Toyota is organised as a Japanese parent company, Toyota Motor Corporation, with product-based in-house companies, regional business units and a head office, reporting three segments: automotive, financial services and all other. Kenta Kon became President and CEO on 1 April 2026, with Akio Toyoda as Chairman and Koji Sato as Vice Chairman and Chief Industry Officer. The structure grew in steps: region-based operations in 2011, a business unit system in 2013 and seven in-house companies in 2016.
Toyota separates oversight from execution: since April 2017 directors decide and supervise, and operating officers run the business. In February 2026 Toyota said Kon would focus on internal management as CEO, while Sato, as Vice Chairman and the new Chief Industry Officer, would focus on the wider industry.
02
Product-based in-house companies
In April 2016 Toyota moved from a function-based to a product-based organisation, creating seven in-house companies: Advanced R&D and Engineering, Toyota Compact Car, Mid-size Vehicle, CV, Lexus International, Power Train and Connected. Each links work from development to manufacturing for its products.
03
Regional business units
Two region-based units, Toyota No.1 and Toyota No.2, were kept in 2016 to check and balance the product companies. Toyota No.1 covered North America, Europe, Africa and Japan sales; Toyota No.2 covered China, Asia, the Middle East, Oceania and Latin America.
04
Three reporting segments
In fiscal 2026 (the year to 31 March 2026) Toyota reported sales revenues of ยฅ50,684.9 billion. Automotive accounted for 87% of revenues before eliminations, ahead of financial services and all other operations.
What changed in 2025-26
A new CEO from the finance side
On 6 February 2026 Toyota announced that Kenta Kon, then Chief Financial Officer, would become President and CEO on 1 April 2026. Toyota said he would lead reforms across the whole value chain rather than function by function.
Hino leaves the group
Hino ceased to be a consolidated subsidiary on 1 April 2026, when its business integration with Mitsubishi Fuso Truck and Bus took effect. Daihatsu remains wholly owned and makes mini-vehicles and compact cars.
Toyota Industries taken private
Toyota Fudosan, an equity-method affiliate of Toyota, completed a tender offer for Toyota Industries on 24 March 2026. Toyota reclassified its Toyota Industries shares as held for sale and expected the squeeze-out and sale to complete in the year to March 2027.
Software and autonomy
In April 2025 Toyota and Waymo reached a preliminary agreement to explore autonomous driving together, with Woven by Toyota as Toyota’s software partner. Woven City, its test town, officially launched on 25 September 2025, and the new RAV4 used Toyota’s Arene software platform for cockpit software.
Toyota's segments, fiscal 2026 (20-F)
Automotive
Sales to external customersยฅ45,201.9 billion
What it doesDesigns, makes and sells vehicles and parts (Toyota, Lexus, Daihatsu)
Financial services
Sales to external customersยฅ4,819.0 billion
What it doesFinancing and vehicle leasing for dealers and customers
All other
Sales to external customersยฅ664.0 billion
What it doesIT businesses such as the GAZOO.com portal, and other operations
Group size
Sales to external customers390,927 employees
What it doesConsolidated headcount as of 31 March 2026
What it means for you
Read Toyota by segment: automotive drives the group, so tariffs and vehicle costs move the whole company.
If you sell to Toyota, map both lines: the in-house company that owns the product and the region that owns the market.
Watch the group simplification: Hino's exit and the Toyota Industries deal reduce cross-holdings in the wider group.
Track the software layer: Woven by Toyota, Arene and the Waymo talks show where Toyota builds outside its car companies.
Copy the check-and-balance idea: pair product owners with market owners so neither decides alone.
The Business Engineer lens
Toyota’s structure was built to make cars well in many markets; the next test is whether it can add software, autonomy and AI without losing that discipline. The Business Engineer view: Toyota is keeping manufacturing in its product companies and putting software in a separate subsidiary, a split that will decide how fast it moves.
Toyota combines product-based in-house companies, introduced in 2016, with regional business units and a head office in Japan, which makes it a divisional structure with matrix features.
Who is the CEO of Toyota?
Kenta Kon has been President and CEO since 1 April 2026. Akio Toyoda is Chairman and Koji Sato is Vice Chairman and Chief Industry Officer.
What are Toyota's business segments?
Automotive, financial services and all other operations. Automotive was 87% of revenues before eliminations in fiscal 2026.
Is Hino still part of Toyota?
Hino stopped being a consolidated subsidiary on 1 April 2026, after its business integration with Mitsubishi Fuso Truck and Bus.
