1.4. How Toyota Is Like a Failed, Stagnant Company

While Toyota appears to have succeeded in developing a management model fit for industrial production in the knowledge age, at the same time it lacks many characteristics typical of other large, globally successful companies. The following Toyota policies and organizational patterns resemble those associated with failing or stagnant companies:

  • While Toyota is innovative, its management remains homogeneous, in contrast to the more typical innovative organizations that encourage diversity. Toyota management, particularly in Japan, is predominantly male and Japanese. They are proud to be a company from the rural backwater Mikawa region, a suburb of the major commercial city of Nagoya. Regional pride is strong in Japan and the company's rural origin accounts for its male-dominant culture, as well as its simplicity and humility. They have no plans to relocate their headquarters to central Tokyo as Honda, Hitachi, and many other large Japanese companies have done.

  • While Toyota is famous for its efficiency, its allocation of human resources seems inefficient. Every company has meetings, but it is amazing to see how many people attend a Toyota business meeting. Many of the employees who attend do not participate in the discussion. There are also excessive numbers of employees working at the management level whose responsibilities bear no relation to operational or financial performance. In its sales organization, Toyota deliberately assigns ...

Get Extreme Toyota: Radical Contradictions That Drive Success at the World's Best Manufacturer now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.