In the midst of Japan’s declining productive-age population (15-64), and birth rate at an all time low, Toyota Motor has decided to make some sweeping leadership structure modifications. Times are changing, and those that can adapt will be able to stay at the top of their game. There’s also the factor that the Japanese government and economy is now starting to rely on more foreign workers, and Japanese companies have started to create an attractive environment that will attract expats.
According to Nikkei Asian Review, starting in January, 2019, Toyota Motor will be scrapping more than 50% of its executive posts to make room for younger employees. These younger employees would usually need to have seniority in order to be placed in major management roles, but that’s not necessarily the case anymore. There are 55 top executives at Toyota Motor, including a president and vice presidents, and with the position of managing officer gone next year, will reduce the number of top executives down to 22. Instead, a new, more flexible form of managers will encompass anyone from current department heads to managing officers, and even lower-level managers where ages are mostly in their early 40s. There will be more than 2,000 of this new class of managers, and Toyota hopes that this will make it easier to appoint talented people to run in-house projects and companies without waiting for them to climb the corporate ladder.
This big change is also in response to a shift in resources to revolutionary fields such as electric vehicles, self-driving cars, and connected mobility services. "We will lose to our competition if we don't revolutionize faster," a Toyota official said. The automotive industry has been moving rapidly these past few years, and changes to hierarchy and a focus on high speed decision making have become a priority for the Japanese automobile manufacturer in the past few months.
Source: Nikkei Asian Review