1.3. The Powerful and Mysterious Soft Side

But how about Toyota's soft side of management—its practices related to human resources, dealer management, and corporate culture? These practices are as important as the Toyota Production System—and far less understood. The same holds true for Toyota's underlying management philosophy that binds together employees, dealers, and suppliers as well as its intricate, multilayered face-to-face communication infrastructure that enables the organization to function like a small-town company where everybody knows everyone else's business. This book offers a peek at the secrets to the powerful and mysterious soft side of Toyota.

The soft side of management has gained relevance because a once-in-a-century shift from the industrial society to the knowledge society has taken place. These two ages are set apart by their means of production. In the industrial society, the means of production focused on assembly lines, machinery, robotics, and automation. In the knowledge society, the means of production shifted to the "deep smarts" embodied in the head and hand of every employee, dealer, and business partner.[]

Toyota has developed a new management model fit for industrial production in the knowledge age by viewing the auto industry as a knowledge-driven industry, where growth depends not only on operational efficiency, but also on people and organizational capability. Toyota's model represents a more human approach to industrial production because ...

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