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Select an organization and analyze the structure of the organization. Do you think it is appropriate structure for the organization? Justify it.
The international company that I have chosen is Honda Motor Company, Ltd. It is a Japanese multinational corporation and well known with its manufactured automobiles and motorcycles. Honda is headquartered in Minato, Tokyo, Japan. The company's shares has listed on Tokyo Stock Exchange and other countries like New York, Osaka, Nagoya, Sapporo, Kyoto, Fukuoka, London, Paris and Switzerland. Honda has been established since 24 September in 1948. The current CEO of Honda is Takanobu Ito. The company's capital has reached 86 billion Yen. The total company sales are 13,415,795 million Yen, whereas its total number of employees is 208,347 in 31 March 2009. The company operates under two basic of principles which are "Respect for the Individual" and "The Three Joys". According to the company, the meaning of "Respect for the Individual" reflects our desire to respect the special character and ability of each person, trusting each other as equal partners in order to do our best in every situation. Whereas "The Three Joys" means expresses our belief and desire that each person working in, or coming into contact with our company, directly or through or products, should share a sense of joy through that experience. These two principles had been created since the establishment of Honda in 1948. Honda is the largest manufacturer of motorcycles and internal combustion engines in the world. It also the world's sixth largest automobile manufacturer. It is producing more than 14 million of internal combustion engines per year. In the year of 2001, Honda has surpassed one of the automakers, Nissan and became second largest automaker in Japan. Furthermore, it also surpassed Chrysler and became the fourth largest automaker in US.
1.1Products Of Honda
In 1949, Honda has manufactured first commercial motorcycle called "Dream Type D" in Japan. Honda has produced various types of motorcycles such as leisure bike, sport bikes, and scooters to fulfill different expectations from Asian and European.
In1963, Honda starts to enter automotive industry. Although Honda was late entering but it has acclaimed with its Civic and Accord car series. Now, Honda has different styles cars that available such as mini-cars, sedans, wagons, minivans, and sport cars.
1.1.3 Power Product
Besides, Honda also entered the power product industry business. Honda utilizes its engines technology to perform jobs for daily activities. Its first power product engine was developed in 1953. Currently, Honda's power engine products has been diversified such as tillers, portable generators, outboard engines, water pumps, lawn mowers.
Honda also put effort in research and development projects. The aim of R&D is to develop new products and technologies to be more innovative and competitive. In development sides, there are four departments centre which carry out different task. For example, R&D Center is responsible for motorcycles, whereas the Tochigi R&D Center handles for cars. Honda has changed dream into possibility. It has developed a humanoid robot called ASIMO.
1.2 Operation in Japan
Honda's operation is developing advanced technologies and coordinating worldwide businesses to better performance. By increasing the production of automobile engines, Honda has opened a new plant in Ogawa-machi and Saitama in 2009. Furthermore, it has boosted the production of automobile's automatic transmissions in Hamamatsu Factory. In the motorcycle industry, Honda has been unified all the local motorcycles manufacturing industries at Kumamoto Factory. It is because Kumamoto Factory is the most advanced operation with its kinds of facilities and models of motorcycles in the world. This allows Honda can focus in production with high efficiency and quality to target worldwide demand. On the other hand, unique of creativities of Honda were displayed on the Japanese market.
In the motorcycle market, Honda equips majority of its scooters, various medium and large-sized motorcycles with a programmed fuel injection system (PGM-FI). The fuel injection system can improve the engine's fuel efficiency and environmental performance. On the other hand, in the automobile market Honda has launched several of new series cars. In the year of 2008, three type cars have been introduced to the market which is Freed compact minivan, remodeled Life and new Accord series. In 2009, new Insight also which is a hybrid car has targeted large segment of market. Whereas in the power products market, Honda has started to sell non-silicon thin-film solar cell for public and industrial use such as Pianta mini-tiller (Table1.1). It runs on user-friendly cassette gas commonly available for use in portable gas stoves.
1.3 How Honda Enters Foreign Markets
1.3.1 Through Manufacturing
In 1963, Honda started its first overseas motorcycle production in Belgium. In 1982, Honda became the first producer which developed the passenger car, "Accord" in US. Then, Honda has created local operations by planting its facilities around the world for research & development, sales & marketing and production for the selected region. As mentioned above, a new motorcycle factory at the Kumamoto Factory in Japan that adopted highly efficient manufacturing technology by gather all production factories to be unified. The Kumamoto Factory has taken over the production of Ohio Factory in US. It helps to strengthen and increase Honda's production of motorcycles.
