Business - Management Theory: Toyota Term Paper

Length: 10 pages Sources: 8 Subject: Business - Management Type: Term Paper Paper: #38336987 Related Topics: The Last Samurai, Management Theory, Scientific Management, Classroom Management
Excerpt from Term Paper :

Likewise, Lynn points out that, "Japan's recent economic problems may have far more to do with its financial and bureaucratic systems than its managerial systems." According to Everett and Strach, "Japan experienced a decade of zero growth in the 1990s and slumped into recession," but, "The global dynamism and success of Canon, Hoya, Honda, Toyota, TDK, Rohm and Sony, known as the 'seven samurai,' contrasted with the quagmire of the Japanese economy." The company's leadership is clearly forward-thinking as well with its emphasis on R&D into production hybrid models.

Collaborative (about relationships)

Collaboration among the various business segments, as well as the managers within these units, has been a distinction at Toyota over the years, based in large part on the need to maximize scarce resources. Furthermore, the company's leadership has historically recognized when collaboration and cooperation with its major competitors can be in its best interests; for instance, the success NUMMI, the Toyota-GM joint venture, has been the focus of attention for both journalists and academicians alike. In addition, the company ensures close collaboration among its various vendors and subcontractors: "Toyota requires their subcontractors to engage in compulsory process benchmarking activities in which trade secrets are exchanged among members of the outsourcer cadre so that they can collectively improve their effectiveness in service to the organization."

Action (about change)

According to Mintzberg, "Change is fine, and important, but the object of management development is learning. Our belief is that third-generation management development must extend the learning of the classroom well into the organization. We call that 'teaching impact.'" The benefits of promoting a learning organization have not been lost on the managers at Toyota because product development is a particularly critical function within the automobile manufacturing industry. According to Bounfour, the superiority of the Japanese is based in large part on their ceaseless ability to place new products in the market. In fact, the research required to develop a new automobile model was approximately three times less for Japanese companies than for their large generalist Western counterparts; furthermore, the average duration of development for the same Japanese manufacturers is approximately 30 per cent less than their Western competitors.

IV. Conclusions and Recommendations.

Conclusions. Although it is hard to argue with the company's stellar successes in recent years, it is also clear that every organization can be improved and Toyota is no exception. As Smith and Thompson emphasize, the new approaches to management that have emerged in recent years based on theories of lean production promotes the superiority of Japanese production, particularly as developed by Toyota and through the experience of Western transplants, but ignores some important market realities and are based on potentially untenable assumptions. For example, as Baker and Maddux point out, "Lean thinking grew out of the efforts of Toyota to remove waste from its production, supply, and distribution processes. While applied primarily in manufacturing settings, its focus is on enhancing value delivered to customers in any competitive setting through removal of waste in time, cost, resources, and space. Successful implementation of lean thinking assumes a significant level of process management expertise."

While it would seem clear that the company enjoys this level of expertise today, it remains unclear whether the same techniques will allow Toyota to successfully overcome the new challenges facing auto manufacturers today. For example, Toyota today is at the top of a large network of suppliers that are comprised primarily of small- to medium-sized enterprises (SMEs) and is well positioned to exploit its leadership position by forcing its vendors and subcontractors to conform to its management practices, and this practice allows Toyota to achieve these streamlined procedures without compensating these enterprise for their additional costs. Notwithstanding the potential economic benefits that may accrue to a long-term relationship with an enormous multinational such as Toyota, to the extent that Western enterprises are compelled to transform their management practices in the short-term to comply with these unfunded corporate mandates...


In fact, some SMEs may bankrupt themselves in an attempt to comply with such corporate mandates from large multinational corporations. Furthermore, the company's emphasis on profitability may adversely affect its ability to attract and retain loyal workers; in fact, in the past, Toyota has been compelled to solve its periodic labor shortage problems by building training centers just for this purpose.

Recommendations. Based on the foregoing strengths and weaknesses, the company could benefit from taking the following initiatives, particularly in its North American market:

Reassess its policy of forcing SMEs to comply with various management practices and information technology initiatives without compensating them;

Examine some contingency management approaches that do not rely so heavily on existing practices to increase flexibility in the event of unforeseen downturns in the economy or fundamental shifts in the social contract.

Increase its research into hydrogen-based propulsion systems beyond their existing hybrid model that represents interim technology only and may be obsolete before it can become profitable.


