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

10.4. Workforce Diversity

Another criticism of Toyota in Japan is that it tends to recruit employees of a similar character—hard working, motivated by a learning-based work environment, attracted to an unrestricted corporate culture, and mostly Japanese, which, accounts for the language barrier that exists between the mostly Japanese workforce at Toyota and their global operations. Of Toyota's 299,394 employees in 2007, only 38 percent were based outside of Japan, ^[] while half of high-level management positions overseas were staffed by employees transferred from Japan. The rise of new competitors in key markets, like China and India, will be a significant challenge for Toyota's largely homogeneous operation.

Toyota has learned that diversifying the workforce is a double-edged sword because the values and needs of employees of different backgrounds sometimes clash with the demands of a strong corporate culture, leading to disagreement and conflict. According to Executive Vice President Tokuichi Uranishi, increasing the number of non-Japanese managers in the organization will increase demand for performance-based evaluation and incentive systems, which is not a standard practice in Toyota, especially in Japan.^[] Former Senior Managing Director Zenji Yasuda agreed that diversifying the workforce was necessary, but was concerned this would increase red tape across the organization and restrict management flexibility to make judgments based on intuition about a person and his or her ...