1.3.2 Distribution to sole distributor
Honda's official slogan is "The Power of Dreams". The ultimate goal of Honda's sales is to satisfy and fulfill its customers. Thus, this allows they will continue come back and support more Honda's quality products. By enhancing the customers' satisfaction, Honda provides service activities through all stages of sales, delivery, and after-sales service. On the other hand, Honda also provides dealerships to motor dealers all over the countries. For example, Malaysia is one of the countries which gained dealership with Honda, Japan. In 1958, Loh Boon Siew noticed the fame of the Honda Super Cub motorbike which had been just introduced in Japan. He believed that this low-cost, high-efficiency machine would find a receptive market in Malaysia. Boon Siew had arranged to meet with Mr. Soichiro Honda and quickly convinced him to set up a Honda subsidiary in Malaysia. The first Malaysian Honda showroom was set up on Pitt Street in Penang. As a sign of their deepening of trust and respect, Mr. Soichiro Honda had appointed Boon Siew as the sole distributor for Honda motorbikes in the Malaysia. The historic first fifty units of Honda 4-stroke cub were then imported into Malaysia. After that, a new factory was built in Penang. Its operation is to assemble Honda motorcycles and later it was renamed as Boon Siew Honda.
In conclusion, we know that Honda is an automobile based company. It manufactures motorcycles, automobiles, power products and developed new technologies. Honda is the sixth largest automaker in the world with its successful globalization businesses. Its global operations include European and Asian countries. Based on operations in Japan, Honda has unified its manufacturing motorcycles industries at Kumamoto Factory. Honda stated that Kumamoto Factory is most advanced with its facilities and all kind of models motorcycles. With this method, Honda can focus in production with more efficient. On the other hand, Honda enters foreign markets through planting factories, marketing and sole distributor relations. At first, Honda began its first overseas motorcycles production in Belgium. Then, it was the first one who produced passenger car named Accord in US. It has planting its factories around the world for research and development, sales, marketing and production in several countries. Furthermore, Honda also provides supplies to sole distributors. It has sole distribution relations with other countries to sell its products. For example, the Honda sole distributor in Malaysia is Boon Siew Honda. With the deepening trust and respect, Boon Siew has appointed by Honda to become soles distributor in Malaysia by imported its motorcycles.
Kurnia group has 3 subsidiaries company which are Kurnia Malaysia, Kurnia Indonesia and Kurnia Thailand. The organization that I have chosen is Kurnia Insurans (Malaysia) Berhad. It was incorporated in 30 December 1978. It also called by another name which is Industrial and Commercial Insurance. Kurnia Insurans has become one of the most successful general insurance companies in Malaysia. Its success is founded on fair business practices which protect the legitimate interests of its policyholders. It offers its service providers profitable and honest income opportunities. In Kurnia Corporation, motor insurance is the major among its insurance businesses. Besides, it has a large agency networks in the industry areas and practically by every town. It has over 6500 agents within the country. Kurnia corporate name and logo was launched on 1st July 1991. The sailing ship in a calm sea symbolizes stability and dynamism of the group as it achieves its objectives. The "R" in the word KURNIA represents a bird flying, signifying courage, strength, vitality and swiftness. The blue color represents serenity, peace and stability. The symbol represents "K" for Kurnia. The water element represents prosperity. The Kurnia Insurans Malaysia is using matrix structure in its company. There are several advantages by applying matrix structure.
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2.1 Organization chart of Kurnia Insurans Malaysia:
2.2 Matrix structure
Matrix structure is a combination of functional structure and product organizational structure. Functional structure is a structure which arranges the employees into separate departments. Each employee is leaded by their department's manager who reports to a general manager or chief executive. This kind of hierarchical structure is consisting both formal and centralized. Matrix structure has several of advantages from functional structure and the product organizational structure. The matrix structure also described as "compartmentalization" of departments on many levels. Each employees has varies over time according to the length of products or projects. I found that Kurnia Insurances Malaysia is using matrix structure because it has product managers to in-charge on the motor products and non-motor products. This allows the organization to be concentrated on the customer's requirement. Product managers in Kurnia Insurans Malaysia can share the employees from other departments. They can choose team members among those employees and form a team as they like. Product managers requested to report directly to the Chief Executive Officer. It is because the products represent a potential centre, so the power and authority used by product managers come directly from the CEO.