About Toyota. 2006. Toyota Operations: By the Numbers. [Online]. Available:

Altman, J. 2006, December 1. "Toyota's U.S. Sales Surpass Ford's Again; GM Sales Up 6.1%, Chrysler Sales Up." Yahoo! Finance. [Online]. Available:

Baker, G., & Maddux, H. 2005. "Enhancing Organizational Performance: Facilitating the Critical Transition to a Process View of Management." SAM Advanced Management Journal, 70(4), 43.

Beechler, S., & Bird, A. 1995. "Links between Business Strategy and Human Resource Management Strategy in U.S.-Based Japanese Subsidiaries: An Empirical Investigation." Journal of International Business Studies, 26(1), 23.

Bigras, Y., & Gelinas, R. 2004. "The Characteristics and Features of SMEs: Favorable or Unfavorable to Logistics Integration?" Journal of Small Business Management, 42(3), 263.

Bounfour, A. 2003. The Management of Intangibles: The Organization's Most Valuable Assets. London: Routledge.

Dilullo, S.A., & Fitzpatrick, W.M. 2005. "Strategic Alliances and the Management of Intellectual Properties: The Art of the Contract." SAM Advanced Management Journal, 70(3), 38.

Everett, A.M., & Strach, P. 2004. "Is There Anything Left to Learn from Japanese Companies?" SAM Advanced Management Journal, 69(3), 4.

Hybrid Synergy Drive. 2006. Toyota Operations. [Online]. Available:

Lipiec, J. 2001. "Human Resources Management Perspective at the Turn of the Century." Public Personnel Management, 30(2), 137.

Lynn, L.H. 2002. "Trends in Japanese Management: Continuing Strengths, Current Problems and Changing Priorities." Pacific Affairs, 75(2), 291.

Mintzberg, H. 2004, March. "Third-Generation Management Development: Managers Are Not Created in a Classroom, but Practicing Managers in a Classroom Can Step Back from Work Pressures and Learn Profoundly from Their Own Experience. The International Master's Program in Practicing Management at McGill University in Canada and around the World Is Truly In-Practice Learning and an Alternative to the MBA." T&D, 58(3), 28.

Smith, C., & Thompson, P. 2000. "Follow the Redbrick Road." International Studies of Management & Organization, 30(4), 40.

Tayeb, M.H. 2000. The Management of International Enterprises: A Socio-Political View. New York: Macmillan.

Toyota Profile. 2006. Yahoo! Finance. [Online]. Available:

Tsutsui, W.M. 1998. Manufacturing Ideology: Scientific Management in Twentieth-Century Japan. Princeton, NJ: Princeton University Press.

Warner, M. 2001. Comparative Management: Critical Perspectives on Business and Management, Volume 3. London: Routledge.

End Notes

1) Mintzberg advises that, "Everything that every effective manager does is sandwiched between action on the ground and reflection in the abstract. Action without reflection is thoughtless; reflection without action is passive. All managers have to find ways to combine those two mindsets -- to function at the point at which reflective thinking meets practical doing" (p. 29).

2) Because culture is universal in human beings and shapes their behaviors, it is not surprising that management practices differ across cultures and societies just as they vary across sectors or among companies: "From that perspective, seeking a simple, universal organizational management medicine (method, attitude, technique) is utopian and cannot reach its goal" (Everett & Strach, 2004, p. 4).

Warner, 2001, 1039.

Mintzberg, 2004, 28.

Mintzberg, 2004, 29.

Toyota Profile, 2006, 1.

Toyota Profile, 2006, 1-2.

Boufour, 2003, 271.

Tsuitsui, 1998, 178.

Tsuitsui, 1988, 178.

Everett & Strach, 2004, 4.

Altman, 2006,…

Sources Used in Documents:


About Toyota. 2006. Toyota Operations: By the Numbers. [Online]. Available:

Altman, J. 2006, December 1. "Toyota's U.S. Sales Surpass Ford's Again; GM Sales Up 6.1%, Chrysler Sales Up." Yahoo! Finance. [Online]. Available:

Baker, G., & Maddux, H. 2005. "Enhancing Organizational Performance: Facilitating the Critical Transition to a Process View of Management." SAM Advanced Management Journal, 70(4), 43.

Beechler, S., & Bird, A. 1995. "Links between Business Strategy and Human Resource Management Strategy in U.S.-Based Japanese Subsidiaries: An Empirical Investigation." Journal of International Business Studies, 26(1), 23.

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