Extreme Toyota: Radical Contradictions That Drive Success at the World's Best Manufacturer

Chapter 10. A Company Always in Danger

As Toyota forges a new era in the automobile industry, we find the company well positioned to continue leading the pack with a business management innovation that nurtures the soft side of industrial production in the knowledge era. In the post-Ford era of globalization, a mature industry becomes a knowledge-driven industry when companies operate according to knowledge-based management, thereby expanding their potential to innovate and grow. At Toyota, this approach is guided by six forces that interact to keep it moving forward while driving it to extremes. Based on an understanding of how knowledge is created by human beings, Toyota operates successfully in a culture of radical contradiction that continuously yanks the organization out of its comfort zone just long enough to allow it to regroup and move in leaps and bounds. This is the way it makes sense of the increasingly complex global environment in which it operates, finding new solutions beyond contradiction, not in compromise or balance, but in higher levels of performance.

However, Toyota's unorthodox distributed leadership combined with the lack of strategic focus and lackluster financial incentives for employees and investors comes with risks. In addition to the common risk factors associated with unionization, political backlash, quality control, and increasing material costs faced by all manufacturers in today's global economy, the following issues specific to Toyota risk derailing ...