2.2.1 Horizontal Coordination Process
In the top management of matrix structure, all the important decisions of Kurnia Insurans Malaysia are made up by Chief Executive Officer and another three directors. When the CEO wants to make a decision or planning a new operation, he or she needs to gather the directors to have a meeting and discussion. However CEO is the decision maker, but each decision making needs the consensus agreement from the other three directors. In the middle management, each functional department is divided but they still keep in relationship on some task. Each functional management has their specific function in the company. For example, Human resource & Corporate Service department is responsible for the arrange duties of staffs and corporate service. Different department in Kurnia Insurans Malaysia have different functions and they has no much relationship with other departments because their function and duties are totally different. On the other hand, matrix structure organization which the product manager could select the different employees to be gathered and formed a team to carry on the task. Hence, working with the other departments' employees can boost the relationship between each other.
2.2.2 Vertical Coordinate Process:
In the Kurnia Insurans Malaysia, chairman is the highest position of the organization. However the chairman is not involving in the decision making of the organization. The top position of management in Kurnia Insurans Malaysia is Chief Executive Officer. Second highest position is director. Chief Executive Officer and directors are involved in the decision making of the organization. CEO cannot make decision as he likes, he need to get agreement from the directors. Once the decision has approved, then CEO can implement the decision to the downwards management. The third highest position is Chief Financial Officer and Chief Investment Officer. They are responsible to manage the middle management. The middle management got three functional general manager and two product managers. Each functional general manager is responsible to the department Agency Distribution, Alternative Distribution and Human Resource &
Corporate Service. The products managers are responsible to Motor product and Non-Motor product. Products managers can chose the stuffs from the three departments to build up his management team to work out for the task of products. There are also two deputy general managers and two assistant managers help four general manager under their management. Only the Motor product manager does not have a deputy general manager or assistant manager in his management team. The three functional general manager are reported the data to the Chief Financial Officer and Chief Investment Officer. While the products managers can reports the data straight to the CEO to get their attention when problems have been happen. Downwards the middle management is junior management. In junior of functional management, there are some juniors managers to manage the stuffs. Any problems occurred junior management will report to the general manager. In junior of product management, there is no any manager. Only Insurans Agents is available. Insurans Agents are responsible to manage the salesman. Insurans Agents need to report the products sales to product general manager. The salesmen are responsible to promote products and make profits for the company.
2.3 Yes, it is an appropriate structure for Kurnia Insurans
2.3.1 Good control in management
Matrix structure is suitable for Kurnia Insurans Malaysia. It consists the advantages which come from functional structure and product organizational structure. The first advantage is matrix structure provide good control to the management. For examples, stuffs link to junior managers, junior managers link to general managers, general managers link to Chief Financial Officer and Chief Investment and finally link to Chief Executive Officer. They can be divided into senior management, middle management and junior management. This will provide good control from top management to the lower management.
2.3.2 Flexible & Boost Relationship
Teams can be created by product general manager, for examples, he can choose the stuffs from different departments. He can also straight to report the data or problems to the CEO. The other advantage is improving the communication and relationship between the stuffs from different departments. While working together, this can help them increase understanding between each other. Meanwhile, they can also build up good relationship and friendship.
2.3.3 Encourage teamwork & brainstorming
The forth advantages is encourages the teamwork of the stuffs. In the process of operating the tasks, team was formed and thus need teamwork to be distributed. They need to have a meeting to discuss the operations and distribute the work for each person. Thus, it can generate more ideas and increase work efficiency.
2.3.4 Clear the requirements of customers
The fifth advantages is reflects the needs of customer. The product managers are focus on the improvement of products. They can more easily find out the needs of customer and the products' strength and weaknesses. Besides, they can provide the external information to help the top management in decision making.
2.3.5 Gain knowledge and skill
The sixth advantage is the stuffs can learn different skills and share technologies of different department. The stuffs come from the different departments who have different background, skill and knowledge. Thus, employees can learn different new knowledge through the team while working together. As a result, it can improve one's mind to be knowledgeable and widen views.
In conclusion, we know that Kurnia Insurans Malaysia is using matrix structure. Based on its structure, it stated Chairman is the person who holds the highest position. The second position is Chief Executive Officer who holds the largest authority in controlling and managing Kurnia Insurans Malaysia. The decision making by him must be agreed by the other three directors before implementing to the lower management. The third position is Chief Financial Officer and Chief Investment Officer. They are linked with 3 department general managers. The general managers are reporting date and operations to CFO and CIO. Based on the advantages of matrix structure, the first one is good control in management. The second is flexible and boost relationship, and the third is encouraged team work and brainstorming. The fourth is clear the requirements of customers and the fifth is gain knowledge and skill. These are the all advantages in the Kurnia's matrix structure.
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Honda's Technology-ASIMO Robot
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