive dynamic and improvement. A couple of affiliations select their degree of criticalness, such as Tesla Company; however, others have it lunged on them by the commercial center, which is the case for Honda Company. A culture with elevated levels of urgency needs to push through rapidly and a severe need to react to an evolving marketplace, which is continuously seen by Tesla Company. Due to the high degree of urgency, Tesla Company can move its projects at a hastened pace trying to evolve with the changing market compared to Honda Company (Ahlstrom and Bruton, 2009). A moderate level of criticalness moves adventures at a reasonable development. A low level of criticalness suggests people work slowly and dependably, regarding quality over capability. A relationship with high genuineness will commonly be steady and maintains an unmistakable organization style. A relationship with low earnestness will be more purposeful and supports a more considered organization style.

Evaluate the fit between structure and culture in each of the two companies compared.

In certain circumstances, the association’s culture decides the association’s structure and the other way around. For Tesla’s situation, it brought together design shows how the dynamic and authority are inclining the directors instead of the workers. In this way, workers are consistently energetic about accomplishing their assignments, and they do not have to strengthen to settle on choices for the association. Then again, Honda’s decentralized structure shows how the dynamic and authority are inside the workers’ hands and not just the supervisors. This clarifies why workers are urged to be inventive, which is essential for Honda’s culture (Aleksić & Rašić Jelavić, 2017).

Unlike Honda, Tesla, Inc , benefits by its corporate structure with respect to reasonable managerial control of overall assignments. Another favored position is the effortlessness of executing new approaches all through the affiliation. Furthermore, benefits by its corporate structure with respect to reasonable regulatory control of overall undertakings. Another favored position is the effortlessness of executing new systems all through the affiliation. Moreover, the provincial divisions uphold monetary, announcing an investigation, and establish future regionalization of systems and strategies in the universal car arcade (Long et al., 2020). These focal points engage Tesla in utilizing its hierarchical structure for additional global development and to construct intensity against Toyota Motor Corporation, Honda Motor Company, Nissan Motor Company, General Motors Company, Volkswagen, and Bavarian Motor Works (BMW), and other vehicle makers. The definitive structure enables the association to halfway control the progression of advantages. A bother of Tesla’s corporate structure is the rigidity that limits snappy change in the affiliation. For example, overall centralization is a basic brand name that confines abroad working environments’ autonomous ability to quickly respond to issues they associated with their specific commonplace business areas. To address this damage, it is proposed that Tesla Inc. change its progressive structure to grow abroad working environments’ level of freedom. A corporate structure with a more extreme degree of decentralization will be additionally convincing in making earnestness against neighborhood firms in abroad business are.

Honda has a much-decentralized hierarchical structure. As per Daniels, Radebaugh, and Sullivan (2015), a decentralized authoritative structure is one whereby there are little portrayals of the whole structure. Affectionate levels of leadership describe it. Chiefs in this type of structure direct scarcely any representatives and occupation capacities. The organization has a vital global technique that functions admirably with its decentralized structure. The organization creates items as indicated by territorial business sectors. Altogether, Honda has sectioned its market into six locales. Albeit a chief board settled in Japan heads the organization, its activities are spread over the six districts. This permits the organization to tweak its vehicles and bikes as per territorial inclinations.

Then again, the decentralized hierarchical structure is portrayed by gigantic correspondence among bosses and their subordinates. Honda has made a stage that advances cooperation among representatives and with their seniors. This shows subordinates that the administration perceives their jobs, and they are apprehensive in advancing their prosperity (Ahlstrom and Bruton, 2009). The organization’s executives accept that a mindful climate is the most right kind of climate to propel representatives to buckle down. This climate includes demonstrating certifiable worry to workers’ government assistance by offering vocation backing, improvement, and different exercises for self-acknowledgment and expert progression. Honda underpins its representatives; inventiveness and development are profoundly empowered. Honda likewise has a committed vocation backing and improvement work, which targets representatives to get the help and help they have to dominate in their professions. This kind of moral climate depends on reasonableness and magnificent initiative aptitudes (Johnson, 2012).

 

 

Fig.1 Tesla organizational structure comprises a number of divisions such as energy, engineering and production, HR and communications, legal and finance, sales and software. Adopted from Business Research Methodology

https://research-methodology.net/tesla-organizational-structure-divisional-and-flexible/

 

 

 

Fig 2. Honda’s organization Chart. Adopted from Hondas website

https://global.honda/innovation/technology/RandD/fandf.html

 

 

References

Sakhartov, A. V. (2016, January). Selecting Corporate Structure for Diversified Firms. In Academy of Management Proceedings Academy of Management.

Jiang, F., Kim, K. A., Ma, Y., Nofsinger, J. R., & Shi, B. (2017). Corporate Culture and Investment–Cash Flow Sensitivity. Journal of Business Ethics.

Koren, Y., Gu, X., & Freiheit, T. (2016). The impact of corporate culture on manufacturing system design. CIRP Annals – Manufacturing Technology.

Ahlstrom, D., & Bruton, G. D. (2009). International management: Strategy and culture in the emerging world. Cengage Learning.

Daniels, J., Radebaugh, L., and Sullivan, D. (2015). International Business: Environments and Operations 15e. Upper Saddle River, NJ: Pearson Education, Inc. ISBN: 13:978-0-13-345723-0.)

Johnson, C. E. (2012). Organizational ethics: A practical approach. Thousand Oaks, Calif: SAGE Publications.

Aleksić, A., & Rašić Jelavić, S. (2017). Testing for strategy-structure fit and its importance for performance. Management: journal of contemporary management issues22(1), 85-102

Spiegler, S. V., Heinecke, C., & Wagner, S. (2019, May). The influence of culture and structure on autonomous teams in established companies. In International Conference on Agile Software Development (pp. 46-54). Springer, Cham.

Long, Z., Axsen, J., Miller, I., & Kormos, C. (2019). What does Tesla mean to car buyers? Exploring the role of automotive brand in perceptions of battery electric vehicles. Transportation Research Part A: Policy and Practice129, 185-204.

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