Abstract

Japan-based Toyota Motor Corporation is one of the leading automobile companies in the world. In addition to adopting various lean manufacturing practices such as Just-in-time, Kaizen, Kanban and Jidoka, which came to be known as the Toyota Production System (TPS), to achieve high efficiency in vehicle production, Toyota cultivated a culture that posed employees with constant challenges enabling them to come out with fresh ideas. The mentorship, social networks, teamwork, training and simple communication ensured that the culture was spread uniformly all across the organization. Toyota had very few suppliers and they played an important part in maintaining high quality of Toyota's products. Since the 1990s as Toyota's concentration was on growth and spreading its operations globally, TPS started to dilute. In order to reduce costs, Toyota introduced a program called Construction of Cost Competitiveness for the 21st Century, which intended to reduce the costs across the company's operations by 30% and also expand overseas production. Then a more aggressive version of the program was introduced to reduce production costs and time to market.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the importance of organizational culture in the success of an organization.
• Examine how the culture can become inflexible over a period of time and its impact on the organization.
• Conduct strategic analysis of Toyota's markets and business.

Keywords

Organizational culture, Toyota Way, Toyota Production System, Core competency, TQM, Quality Issues, JIT, Globalization, Automotive industry, Toyota