The complete explainer, cleaned up and reformatted for mobile.
Toyota has a divisional organizational structure where business operations are centered around the market, product, and geographic groups. Therefore, Toyota organizes its corporate structure around global hierarchies (most strategic decisions come from Japan’s headquarter), product-based divisions (where the organization is broken down, based on each product line), and geographical divisions (according to the geographical areas under management).
Research and Development
TypeFunctional
Details– Functional departments dedicated to research, development, and innovation in automotive technology. Functional managers oversee these areas.
Advantages– Specialization in automotive research and development. – Efficient technology development processes. – Technological leadership in the industry.
Drawbacks– Potential silos between functional departments. – Challenges in cross-functional collaboration and coordination.
Production Units
TypeDivisional
Details– Divisional structure with separate units for various regions or countries where Toyota operates manufacturing plants. Each unit focuses on local production and distribution.
Advantages– Localization of production for cost-efficiency. – Adaptation to local market conditions and regulations. – Efficient supply chain management.
Drawbacks– Potential variations in manufacturing processes and quality standards across divisions. – Challenges in maintaining consistent global quality control.
Sales and Marketing
TypeFunctional
Details– Functional departments responsible for sales and marketing activities. Functional managers oversee sales and marketing efforts.
Advantages– Specialization in sales and marketing strategies. – Effective promotion of Toyota’s products and services. – Strong dealership network.
Drawbacks– Limited integration between sales/marketing and other operational functions. – Challenges in aligning strategies with broader goals.
Quality Control
TypeFunctional
Details– Functional departments focused on quality control and assurance. Functional managers oversee quality-related activities.
Advantages– Strict quality control processes. – High-quality products and customer satisfaction. – Continuous improvement initiatives like Toyota Production System (TPS).
Drawbacks– Limited integration between quality control and other operational functions. – Challenges in ensuring consistent quality across divisions.
Supply Chain and Logistics
TypeFunctional
Details– Functional departments responsible for supply chain management, logistics, and procurement. Functional managers oversee these operations.
Advantages– Efficient supply chain operations. – Cost-effective procurement strategies. – Timely production and distribution of vehicles and parts.
Drawbacks– Limited integration between supply chain and other operational functions. – Challenges in optimizing complex global supply chains.
Understanding Toyotaโs organizational structure
For decades, Toyota’s organizational structure was based on a traditional Japanese business hierarchy where only the most senior executives held decision-making power. This structure, which we know today as hierarchical, is characterized by the one-way flow of information from top to bottom and very little subordinate autonomy. However, this structure transformed in 2013 in response to safety issues, product recalls, and a broader strategy to make Toyota more competitive and responsive in the global market.
Efforts were made to streamline the board of directors and scale down the system that allowed executives to make decisions. The company also afforded overseas affiliates more decision-making power, with power until that time concentrated in Toyotaโs Japanese headquarters. Finally, Toyota made significant changes to its organizational structure to ensure that outside or external opinions were considered in earnest and, where feasible, incorporated into new management practices.
Today, Toyota has a divisional organizational structure. It retains aspects of its traditional hierarchical structure, but the initiatives mentioned above have decentralized decision-making power to some extent.
Key components of Toyotaโs organizational structure
While Toyota headquarters in Japan is responsible for making most decisions, some power was also given to business unit and regional heads. The company’s processes are now more decentralized, but these leaders are nevertheless required to report to headquarters.
Product-based divisions
In 2016, Toyota made further structural changes to streamline decision-making and increase production efficiency. In essence, the company moved from a function-based strategy to a product-based strategy.
Seven product divisions were created, with each able to collaborate with other divisions while reporting to head office. These divisions, which Toyota calls companies, include:
Advanced R&D and Engineering Company.
Toyota Compact Car Company.
Mid-size Vehicle Company.
CV Company.
Lexus International Co.
Power Train Company.
Connected Company.
Full responsibility and authority rest with the president of each company.
Geographic divisions
As part of the changes made in 2016, Toyota created two more divisions that help it carry out its strategy across nine international regions. These include:
Business Unit Toyota No. 1 โ North America, Europe, Africa, and Japan.
Business Unit Toyota No. 2 โ China, Asia, Middle East & North Africa, East Asia & Oceania, Latin America & Caribbean.
Each is run by a divisional head who makes decisions for their respective region while remaining accountable to headquarters.
