Toyota Motor Sales Case Study

TOYOTA MOTOR SALES, USA, Inc. – CASE STUDY Toyota Motor Sale, USA, Inc. (TMS) is a wholly owned subsidiary of the Japanese Toyota Motor Corporation (TMC) which takes care of the marketing and sales of Toyota vehicles in the USA.
In turn, nine regional offices operate across the country as wholly owned TMS subsidiaries. Their main roles consist of taking care of all dealers’ activities. For example, they support them, supervise, train and evaluate their employees, and ultimately achieve operating budget objectives, customer satisfaction and sales penetration.
A proposal for change emerged within the company when some TMS managers started to believe that regional managers should be given more authority and bottom-line responsibilities

Therefore, it will not be unreasonable to make regional managers profit center managers.
Decentralization, as shown in the CAT case, make managers more conscious about the financial implications of what is going on. Thus, becoming in charge of the major regional functions would make managers more responsible on what are the expenses and the revenues associated with their regions.

2.1.2 Promote managers leadership development and increase motivation
The downside of decentralization is that regional managers will hold bigger responsibilities, but they lack the experience and skills to assume such a broader role.
Nonetheless, GMs appear to like some more authority as it is shown in the case. This was especially true when it came to the possibility of regional managers to allocate part of the dealer incentives as they wished in the case. Consequently, if it is true that most regional managers are salesman, we do believe that this could be a bigger opportunity for Toyota to raise the bar and invest in its managers’ leadership development so that they can acquire or expand all the skills they need to take over the new role. Furthermore, according to Ryan, R. M. (1993), the opportunity to benefit from the autonomy of making their own

This being said, there is no one who knows their clients better than regional managers. Even though we are in favour of decentralization, we do believe decision making needs to be in accordance to the company strategy. Therefore, even if most of the operational decisions would be made at a regional level, corporate managers would still need to set the basic rules and intervene when a particular decision made at a local level goes against the overall company strategy and what is best for it. TMS would still be responsible to set common rules, policies, standards and procedures across the nine regions. This will guarantee a certain alignment across the all country and make the business more