10.3. Cultural Rigidity

Industry observers have suggested that Toyota employees are prone to groupthink, characterized as a preference for consensus building and an aversion to new ideas or concepts from outside the organization. One reason is Toyota's up-and-in human resource management, which favors recruiting fresh talent over mid-level managers. The other is Toyota's strong focus on the auto industry, which dampened demand to hire expertise from other industries. One look at Toyota's all-male, all-Japanese executive board would support this observation. Toyota's up-and-in policy also applied to its suppliers where it preferred to strengthen existing relationships and took a conservative approach when dealing with new suppliers. And Toyota's nerve system, while very efficient at monitoring the needs of customers, dealers, and distributors, tended to ignore the situation of suppliers. Cultural rigidity is becoming a pressing issue as the demand for environmentally friendly cars in the auto industry increases, requiring Toyota to forge stronger relationships with outside partners to successfully co-develop new technologies (e.g., integrated circuitry from NEC, voltage converters for hybrid propulsion systems from Mitsubishi Electric, battery technology from Panasonic, bio diesel technology with ENEOS, and alternative fuels with Showa Shell).

Toyota tries to tackle cultural rigidity by rotating employees between divisions and across markets to increase opportunities for knowledge ...

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