Comparison with Top Related Companies
Ford: Ford uses a global functional structure, with a focus on both product lines and regional market needs. Unlike Toyota, which has a strong divisional structure that separates its product lines and geographic regions into distinct units, Ford integrates these aspects more closely within its functional groups. This approach can lead to more centralized decision-making but might reduce the responsiveness to local market conditions compared to Toyotaโs more regionally focused structure.
Volkswagen: Volkswagen operates with a matrix organizational structure, which includes a combination of product-based divisions and geographic regions, similar to Toyota. However, Volkswagen has a more complex structure due to its wide range of brands under the corporate umbrella, which requires coordination across multiple layers of management. This can increase the complexity of decision-making compared to Toyotaโs somewhat more streamlined divisional approach.
Honda: Honda also has a divisional structure, focusing on both product and function, similar to Toyota. Hondaโs structure allows for a high degree of specialization in both product development and regional market strategies, akin to Toyotaโs approach. However, Honda tends to integrate R&D more directly across its product divisions, whereas Toyota has a more distinct separation between its R&D and other product divisions.
Similarities and Differences
Similarities: All these companies utilize a form of divisional structure that allows them to manage extensive product portfolios and address diverse global markets effectively. They emphasize a balance between central oversight and regional adaptation to navigate the complexities of the global automotive market.
Differences: Toyotaโs structure is distinct in its clear delineation between different product divisions and geographic regions, which enhances focus but may create challenges in coordination across these divisions. In contrast, companies like Ford and Volkswagen integrate these aspects more tightly, which can enhance synergy but also complicate governance and flexibility.
Implications
Responsiveness and Localization: Toyotaโs geographic divisions enable it to tailor its strategies to local markets more effectively, potentially offering greater responsiveness to local consumer preferences and regulatory conditions than Fordโs more centralized functional structure.
Innovation and Integration: Toyotaโs separation of R&D and other divisions allows for focused innovation efforts that are specialized for different product lines, similar to Hondaโs approach. This can drive technological advancements but may require effective mechanisms to integrate these innovations across the companyโs product range.
Operational Efficiency: The clear divisional separation within Toyota helps maintain operational efficiency by clearly defining roles and responsibilities, reducing overlap, and potentially speeding up decision-making within each division. However, this could also lead to silos that hinder cross-divisional collaboration, a challenge that Volkswagenโs matrix structure may navigate differently by fostering inter-brand and inter-regional cooperation.
Key takeaways
Toyota has a divisional organizational structure where business operations are centered around market, product, and geographic groups. For many years, Toyotaโs processes were based on a traditional Japanese business hierarchy where only the most senior executives held decision-making power
While Toyota headquarters in Japan is responsible for making most decisions, some power now rests with business unit and regional heads. Toyota introduced seven, product-based divisions to increase production efficiency and streamline decision-making.
There are also two additional divisions, or business units, which are responsible for managing operations in nine geographic regions around the world.
Key Highlights
Divisional Organizational Structure: Toyota’s organizational structure is divisional in nature, focusing on three main components: market, product, and geographic groups. This allows for a more specialized approach to business operations.
Traditional Japanese Hierarchy: Historically, Toyota followed a traditional Japanese business hierarchy, where senior executives held the majority of decision-making power. Information flowed top-down, and there was limited autonomy among lower-level employees.
Transformation and Decentralization: In response to safety concerns, recalls, and a need to enhance global competitiveness, Toyota underwent a transformation in 2013. This involved decentralizing decision-making power and granting more authority to overseas affiliates, reducing the concentration of power in the Japanese headquarters.
Global Hierarchy: Toyota’s headquarters in Japan still holds significant decision-making power, but business unit and regional heads also have decision-making authority. The process is more decentralized, with reporting obligations to the headquarters.
Product-Based Divisions: In 2016, Toyota introduced a structural shift from a function-based to a product-based strategy. This resulted in the creation of seven product divisions or “companies.” Each company, such as Advanced R&D and Engineering Company, Toyota Compact Car Company, etc., is responsible for its respective product line, collaborating with other divisions while reporting to headquarters.
President’s Authority: Within the product-based divisions, the president of each company holds full responsibility and authority for their division’s operations and decisions.
Geographic Divisions: Toyota also established two additional divisions, known as business units, in 2016. These units oversee operations across nine international regions: Business Unit Toyota No. 1 (North America, Europe, Africa, and Japan) and Business Unit Toyota No. 2 (China, Asia, Middle East & North Africa, East Asia & Oceania, Latin America & Caribbean). Each business unit is managed by a divisional head accountable to headquarters.
Enhanced Collaboration and Efficiency: This divisional structure aims to enhance collaboration, streamline decision-making, and increase production efficiency by focusing on specific markets, products, and geographic regions.
In a functional organizational structure, groups and teams are organized based on function. Therefore, this organization follows a top-down structure, where most decision flows from top management to bottom. Thus, the bottom of the organization mostly follows the strategy detailed by the top of the organization.
In a flat organizational structure, there is little to no middle management between employees and executives. Therefore it reduces the space between employees and executives to enable an effective communication flow within the organization, thus being faster and leaner.
OpenAI is an artificial intelligence research laboratory that transitioned into a for-profit organization in 2019. The corporate structure is organized around two entities: OpenAI, Inc., which is a single-member Delaware LLC controlled by OpenAI non-profit, And OpenAI LP, which is a capped, for-profit organization. The OpenAI LP is governed by the board of OpenAI, Inc (the foundation), which acts as a General Partner. At the same time, Limited Partners comprise employees of the LP, some of the board members, and other investors like Reid Hoffmanโs charitable foundation, Khosla Ventures, and Microsoft, the leading investor in the LP.
Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.
The Amazon organizational structure is predominantly hierarchical with elements of function-based structure and geographic divisions. While Amazon started as a lean, flat organization in its early years, it transitioned into a hierarchical organization with its jobs and functions clearly defined as it scaled.
The Coca-Cola Company has a somewhat complex matrix organizational structure with geographic divisions, product divisions, business-type units, and functional groups.
Costco has a matrix organizational structure, which can simply be defined as any structure that combines two or more different types. In this case, a predominant functional structure exists with a more secondary divisional structure.
Costcoโs geographic divisions reflect its strong presence in the United States combined with its expanding global presence. There are six divisions in the country alone to reflect its standing as the source of most company revenue.
Compared to competitor Walmart, for example, Costco takes more a decentralized approach to management, decision-making, and autonomy. This allows the companyโs stores and divisions to more flexibly respond to local market conditions.
Dell has a functional organizational structure with some degree of decentralization. This means functional departments share information, contribute ideas to the success of the organization and have some degree of decision-making power.
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams are based on the main corporate functions (like HR, product management, investor relations, and so on).
Goldman Sachs has a hierarchical structure with a clear chain of command and defined career advancement process. The structure is also underpinned by business-type divisions and function-based groups.
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.
IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.
McDonaldโs has a divisional organizational structure where each division โ based on geographical location โ is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.
McKinsey & Company has a decentralized organizational structure with mostly self-managing offices, committees, and employees. There are also functional groups and geographic divisions with proprietary names.
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.
Nestlรฉ has a geographical divisional structure with operations segmented into five key regions. For many years, Swiss multinational food and drink company Nestlรฉ had a complex and decentralized matrix organizational structure where its numerous brands and subsidiaries were free to operate autonomously.
Nike has a matrix organizational structure incorporating geographic divisions. Nike’s matrix structure is also present at the regional and sub-regional levels. Managerial responsibility is segmented according to business unit (apparel, footwear, and equipment) and function (human resources, finance, marketing, sales, and operations).
Patagonia has a particular organizational structure, where its founder, Chouinard, disposed of the company’s ownership in the hands of two non-profits. The Patagonia Purpose Trust, holding 100% of the voting stocks, is in charge of defining the company’s strategic direction. And the Holdfast Collective, a non-profit, holds 100% of non-voting stocks, aiming to re-invest the brand’s dividends into environmental causes.
Samsung has a product-type divisional organizational structure where products determine how resources and business operations are categorized. The main resources around which Samsung’s corporate structure is organized are consumer electronics, IT, and device solutions. In addition, Samsung leadership functions are organized around a few career levels grades, based on experience (assistant, professional, senior professional, and principal professional).
Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.
Starbucks follows a matrix organizational structure with a combination of vertical and horizontal structures. It is characterized by multiple, overlapping chains of command and divisions.
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.
Toyota has a divisional organizational structure where business operations are centered around the market, product, and geographic groups. Therefore, Toyota organizes its corporate structure around global hierarchies (most strategic decisions come from Japan’s headquarter), product-based divisions (where the organization is broken down, based on each product line), and geographical divisions (according to the geographical areas under management).
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the CEO (John Furner since 1 February 2026) is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
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